In the case where two commodities are good substitutes then cross elasticity will be:
Positive
Unitary
Negative
Infinite
Correct Answer :
A. Positive
Related Questions
In monopolistic competition, the firms face:
Horizontal demand curve
Vertical demand curve
Similar demand curve
Differential demand curve
In monopoly, new firms:
Can enter and exit
Partially can enter and exit
Cannot enter
None of the above
When elasticity of demand is less than one (e<1), then following the formula MR=P[1-1/e], the MR will:
Positive
Negative
Zero
None of the above
In monopolistic competition, the cost curves of all firms are:
Uniform
Different
Dependent
Independent
Demand of a commodity is elastic when:
Change in its price causes a proportionately greater change in its quantity demanded
Change in its price does not change its quantity demanded
Change in consumers income causes change in demand
None of the above
Demand is elastic when the coefficient of elasticity is:
greater than zero
less than one
greater than one
less than one
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
Efficient allocation of resources is likely to be achieved under:
Monopoly
Monopolistic competition
Perfect competition
Any market form
When the demand curve is rectangular hyperbola, it represents:
Unitary elastic demand
Perfectly elastic demand
Perfectly inelastic demand
Relatively elastic demand
The good will highest income elasticity is:
Beef
Mutton
Bread
Motion-picture tickets
According to Cobb-Douglas, in production function the marginal product of labor is:
In case of economic bads, an IC can be :
Sloping downward
Sloping upward
Positively sloped
Negatively sloped
AR curve under perfect competition:
Slopes downwards to the right
Slopes upward to the right
Is vertical to the x-axis
Is horizontal to the x-axis
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
The short-run supply curve of the perfectly competitive firm is given by:
The rising portion of its MR over and above the break-even (shut-down) point
The rising portion of its MC over and above the break-even (shut-down) point
The rising portion of its MC over and above the AC curve
The rising portion of its MC curve
In monopoly, when average revenue curve falls:
MR constant
MR rises
MR falls
MR is zero
If a firm is producing output at a point where diminishing returns have set in, this means that:
Each additional unit of output will be more expensive to produce
Each additional unit of output will require increasing amount of inputs
Marginal product of the variable factor of production decreases as the quantity increases
All 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
Perfect competition assumes:
All buyers and sellers have perfect knowledge of the market
Freedom of entry of firms into the industry
Homogeneous product
All of the above
When total product (TP) is maximum:
MP is negative
MP is infinite
MP is zero
None of the above
The demand curve of ostentation goods (Veblen goods) will be:
Negatively sloped
Positively sloped
Parallel to X-axis
None of the above
The long-run AC curve is constructed from:
The minimum points on all short-run AC curves
The lowest points on the short-run MC curve
The minimum points on the short run AVC curves
It has nothing to do with the short-run cost curves
If the supply and demand increases equally, the price will:
Rise
Fall
Remain unchanged
Change depending on respective elasticities
The non-price competition cartel is a:
stable cartel
unstable cartel
prominent cartel
special cartel
A demand curve which is horizontal and parallel to x-axis represents:
Infinitely elastic demand
Infinitely inelastic demand
Relatively elastic demand
Relatively inelastic demand
The ordinal approach was presented by:
Marshal
J.R.Hicks
Adam smith
Rostow
In collusive olligopoly, the firms may make:
Open agreements
Secret agreements
Both a and b
None of the above
Substitution effect means a consumer
Shifts away from the commodity the price of which has fallen
Shifts in favour of a commodity the price of which has risen
Shifts away from a commodity the price of which has risen, in favour of a commodity the price of which has fallen
None of the above
Marginal utility equals:
Slope of total utility curve
Slope of average utility curve
Slope of marginal utility curve
Slope of total revenue curve
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