If X and Y are close substitutes, a rise in the price of X will lead to:
Increase in demand for Y
Decrease in demand for Y
Decrease in demand for both X and Y
No change in demand for Y
Correct Answer :
A. Increase in demand for Y
Related Questions
Which is the first-order condition for the profit of a firm to be maximum?
AC=MR
MC=MR
MR=AR
AC=AR
Chamberline introduces the concept of:
V-shaped selling cost
U-shaped selling cost
V-shaped purchasing material
U-shaped purchasing material
Under conditions of perfect competition, price in the long-run is equal to:
Minimum of average variable cost
Minimum of marginal cost
Minimum of average fixed cost
Minimum of average cost
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
For monopolistic competitive firm:
P=AR and P>MR
P
P=MC and MC=AC
None of the above
In discriminating monopoly (price discrimination), the elasticity of demand of product in two markets are:
Different
Same
Zero
None of the above
In the long-run:
Fixed cost will be greater than variable cost
Variable costs will be greater than fixed costs
All costs are variable costs
All costs are fixed costs
Revealed Preference Theory was presented by:
Ricardo
Adam Smith
Pigou
Samuelson
A dominant strategy can best be described as:
A strategy taken by a dominant firm
A strategy taken by a firm in order to dominate its rivals
A strategy that is optimal for a player no matter an opponent does
A strategy that leaves every player in a game better off
General equilibrium is concerned with simultaneous equilibrium of:
Few economic agents
All the economic agents
Two economic agents
Many economic agents
The main contribution of Prof. Lord Keynes is in the field of:
Determination of the rate of interest
Determination of the market price
Determination of the wage rate
Determination of production of firm
Which of the following pairs of commodities is an example of substitutes?
Tea and sugar
Tea and coffee
Pen and ink
Shirt and trousers
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
Regarding economic decisions, economics of uncertainty identifies:
No risks
Risks
Safety
None of the above
The substitution effect works to encourage a consumer to purchase more of a product when the price of that good is falling because:
The consumers real income has increased
The consumers real income has decreased
The product is now relatively less expensive than before
Other products are now less expensive than before
In which case the elasticity shown by the different points of a curve is the same?
A straight line curve
A downward sloping demand curve
A rectangular hyperbola demand curve
None of the above
The demand of the luxuries is:
More elastic
Less elastic
Unit elastic
Zero elastic
In non-constant sum game (non-zero sum game), if there are two parties then:
Both parties make better-off
Both parties make worse-off
Both parties become Neutral
Both parties can become better off or worse off
If production increases under increasing returns to scale, the cost will:
Increase at decreasing rate
Increase at constant rate
Decrease at increasing rate
Increase at increasing rate
The concept of product differentiation was firstly introduced by:
Smith
Kaldor
Sraffa
Marshal
Capital and Development Planning is the work of:
S.Chakravarty
J.S.Mill
A.C.Pigou
F.W.Taussig
When at a given price, the quantity demanded of a commodity is more than the quantity supplied, there will be:
An upward pressure on price
A downward pressure on price
Price will remain unaffected
All of the above
The main contribution of Adam Smith is in the field of:
Economics of state
Wealth of Nations
Value and price
Theory of demand
In substitution effect and income effect:
The substitution effect is more certain
The income effect is more certain
The substitution effect is uncertain
The income effect is always positive
Each firm in cournot model starts selling:
1/2 of the total market demand
1/4 of the total market demand
1/3 of the total market demand
None of the above
When price increases and with it the total outlay on a commodity also increases, it is a case of:
Perfect elasticity (infinitely elastic)
Relative elasticity (greater than one elasticity)
Perfect inelasticity (zero elasticity)
Relative inelasticity (less than one elasticity)
An exceptional demand curve is:
Downward sloping
Upward sloping
Horizontal straight line
Vertical straight line
The slope of budget line shows the price ratios of:
Many goods
Few goods
Two goods
Three goods
Which is not an essential feature of a socialist economy?
Social ownership of the means of production
Freedom of enterprise
Use of centralized planning
Government decisions
The utility function u = f(x) is based upon :
Two goods
Few goods
One good
Zero goods