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4

In substitution effect and income effect:

A. The substitution effect is more certain

B. The income effect is more certain

C. The substitution effect is uncertain

D. The income effect is always positive

Correct Answer :

A. The substitution effect is more certain


Related Questions

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4

By scarcity the economist means that all goods are scarce relative the peoples:

A. Desire for them

B. Purchases

C. Production

D. Consumption

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4

The Lambda or Langrange Multiplier is a:

A. Analyst

B. Catalyst

C. Pessimist

D. Optimist

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4

The slope of isocost line (budget line) shows:

A. Capital labor ratio

B. Labor wage ratio

C. Factor price ratio

D. Factor labor ratio

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4

The advertisement and other selling activities:

A. Lessen the differentiation

B. Widen the differentiation

C. Does not effect the differentiation

D. All of the above

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4

The coefficient of the price elasticity of demand is computed as the absolute value of the percentage change in quantity demanded divided by:

A. The change in price

B. The change in supply

C. The percentage change in supply

D. The percentage change in price

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4

General equilibrium is concerned with simultaneous equilibrium of:

A. Few economic agents

B. All the economic agents

C. Two economic agents

D. Many economic agents

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4

Identify the factor, which generally keeps the price elasticity of demand for a commodity low:

A. Variety of uses for that commodity

B. Its low price

C. Close substitutes for that commodity

D. High proportion of the consumers income spent on it

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4

If we measure the elasticity of demand with the help of the average and marginal revenue, the formula is:

A. Ed = AR/ (AR- MR)

B. Ed = MR/ (AR-MR)

C. Ed = AR/(MR-AR)

D. Ed = AR/ MR

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4

Indifference curves reflect:

A. Preferences

B. Income

C. Prices

D. Consumption

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4

With an increase in income, consumer is expected to buy more of:

A. An inferior good

B. A giffen good

C. A normal(or superior) good

D. None of the above

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4

When the slope of a demand curve is zero (also known as vertical demand curve) then elasticity will be:

A. Zero (perfectly inelastic)

B. Equal to one (unitary elastic)

C. Infinite (perfectly elastic)

D. None of the above

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4

If the price of a product falls then quantity demanded tends to increase ceteris paribus because:

A. The MU/P ratio has decreased

B. Of the income and substitution effects

C. Consumers tend to feel poorer when prices fall

D. When price falls the demand curve shifts right

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4

Rotten eggs are:

A. Free goods

B. Economic goods

C. Luxury goods

D. None of the above

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4

At the point where the straight line from the origin is tangent to the TC curve, AC is:

A. Maximum

B. Minimum

C. Equal

D. Lower

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4

When a consumer is in equilibrium then slope of indifference curve is:

A. Equal to the slope of budget line

B. Greater than the slope of budget line

C. Smaller than the slope of budget line

D. Parallel to the slope of budget line

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4

Slope of a demand curve is:

A. Not relevant to elasticity

B. The only factor determining elasticity

C. Only one of the factors influencing elasticity

D. None of the above

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4

In cournot model, firms face:

A. Negatively sloped demand curve

B. Positively sloped demand curve

C. Horizontal demand curve

D. Vertical demand curve

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4

The General Theory of Employment, Interest and Money is the major work of :

A. N.Kaldor

B. Alfred Marshal

C. J.M.Keynes

D. J.S.Duesenberry

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4

The production function of homogeneous of degree one (n=1) is also called:

A. Linearly homogeneous

B. Zero homogeneous

C. Infinite homogeneous

D. None of the above

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4

In non-constant sum game (non-zero sum game), if there are two parties then:

A. Both parties make better-off

B. Both parties make worse-off

C. Both parties become Neutral

D. Both parties can become better off or worse off

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4

If the prices of goods rise then:

A. The real income of consumer falls

B. The real income of consumer rises

C. The real income of a consumer remains constant

D. The real income of consumer becomes zero

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4

Capital and Development Planning is the work of:

A. S.Chakravarty

B. J.S.Mill

C. A.C.Pigou

D. F.W.Taussig

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4

The cost of one thing in terms of the alternative given up is known as:

A. Production cost

B. Physical cost

C. Real cost

D. Opportunity cost

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4

In Recardian theory of value, the stress has been made on:

A. Marginal cost

B. Production cost

C. Labor cost

D. Supply cost

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4

The largest possible loss that a firm will make in the short run is:

A. Zero

B. Its total fixed cost

C. Its total variable cost

D. Equal to one

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4

The slope of an iso-quant represents:

A. MRS

B. MRT

C. MRTS

D. MRPS

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4

An inferior commodity is one whose quantity demand decreases when income of the consumer:

A. Decreases

B. Increases

C. Remains constant

D. Zero

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4

In economics, Externality means:

A. An externality is a cost or benefit which is not transmitted through prices

B. An externality is a cost or benefit which is transmitted through prices

C. An externality is a production received through external resources

D. None of the above

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4

The budget line is described by each of the following except:

A. Prices of products are assumed to be fixed

B. The consumer need not to spend all his income

C. Consumer income is assumed to be fixed

D. The slope represents relative prices

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4

Increasing returns imply:

A. Constant average cost

B. Diminishing cost per unit of output

C. Optimum use of capital and factor

D. External economies