Of the following commodities, which has the lowest price-elasticity of demand?
Car
Salt
Tea
House
Correct Answer :
B. Salt
Salt has lowest elasticity of demand (less elastic) b/c it is a necessity good.}
Related Questions
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
The firm is said to be in equilibrium when the difference between revenue and cost is:
Maximum
Minimum
Zero
One
The imaginary differentiation is attributed to difference in:
Style
Salesmanship
Locality
All of these
When the slope of a demand curve is infinite (also known as horizontal demand curve) then elasticity will be:
Zero (perfectly inelastic)
Equal to one (unitary elastic)
Infinite (perfectly elastic)
None of the above
A typical demand curve cannot be:
Convex to the origin
Concave to the origin
A straight line
Rising upwards to the right
In case of monopoly:
MR
MR>AR
MR=AR
AR=0
By scarcity the economist means that all goods are scarce relative the peoples:
Desire for them
Purchases
Production
Consumption
Which one of the following is also known as Plant Curves:
Long-run average cost (LAC) curves
Short-run average cost (SAC) curves
Average variable cost (AVC) curves
Average total cost (ATC) curves
When total revenue is maximum in monopoly, elasticity of demand is:
E =1
E >1
E <1
E =0
In the case where two commodities are good substitutes then cross elasticity will be:
Positive
Unitary
Negative
Infinite
All of the following curves are U-Shaped except:
The AVC curve
The AFC curve
The AC curve
The MC curve
The demand curve of ostentation goods (Veblen goods) will be:
Negatively sloped
Positively sloped
Parallel to X-axis
None of the above
The reserve capacity in administration is advocated on the ground that demand for a product will:
Decrease in the future
Increase in the future
Remain constant
None of the above
Suppose income increases by 10% and demand for commodity increases by 5% then the income elasticity of demand is:
Negative
Positive
Zero
Infinity
A monopoly producer usually earns:
Abnormal profits
Only normal profits
Neither profits nor losses
Profits and losses which are uncertain
Marginal cost is the cost:
Of the last unit of production
Of marginal unit
Of marginal efficient units
Of the average units of production
Microeconomics deals with the:
Allocation of resources of the economy as between production of different goods and services
Determination of prices of goods and services
Behavior of industrial decision makers
All of the above
In economic term water is a:
Free good
Economic good
Both of the above
None of the above
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
Cross-elasticity of demand or cross-price elasticity between two independent goods will be:
Negative
Positive
Infinite
Zero
In microeconomics, we study:
Aggregates of the economy
Few units of the economy
Large units of the economy
Individual units of the economy
If a new production technology for producing compact discs is developed and new firms are attracted to this field:
The supply curve will shift down or right
The supply curve will shift up or left
Both demand and supply curve shifts would occur
None of the above
The feasible part of the demand curve for the monopolist who is charging high price will be:
The elastic part of a demand curve
The inelastic part of a demand curve
The constant elastic part of the demand curve
None of the above
Total variable cost curve:
Steps downwards at first and then upwards
Steps upwards, then remains constant and then falls
Steps downwards
None of the above
Which of the following is not a U shaped curve:
Marginal cost curve
Average variable cost curve
Fixed cost curve
Average cost curve
Which of the following curves is a rectangular hyperbola?
ATC
AVC
AFC
None of the above
According to Diamond Water Paradox diamonds are more expensive than water because:
They yield higher total utility
They yield higher marginal utility
They are more useful
None of the above
In cournot model, each firm expects a reaction from his rival but the expected reaction is not:
important
materialized
accepted
rejected
If we measure the elasticity of demand with the help of the average and marginal revenue, the formula is:
Ed = AR/ (AR- MR)
Ed = MR/ (AR-MR)
Ed = AR/(MR-AR)
Ed = AR/ MR
The isoquant approach is based upon:
One output
One input
Two outputs
Two inputs