If two goods have same marginal utility for a consumer then:
He will consume only one of them
He will consume equal quantities of them
He will be willing to pay the same price for each of them
The total utility gained from each of them is equal
Correct Answer :
C. He will be willing to pay the same price for each of them
Consumer is in equilibrium when MUA /PA =MUB /PB , so if MUA = MUB then PA must be equal to PB
Related Questions
Substitution effect means a consumer
Shifts away from the commodity the price of which has fallen
Shifts in favour of a commodity the price of which has risen
Shifts away from a commodity the price of which has risen, in favour of a commodity the price of which has fallen
None of the above
In context of oligopoly, the kinky demand curve (kinked demand curve) hypothesis is designed to explain:
Price and output determination
Price rigidity (price stickness)
Price leadership
Collusion among rivals
If a commodity sold under monopoly is got free of cost, then MC will be:
Zero
Identical with the MR
A horizontal straight line
Infinite
The model which gives us information about price and output changes in different periods is:
Stable cobweb model
Perpetual oscillation
Both(a) and(b)
None of them
In Bertrand model, the entry of new firms is:
banned
allowed
partially allowed
none of the above
To calculate the elasticity of demand, which of the following formula is used?:
Percentage change in demand Original demand
Proportionate change in demand Proportionate change in price
Change in demand Change in price
None of the above
Law of Substitution in production was presented by:
Classical economists
Keynes
Neo-classical economists
Karl Marx
Total variable costs in equation form are:
In Edgeworth model, price remains:
Constant
On increasing
Independent
Indeterminate
Average cost curve contains in it:
Normal profits
No normal profits
Sometimes normal profits and sometimes no normal profits
Super normal profits
After reaching the saturation point consumption of additional units of the commodity cause:
Total utility to fall and marginal utility to increase
Total utility and marginal utility both to increase
Total utility to fall and marginal utility to become negative
Total utility to become negative and marginal utility to fall
A firm under perfect competition has:
An AR curve which is a horizontal straight line
An AR curve which slopes downward
An AR curve which has a kink
An AR curve shape of which cannot be predicted
If the price of a product falls then quantity demanded tends to increase ceteris paribus because:
The MU/P ratio has decreased
Of the income and substitution effects
Consumers tend to feel poorer when prices fall
When price falls the demand curve shifts right
The normal long-run average cost curve is influenced by the:
Principle of diminishing returns
Economies and diseconomies of large scale production
Principle of constant return to scale
All of the above
In Prisoner Dilemma, the best choice of strategy is:
Stable
Unstable
Negative
Neutral
Cross-demand curve shows:
The effect of a change in price of X on its demand
The effect of a change in price of X on the demand for Y
The effect of a change in price of Y on its demand
None of the above
In non-collusive oligopoly firms enter into:
Secret agreements
No secret agreements
Bad habits
None of the above
The game theory takes into consideration:
Reaction of rival firms
Reactions of people
No reaction of rival firms
None of the above
If a straight line supply curve passes through the point of origin O, the elasticity of supply is:
Zero
Infinity
Unity
More than unity
Economic laws are:
Conditional
Moral by nature
Predicted
Like laws of sports
If demand is elastic and supply is inelastic then the burden of a tax on the good will be:
Borne mostly by producers
Borne mostly by consumers
Borne mostly by government
Shared equally by producers and consumers
Identify the economist who first developed the theory of income determination in its modern form:
Paul A.Samuelson
J.M.Keynes
Joan Robinson
Dr.mehboob ul Haq
The spending of money by the producer to influence consumers is an example of:
Derived demand
Joint demand
Demand creation
Compressed demand
The general markets results from the imposition of price ceilings has been:
Higher prices
Increased prices
Increased consumption
Shortage of products
The goods sold by firms under monopolistic competition are technological as well as:
Economic complements
Economic substitutes
Economic inferiors
None of the above
According to Cobb-Douglas, in production function the marginal product of labor is:
If the price of Pepsi Cola goes down, you would predict:
An increase in supply of coca cola
A decrease in supply of coca cola
An increase in demand for coca cola
A decrease in demand for coca cola
In real life firms:
Loss because of past
Learn from past
Destroy because of past
None of the above
Consumers are likely to get a variety of similar goods under:
Monopoly
Perfect competition
Duopoly
Monopolistic competition
Identify the factor, which generally keeps the price elasticity of demand for a commodity low:
Variety of uses for that commodity
Its low price
Close substitutes for that commodity
High proportion of the consumers income spent on it