In substitution effect, we:
Move to another indifference curve
Move along given indifference curve
Move to a higher indifference curve
Move to a lower indifference curve
Correct Answer :
B. Move along given indifference curve
Related Questions
The Purchasing Power Parity (PPP) Theory is presented by:
J.M.Keynes
E.D.Domar
Adam Smith
Gustav Cassel
If a straight line supply curve makes an intercept on the X-axis, the elasticity of supply is:
Equal to unity
Less than unity
More than unity
Zero
According to Smith, by value we mean the value with respect to use, and the price we mean the value with respect to:
Production
Consumption
Exchange
Formation
Supply and demand changes have their most rapid impact in:
Auction market
Contract markets
Market for commercial office space
Natural gas market
The Cambridge School of Thought refers to the group of English economists who came under the influence of:
Alfred Marshal
J.M.Keynes
Paul A.Samuelson
A.C.Pigou
When a consumer is satisfied with his spending pattern, he is said to be in:
Balance stat
Equilibrium
Disequilibrium
Authenticated form
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
Identify the author of The Affluent Society?
Gunnar Myrdal
N.Kaldor
A.C.Pigou
J.K.Galbraith
When was Adam Smiths major work An Enquiry into the Nature and Causes of Wealth of Nations published?
1756
1777
1776
1801
When the law of demand operates the demand curve:
Slopes downward
Slopes upward
Becomes horizontal
Becomes vertical
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
We can measure consumers surplus with the help of
TU curve
MU curve
Supply curve
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
Moving down along a linear demand curve:
Demand becomes less elastic
Elasticity does not change
Demand has unitary elasticity
Demand becomes more elastic
Efficient allocation of resources is achieved to a greater extent under:
Monopoly
Perfect competition
Monopolistic competition
Oligopoly
When SAC curve rises, SMC curve lies its:
Below
Above
Equal level
None of the above
In case of straight-line isoquant, the factors are not substituted because they are each others:
Imperfect substitutes
Perfect substitutes
Complements
None of the above
Who wrote A Contribution to the Theory of Trade Cycle?
N.Kaldor
J.R.Hicks
A.C.Pigou
J.M.Keynes
Price leadership is associated with:
Collusive oligopoly
Non-collusive oligopoly
Cartel
Perfect competition
In the case of a giffen good, the income effect:
Is equal to the substitution effect
More than offsets the substitution effect
Reinforces the substitution effect
Only partially offsets the substitution effect
In case of income effect, the level of consumers satisfaction rises when:
Income rises
Income falls
Sales rises
Price falls
Who first used the term Quasi-Rent?
David Ricardo
Alfred Marshal
J.S.Mill
Karl Marx
The fixed cost of a firm:
Are fixed even in the long period
When expressed as an average, show a continuous decline with increase of output
Do not reflect diminishing marginal returns
None of the above
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
The firm producing at the minimum point of the AC curve is said to be:
Operating under diminishing cost
Making optimum use of plant capacity
Operating at excess capacity
Operating under increasing costs
In case of monopoly, the slope of MR is:
Always three times than the slope of AR
Always double than the slope of AR
Always equal to the slope of AR
None of the above
Under competitive conditions, the industry will be in equilibrium:
When each firm is in equilibrium equating MC with MR
When all the firms are earning only normal profits
When firms outside have no tendency to enter the industry and those within, have no tendency to leave the industry
All of the above
Who is the founder of classical school of thought?
David Ricardo
Adam Smith
T.R.Malthus
J.S.Mill
Price elasticity of demand is best defines as:
Change in the tastes of consumers at different prices
The rate of response of demand to a change in supply
The change in costs when output is increased by one unit
The responsiveness of demand to a change in price
The effects according to which people use those goods which are concerned with distinctive standard of living are:
Bandwagon effects
Snob effects
Veblen effects
Steven effects