Rational economic behavior on the part of the consumer means that he will:
Save as much of his income as possible
Spend as much of his income as possible
Buy everything at the lowest possible price
Make wise choices among available economic goods
Correct Answer :
D. Make wise choices among available economic goods
Related Questions
Price leadership is associated with:
Collusive oligopoly
Non-collusive oligopoly
Cartel
Perfect competition
When total revenues equal to total opportunity cost then the firm will earn:
Abnormal profit
Zero profit
Normal profit
Negative profit
Labor Saving Technological Progress can be defined as:
Technological progress that causes to raise the marginal product of capital and labor in the same proportion
Technological progress that causes the marginal product of capital to increase relative to the marginal product of labor
Technological progress that causes the marginal product of labor to increase relative to the marginal product of capital
None of the above
Under monopolistic competition, the firms compete alongwith:
Supreme powers
Discretionary powers
Low powers
None of the above
When a consumer reached at the point of saturation then marginal utility (MU) is:
Negative
One
Positive
Zero
A vertical supply curve parallel to the price axis implies that the elasticity of supply is:
Zero
Infinite
Equal to one
Greater than zero but less than infinite
Increasing returns imply:
Constant average cost
Diminishing cost per unit of output
Optimum use of capital and factor
External economies
The production function of homogeneous of degree one (n=1) is also called:
Linearly homogeneous
Zero homogeneous
Infinite homogeneous
None of the above
Marginal utility (MU) always:
Increases
Decreases
Remains constant
None of above
Which of the following formulae explain the term average revenue?
Total units /No. of Revenues
Total Revenue/No. of Units
Marginal Revenue × Units
Total Units/ Price
In the theory of firm, Chamberline presented the idea of:
Rising cost
Falling cost
Rising input
Falling input
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
In long run, a firm can change:
Fixed factors
Variable factors
Both of them
None of them
The isoquant approach is based upon:
One output
One input
Two outputs
Two inputs
Under Bandwagon effects, people use those goods which are used by their:
Friends
Relatives
Family
All of them
If a monopolist is producing under decreasing cost conditions, increase in demand is beneficial to the society because:
Consumers get better quality goods
Cost of production falls and hence price will follow
Goods will be sold in many markets
None of the above
In the long-run competitive equilibrium:
There is tendency for firms to enter but not leave the industry
Firms have no tendency either to enter or to leave the industry
Some firms may enter while the others may leave the market even after the equilibrium of the industry
Entry or exit of the firms cannot be predicted
The Tit for Tat strategy means cooperation by the 2nd firm if:
1st firm does not cooperate
1st firm cooperates
1st firm collapses
None of the above
Identify the factor, which generally keeps the price elasticity of demand for a commodity low:
Variety of uses for that commodity
Its low price
Close substitutes for that commodity
High proportion of the consumers income spent on it
In cournot model, each firm makes decision regarding:
Price
Output
Cost
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The reaction curve of a firm is attained by joining the:
Isoprofit curve
Super profit curve
Normal profit curve
Indoprofit curve
With an increase in income, consumer is expected to buy more of:
An inferior good
A giffen good
A normal(or superior) good
None of the above
In price leadership, like leader, the follower firm may:
also maximize its profits
not maximize its profits
maximize its costs
none of the above
The cobweb model will divergent 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
Who finalized the model of monopolistic competition?
Ricardo
Marshal
Chamberlin
Mrs. Robinson
If two households have identical preferences but different incomes then:
They must consume the same amounts of all goods
The wealthier one will have lower marginal utility for most goods
The wealthier one will have higher marginal utility for most goods
They will enjoy the same level of utility
Under which of the following forms of the market structure does a firm have no control over the price of its product?
Monopoly
Monopolistic competition
Oligopoly
Perfect competition
Nash equilibrium is applicable in case of:
Cournot model
Edgeworth model
Chamberline model
Sweezy model
Revealed Preference Theory was presented by:
Ricardo
Adam Smith
Pigou
Samuelson
If the price of product A decreases and in the result the demand for product B increases then we can say that:
A and B are substitute goods
A and B are complementary goods
A is an inferior good
B is an inferior good