If X and Y are close substitutes, a fall in price of X will lead to:
Increase in demand for Y
Decrease in demand for Y
Increase in demand for both X and Y
Increase in demand for Y
Correct Answer :
B. Decrease in demand for Y
Related Questions
In cournot model, at equuilibrium when MC = MR, the elasticity of demand is:
equal to one
zero
negative
equal to 2
The law of Diminishing Marginal Utility implies that the marginal utility of a good decreases as:
It gets more expensive
A household consumes more of it
Preference changes
A households income goes up
Law of Substitution in production was presented by:
Classical economists
Keynes
Neo-classical economists
Karl Marx
The marginal revenues are derivatives of:
TR function
AR function
MR function
AP function
The law of variable proportions comes into being when:
All factors are variable
There is a fixed factor and variable factor
All factors are non-variable
None of the above
According to Marginalists, the price of any commodity is determined by:
Marginal usefulness
Marginal cost
Both of them
None of them
A firm enjoys maximum control over the price of its product under:
Monopoly
Perfect competition
Oligopoly
Imperfect competition
The cost of firms in cournot model are:
identical
differential
very high
very low
When the output of a firm is increasing, its average fixed cost:
Declines continuously
Remains constant
Rises continuously
Declines and then rises
Necessary condition for consumer equilibrium is:
Nash equilibrium is applicable in case of:
Cournot model
Edgeworth model
Chamberline model
Sweezy model
The fundamental choices that a society must make about the use of its resources include:
How much to produce
How to produce
How to distribute
All of the above
In the long run:
All factors can be used in different proportions
Management can be re-organized
A firm can experience returns to scale
All of the above
Income-demand curve shows:
Income-expenditure relationship
Income-cost relationship
Income-price relationship
Income-quantity relationship
In case of income effect, the level of consumers satisfaction rises when:
Income rises
Income falls
Sales rises
Price falls
Which industries spend a relatively large share of their revenue on research and development in order to keep up with their competitors?
Grocery stores
High-Tech industries
Automobiles
Construction
In the case of a normal goods, the income effect:
Is always equal to the substitution effect
Completely offsets the substitution effect
Partially offsets the substitution effect
Reinforces the substitution effect
A mixed economy is characterized by the coexistence of:
Modern and traditional industries
Public and private sectors
Foreign and domestic investments
Commercial and subsistence farming
If less is demanded at the same price or same quantity demanded at a lower price, it is a case of:
Contraction of demand
Decrease in demand
Increase in demand
Extension of demand
The slope of indifference curve shows:
Income level
Satisfaction level
Marginal rate of substitution
Demand level
A firm can never produce in the middle area of input space, in case of:
Concave isoquant
Convex isoquant
Constant isoquant
None of the above
Who stated explicitly for the first time the Law of Camparative Costs?
David Ricardo
Adam Smith
James Mill
A.C.Pigou
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
Who wrote An Introduction to Positive Economics?
R.G.Lipsey
Paul.A.Samuelson
E.D.Domar
J.M.Keynes
Of the following, which one corresponds to fixed cost?
Payments for raw materials
Labor cost
Transportation charges
Insurance premium on property
The line from the origin to a point on an isoquant shows:
The wages employment ratio
The capital rent ratio
The rent labor ratio
The capital labor ratio
Two policy variables, product and selling activities in the theory of firm was introduced by:
Chamberline
Sraffa
Carl marx
Robinson
The minimization of costs subject to output requires equilibrium at the lowest:
Isoquant line
Isocost line
Indifference curve
Price line
In short run:
Labor is variable
Labor is fixed
Capital is variable
None of the above
The main contribution of Prof. R.G.D.Allen is in the field of:
fixation of price
Arc elasticity of demand
Cross elasticity of demand
Wage theory