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4

In the case of a giffen good, the income effect:

A. Is equal to the substitution effect

B. More than offsets the substitution effect

C. Reinforces the substitution effect

D. Only partially offsets the substitution effect

Correct Answer :

B. More than offsets the substitution effect


Related Questions

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4

A shift in the demand for a product is likely to result from a change in:

A. The products price

B. Expectations

C. The prices of factors of production used to produced it

D. Production technology

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4

Elasticity (E) expressed by the term, 1>E>0, is:

A. Perfectly elastic

B. Relatively elastic

C. Unitary elastic

D. Relatively inelastic

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4

A market demand curve presumes that:

A. All consumers are alike

B. Incomes of all consumers is the same

C. Tastes of all consumers are the same

D. Consumers differ in taste, incomes and other matters

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4

The cost curves of the firm shift due to changes in:

A. Input prices

B. Technological innovations

C. Both of them

D. None of them

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4

Income -elasticity of demand will be zero when a given change in income brings about:

A. A less than proportionate change in quantity demanded

B. A more than proportionate change in quantity demanded

C. The same proportionate change in quantity demanded

D. No change in quantity demanded

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4

The market demand for any commodity is the:

A. Average requirement for it in any given place

B. Amount of it wanted at any given price

C. Amount that people would like to buy during a period at different prices

D. Quantity needed to maintain a given standard of living

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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

Short run cost curves are influenced by:

A. Principle of returns to scale

B. Law of variable proportions

C. External and internal economies and diseconomies

D. None of the above

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4

Income effect operates through an increase

A. In nominal income

B. In money income

C. In wages

D. In real income because of the fall of price of a commodity

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4

Some farm land can be used to produce either corn or soybeans. If the demand for corn increases then:

A. The demand for soybeans should increase

B. The supply of soybeans should increase

C. The demand for soybeans should decrease

D. The supply of soybeans should decrease

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4

To calculate the Economic Profit we must deduct which of the following cost from our total revenues?

A. Opportunity cost

B. Direct cost

C. Rent cost

D. Wage cost

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4

Average cost curve contains in it:

A. Normal profits

B. No normal profits

C. Sometimes normal profits and sometimes no normal profits

D. Super normal profits

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4

Who is the author of Problems of Capital Formation in Underdeveloped Countries?

A. R.Nurkse

B. N.Kaldor

C. S.kuznets

D. Alfred Marshal

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4

A producer attains the least cost combination when the relation between Marginal Rate of Technical Substitution (MRTS) and price (P) of the factors x and y is:

A.

B.

C.

D.

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4

If two goods are complements then indifference curve (IC) will be:

A. Straight line

B. Convex to origin

C. Concave to origin

D. Lshaped

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4

Demand for a commodity is elastic when it has

A. Only one use

B. Many uses

C. Uses which cannot be postponed

D. Uses very essential for the consumer

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4

In the case of an inferior commodity, the income-elasticity of demand is:

A. Positive

B. Unitary

C. Negative

D. Infinity

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4

With elasticity of demand, the:

A. Negative sign is ignored

B. Positive sign is ignored

C. None of them

D. Both of them

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4

If two goods have same marginal utility for a consumer then:

A. He will consume only one of them

B. He will consume equal quantities of them

C. He will be willing to pay the same price for each of them

D. The total utility gained from each of them is equal

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4

Liquidity of Preference Theory was introduced by:

A. Alfred Marshal

B. Lord Keynes

C. Karl Marx

D. Prof. Robbins

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4

Under conditions of perfect competition, price in the long-run is equal to:

A. Minimum of average variable cost

B. Minimum of marginal cost

C. Minimum of average fixed cost

D. Minimum of average cost

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4

The ordinal approach was presented by:

A. Marshal

B. J.R.Hicks

C. Adam smith

D. Rostow

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4

If there are many producers, each of whom has an individual production possibility curve, then the lowest marginal cost producer of good X is the producer:

A. Who must sacrifice fewer units of every other goods than any other producer

B. Who can produce more X per hour than any other producer

C. Who must sacrifice more units of every other goods than any other producer

D. None of the above

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4

When marginal costs curve cuts average costs curve, average costs are:

A. Maximum

B. Zero

C. Minimum

D. Equal to one

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4

Identify the author of The Principles of political Economy and Taxation:

A. Alfred Marshal

B. J.S.Mill

C. David Ricardo

D. A.C.Pigou

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4

Cross-elasticity of demand or cross-price elasticity between two perfect complements will be:

A. Negative

B. Positive

C. Infinite

D. Negative infinite

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4

In case of budget line, we get pairs of two goods where consumers income is:

A. Fully spent

B. Half spent

C. Partially spent

D. Correctly spent

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4

The costs faced by the firm against fixed factors are:

A. Total costs

B. Fixed costs

C. Variable costs

D. Marginal costs

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4

Who is the author of the famous work Asian Drama: An Enquiry intro the Causes of Poverty of Nations?

A. Irving Fisher

B. J.B.Clark

C. J.M.Keynes

D. Gunnar Myrdal

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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