In the case of substitutes, the cross demand curve slopes
Downwards to the right
Upwards to the right
Backwards to the right
Inwards at the bottom
Correct Answer :
B. Upwards to the right
Related Questions
A monopolist is able to maximize his profit when:
His output is maximum
He charges a high price
His average cost is minimum
His marginal revenue is equal to marginal cost
Suppose income increases by 10% and demand for commodity increases by 5% then the income elasticity of demand is:
Negative
Positive
Zero
Infinity
Under perfect competition, a firm will be in equilibrium if:
MC = MR
MC cuts the MR from below
MC rises when it cuts the MR
All the above three conditions are fulfilled
The Strategy of Economic Development is the work of:
S.Kuznets
H.Liebenstein
A.O.Hirshman
Alfred Marshal
Under monopolistic competition, the products sold by the firms are:
Economic substitutes
Technical substitutes
Both a and b
None of the above
When AC curve falls, MC curve falls:
More than AC curve
Less than AC curve
Equal to AC curve
None of the above
The production techniques are technically efficient:
Bellow the lower ridge line
Above the upper ridge line
Between the two ridge lines
On the upper ridge line
In the long-run:
Fixed cost will be greater than variable cost
Variable costs will be greater than fixed costs
All costs are variable costs
All costs are fixed costs
If the marginal utility of apples to a consumer exceeds that of bananas then the consumer:
Is not in equilibrium
Will not buy any banana
Will buy some banana but less than he buys of apples
Is willing to pay more for apples than bananas
If the increase in demand is more than the increase in supply, the price will:
Rise
Fall
Remain the same
None of the above
Market demand curve is:
Vertical summation of individual demand curves
Upward summation of individual demand curves
Downward summation of individual demand curves
Horizontal summation of individual demand curves
If a person behaves against the laws of economics then:
He should be condemned
He may lose his respect from society
He should be punished
He should not be punished or even criticised
In the immediate run:
Supply curves are inelastic
Supply curves are perfectly elastic
Demand curves are elastic
Supply curves are elastic
Identify the work of Irving Fisher:
Policy on trade
Policy against inflation
The making of index numbers
Labor theory
Economics is a:
Exact science
Inexact science
Pure science
All of the above
When a consumer is satisfied with his spending pattern, he is said to be in:
Balance stat
Equilibrium
Disequilibrium
Authenticated form
Marginal Productivity Theory deals with the theory of:
Distribution
Exchange
Market structure
Consumer behaviour
Which industries spend a relatively large share of their revenue on research and development in order to keep up with their competitors?
Grocery stores
High-Tech industries
Automobiles
Construction
The necessary condition of firms equilibrium requires:
dR/dQ + dC/dQ = 0
dR/dQ - dC/dQ = 0
dC/dQ - dR/dQ = 0
dR/dQ > dC/dQ > 0
The longer the period of time, the elasticity of supply will be:
Constant
Less elastic
More elastic
Perfectly elastic
If the production function is homogeneous, the expansion path will be a straight line through the origin whose slope determines the optimal:
L/K ratio
K/L ratio
P/L ratio
P/K ratio
Rent is a creation of value, not of wealth who made this observation?
Adam Smith
David Ricardo
Alfred Marshal
A.C.Pigou
If a consumer buys a product that costs Rs.3 and provides an additional 18 units of satisfaction, then for this purchase:
Total utility will increase by 6 units
The marginal utility per rupee is 6
The consumer will buy more because marginal utility is positive
The consumer obtained an extra54 units
Change in quantity demanded (expansion and contraction of demand) is:
Due to change in price while other factors remain constant
Due to change in factors other than price
Both a and b
None of the above
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
The situation in between the extremes of the govt. controlled, planned economy and the perfectly free, unplanned economy is known as:
Developed economy
Laissez-fair economy
Mixed economy
Capitalistic economy
In context of oligopoly, the kinky demand curve (kinked demand curve) hypothesis is designed to explain:
Price and output determination
Price rigidity (price stickness)
Price leadership
Collusion among rivals
An individual consumers demand is not determined by:
Price of the commodity
Price of the substitutes
His household income
Size of countrys population
Which of the following is not characteristic of perfect competition?
Freedom of entry and exit
Each seller is a price taker
Perfect information about prices
Heterogeneous products
Which of the following conditions is met in the long-run equilibrium in monopolistic competition, where the firm is earning only normal profits?
MC =AC and P
MC = AC and P=MR
P =MC and P
MC=MR and P =AR= ATC