In a socialist (communist) economy the invisible hand:
Guides most resource allocation decisions
Operates effectively only in the labor market
Operates effectively only in the market for capital
Is prevented from operating effectively
Correct Answer :
D. Is prevented from operating effectively
The invisible hand is prevented from working because prices are set by government planners rather than determined by market forces
Related Questions
Regarding economic decisions, economics of uncertainty identifies:
No risks
Risks
Safety
None of the above
The equilibrium of a firm is determined by the equality of MC and MR in only:
Under perfect competition
Under monopoly
Under imperfect competition
Under all the above market forms
In measuring price-elasticity:
Price is a dependent variable and quantity is an independent variable
Price is an independent variable and quantity is a dependent variable
Price and quantity both are independent variables
Price and quantity both are dependent variables
The output where TC = TR & AC = AR:
Break-even point
Load point
Shut-down point
Revenue cost point
Consumer surplus is the difference between
Price demanded and price paid
Price quoted and price actually paid
Price that a consumer is willing to pay and the price actually paid
None of the above
Elasticity of Substitution (s) is defined as:
Percentage change in capital-labor ratio dividing by percentage change in 
Percentage change in dividing by percentage change in capital-labor ratio
Percentage change in inputs dividing by percentage change in outputs
None of the above
The demand for cigarettes is price inelastic implying a unit tax on this commodity will
Will mainly paid by sellers of the product
By mainly paid by cigarette smokers
Be mainly paid by tobacco growers
None of the above
In sweezy model (kinked demand curve model), the overall increase in costs of production:
Do not effect equilibrium
Affect equilibrium
Both a and b
None of the above
Duopoly is a market where there are:
Two sellers
A few sellers
Five sellers
Many sellers
When total product (TP) is maximum:
MP is negative
MP is infinite
MP is zero
None of the above
In 1776, a famous book An enquiry into the nature and causes of the wealth of nation was written by:
J.S.Mill
Adam Smith
Robert Malthus
David Ricardo
If the commodities X and Y are perfect substitutes then:
>
None of the above
The slope of indifference curve shows:
Income level
Satisfaction level
Marginal rate of substitution
Demand level
A high value of cross-elasticity indicates that the two commodities are:
Very good substitutes
Poor substitutes
Good complements
Poor complements
Equilibrium of a firm represents maximization of profits as well as:
Maximization of losses
Minimization of losses
Minimization of profits
None of the above
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
The law of demand is most directly a result of:
The law of comparative advantage
The law of diminishing returns
The principle of substitution
Economics of large scale production
In price leadership, like leader, the follower firm may:
also maximize its profits
not maximize its profits
maximize its costs
none of the above
The spending of money by the producer to influence consumers is an example of:
Derived demand
Joint demand
Demand creation
Compressed demand
The slope of budget line shows the price ratios of:
Many goods
Few goods
Two goods
Three goods
The longer the period of time, the elasticity of supply will be:
Constant
Less elastic
More elastic
Perfectly elastic
The firms in non-cooperative games:
Enforce contracts
Make contracts
Make negotiations
Do not make negotiations
Which of the following models are associated with non-collusive oligopoly?
Bertrand model
Chamberlin model
Kinked demand model (Sweezy Model)
All of the above
With the change in the factor prices, the slope of the expansion path will:
Not change
Also change
Increase
Decrease
The market demand for any commodity is the:
Average requirement for it in any given place
Amount of it wanted at any given price
Amount that people would like to buy during a period at different prices
Quantity needed to maintain a given standard of living
Cross-elasticity of demand is measured as:
Percentage change in the quantity of a commodity demanded divided by the percentage change in the price of that commodity
Percentage change in the quantity of commodity X divided by percentage change in the price of commodity Y
Percentage change in the quantity demanded of commodity X
Percentage change in the quantity demanded of commodity X divided by percentage change in the quantity demanded of commodity Y
We can obtain consumers demand curve from:
Income Consumption Curve (ICC)
Engels Curve
Price Consumption Curve (PCC)
Production Possibility Curve (PPC)
An optimum level of a firms output is:
Where marginal cost is minimum
Where average cost is minimum
Where both the marginal and the average cost curves are at their respective minimum
Where the firm earns the maximum profits
The economic problem of determining the combination of inputs yielding lowest cost for producing a given output:
Is only a choice among the technologically efficient combination
Depends on the relative price of inputs
Depends on the price of the product
Depends on the profits made
The cross-price elasticity of the demand for orange juice with respect to the price of apple juice is probably:
Negative
Positive
Near infinite
Zero