In case of income effect, the level of consumers satisfaction rises when:
Income rises
Income falls
Sales rises
Price falls
Correct Answer :
A. Income rises
Related Questions
The imaginary differentiation is attributed to difference in:
Style
Salesmanship
Locality
All of these
By increasing the price of its products above those of its competitors, a perfectly competitive seller:
Can sell more
Reduces its revenues
Can sell nothing
Increases its revenues
Marshallian approach is also known as:
Cardinal approach
Ordinal approach
Consumer approach
Production approach
In monopolistic competition, the firms follow:
Exotic behavior
Sympathetic behavior
Myopia behavior
Regular behavior
A straight line, downward-sloping demand curve implies that, as price falls, the elasticity of demand:
Increases
Decreases
Remains the same
Is zero
Suppose income increases by 10% and demand for commodity increases by 5% then the income elasticity of demand is:
Negative
Positive
Zero
Infinity
The demand curve in monopolistic competition (also in kinked demand curve model), which shows the share of a firm in market is called:
Relative demand curve
Proportional demand curve
Productive demand curve
Differential demand curve
The real income of a consumer is income in terms of:
Goods
Goods and survices
Goods and survices it can purchased
Monetary units
Supply of commodity is a:
A stock concept
A flow concept
Both stock and flow
None of the above
A budget line shows:
Quantities of commodity X which a consumer could buy with no amount of Y
Quantities of commodity Y which a consumer could buy with no amount of X
The different combinations of X and Y that the consumer could buy
All of the above
The Lambda or Langrange Multiplier is a:
Analyst
Catalyst
Pessimist
Optimist
The maximization of output subject to cost requires equilibrium at the:
Lowest isoquant
Lowest isocost line
Highest isoquant
Highest isocost line
If price exceeds AVC but in smaller than AC at the best level of output, the firm is:
Making a profit
Incurring a loss but should continue to produce in the short-run
Incurring a loss and should stop producing immediately
Making a normal profit
Average Revenue means:
Per unit revenue received from all the units sold by the producer
Revenue of the units having average size
Total number of units× Revenue per unit
Total revenue × Number of units sold
In monopolistic competition, the firms have to face:
Same cost conditions
Different cost conditions
Same price conditions
Same products conditions
The general form of Cobb-Douglas production function is:
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
The kink demand curve faced by an oligopolist is based on the assumption that:
Competitors will follow a price increase but not a price cut
Competitors will follow a price increase as well as a price cut
Competitors will ignore both a price increase and a price cut
Competitors will ignore a price increase but will follow a price cut
In real life, brand loyalty is a barrier to:
Enter the new firms
Exit the new firms
Both a and b
None of the above
A typical demand curve cannot be:
Convex to the origin
Concave to the origin
A straight line
Rising upwards to the right
Income effect operates through an increase
In nominal income
In money income
In wages
In real income because of the fall of price of a commodity
Labor theory was firstly rejected by:
Adam Smith
Karl Marx
Ricardo
Pigou
In cournot model, each firm makes decision regarding:
Price
Output
Cost
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Plumbing and pipe-fitting require many of the same skills. If the wage paid to pipe-fitters increased then the effect on the market for plumbers would probably be:
An increase in demand
A decrease in demand
An increase in supply
A decrease in supply
Of the following commodities, which has the lowest price-elasticity of demand?
Car
Salt
Tea
House
A monopolist will fix the equilibrium output of his product where the elasticity of his average revenue curve is:
Less than one
Equal to one
Greater than one
Less than one
Law of Returns to Scale shows:
Technical relationship between input of a variable factor and the resulting output
Any economic relationship between input and output
An output maximizing relationship
A relationship with input changing and corresponding changes in output
Identify the work of Irving Fisher:
Policy on trade
Policy against inflation
The making of index numbers
Labor theory
The demand of the necessities is:
More elastic
Less elastic
Unit elastic
Zero elastic
The feasible part of the demand curve for the monopolist who is charging high price will be:
The elastic part of a demand curve
The inelastic part of a demand curve
The constant elastic part of the demand curve
None of the above