Plumbing and pipe-fitting require many of the same skills. If the wage paid to pipe-fitters increased then the effect on the market for plumbers would probably be:
An increase in demand
A decrease in demand
An increase in supply
A decrease in supply
Correct Answer :
D. A decrease in supply
As both jobs require almost same skills so workers choose whether to sell their services as pipe-fitters or as plumbers. An increase in pipe-fitter wages would reduce the supply of plumbers.}
Related Questions
If production increases under constant returns to scale, the cost will:
Increase at a constant rate
Decrease at a constant rate
Increase at a variable rate
Decrease at a variable rate
The costs faced by the firm against fixed factors are:
Total costs
Fixed costs
Variable costs
Marginal costs
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 market demand schedule is obtained by adding individual demand schedules:
Horizontally
Vertically
Permanently
Perpetually
In substitution effect and income effect:
The substitution effect is more certain
The income effect is more certain
The substitution effect is uncertain
The income effect is always positive
In the case of a normal goods, the income effect:
Is always equal to the substitution effect
Completely offsets the substitution effect
Partially offsets the substitution effect
Reinforces the substitution effect
In perfectly competitive markets, the profit maximization rule can be represented by:
MR=ATC
P=ATC
P=MC
P=AC
Demand is consumers:
Ability to get a commodity
Willingness to get a commodity
Willingness and ability to get a commodity
Desire for a commodity
The Hicksian indirect utility function in the form of equation is:
x =f(P)
x =a-bp
Quantity demanded or supplied is measured in:
Monetary units
Physical units
Relative units
Constant units
Which of the following is assumed to be constant when drawing a demand curve?
Consumer tastes
Prices of inputs
Technology
Number of sellers
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
In the short-run, in which one of the following situations would a competitive seller close down (shut-down)?
When he cannot produce at an economic profit
When price falls short of average variable cost at every level of output
When price falls short of average fixed cost at every level of output
When price falls short of average total cost at every level of output
When total revenues equal to total opportunity cost then the firm will earn:
Abnormal profit
Zero profit
Normal profit
Negative profit
The monopolist often lead to exploitation of:
Producers
Workers
Managers
Consumers
The demand for cigarettes is price inelastic implying a unit tax on this commodity will
Will mainly paid by sellers of the product
By mainly paid by cigarette smokers
Be mainly paid by tobacco growers
None of the above
The slope of indifference curve shows:
Income level
Satisfaction level
Marginal rate of substitution
Demand level
If as a result of an increase in prices, total outlay (expenditures) on a commodity decreases, its price-elasticity of demand is:
Perfect elastic (infinitely elastic)
Relatively elastic (greater than one elasticity)
Unit elastic
Relatively inelastic (less than one elasticity)
Consumers Surplus can also be defined as:
Extra price benefits
Shortage of quantity
Surplus of quantity
Difference between actual price and potential price
When the output of a firm is increasing, its average fixed cost:
Declines continuously
Remains constant
Rises continuously
Declines and then rises
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
The short run cost curve is U shaped because of:
The operation of increasing cost
The existence of fixed cost
The existence of variable cost
All of the above
The cobweb model will convergent when the slope of:
Demand curve is more than supply curve
Supply curve is more than demand curve
Supply curve is equal to demand curve
None of the above
The costs faced by the firm against variable factors are:
Variable costs
Fixed costs
Average costs
Marginal costs
If at the unchanged price, the demand for a commodity goes up, or the quantity demanded remains the same when its price goes up, it is called:
Contraction of demand
Decrease in demand
Increase in demand
Extension of demand
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
Which describes a competitive market?
Many buyers and many sellers
One seller, many buyers
One buyer, many sellers
Few sellers, many buyers
The largest possible loss that a firm will make in the short run is:
Zero
Its total fixed cost
Its total variable cost
Equal to one
Which of the following curves is a rectangular hyperbola?
ATC
AVC
AFC
None of the above
If a commodity sold under monopoly is got free of cost, then MC will be:
Zero
Identical with the MR
A horizontal straight line
Infinite