Some farm land can be used to produce either corn or soybeans. If the demand for corn increases then:
The demand for soybeans should increase
The supply of soybeans should increase
The demand for soybeans should decrease
The supply of soybeans should decrease
Correct Answer :
D. The supply of soybeans should decrease
An increase in the demand for corn would raise the price of corn, causing some farmers to grow corn instead of soybeans. This reduces the supply of soybeans.}
Related Questions
We can write ordinal utility function as:
U = x1 x2
U = x1 + x2
U = y1 +x1
U = x1.x2
By increasing the price of its products above those of its competitors, a perfectly competitive seller:
Can sell more
Reduces its revenues
Can sell nothing
Increases its revenues
Identify the work of Irving Fisher:
Policy on trade
Policy against inflation
The making of index numbers
Labor theory
When with a change in price the total outlay (expenditures) on a commodity remains constant, it is a case of:
Perfect elasticity (infinitely elastic)
Perfect inelasticity (zero elasticity)
Unit elasticity
Zero elasticity (infinitely inelastic)
In market sharing cartel model, cartel determines the shares of:
the individuals
industry
firms
associations
If two goods are perfect substitutes then IC will be:
Concave to the origin
Convex to the origin
Positively sloped
Negatively sloped
The central problem of economics is:
Declining productivity
Increasing consumption
Limited material wants
Limited resources and unlimited wants
An inferior commodity is one whose quantity demand decreases when income of the consumer:
Decreases
Increases
Remains constant
Zero
In the modern theory of costs, the level of production which the firm considers feasible is known as:
Input factor
Heavy factor
Output factor
Load factor
If there are many firms producing similar but differentiated products, the competition is generally said to be:
Oligopoly
Pure competition
Perfect competition
Monopolistic competition
Change in demand refers to:
Movement on the same demand curve
Upward shift of the demand curve
Downward shift of the demand curve
Upward or downward shift of the demand curve
Even in the long-run equilibrium, the pure monopolist can make abnormal profits because of:
Advertising
His low LAC
Blocked entry
High price he charges
In the case where two commodities are good substitutes then cross elasticity will be:
Positive
Unitary
Negative
Infinite
A firms profit is equal to:
R-C
R>C
R
R=C
The long-run average cost is based on the fact that:
None of the factors are variable in the long-run
All factors are perfectly divisible in the long-run
None of the factors is divisible
Management factor is indivisible while all other factors are divisible and can be varied in long-run
The addition or increment to the total cost involvesd in expanding or contracting output by one unit is called:
Fixed cost per unit
Variable cost per unit
Total cost per unit
Marginal cost
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
Of the following, which one corresponds to fixed cost?
Payments for raw materials
Labor cost
Transportation charges
Insurance premium on property
Most of the supply curves with which the average consumer deals are:
Vertical
Horizontal
Controlled by the largest producers
Unaffected by inflation
If the price of a product falls which of the following would occur?
Indifference curves shift down
Budget line shifts down
Indifference curve shift up
Budget line pivots
In discriminating monopoly (price discrimination), the elasticity of demand of product in two markets are:
Different
Same
Zero
None of the above
The short-run periods in monopolistic competition are:
Parallel to each other
Dependent upon each other
Independent of each other
Zero
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
If the demand curve is vertical then its slope is:
Infinite
Zero
Equal to one
None of the
Moving down along a linear demand curve:
Demand becomes less elastic
Elasticity does not change
Demand has unitary elasticity
Demand becomes more elastic
According to Leontief technology, there:
Is only one technique of production
Are few techniques of production
Are many techniques of production
Are two techniques of production
In price leadership, like leader, the follower firm may:
also maximize its profits
not maximize its profits
maximize its costs
none of the above
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
Under monopolistic competition, the products sold by the firms are:
Economic substitutes
Technical substitutes
Both a and b
None of the above
According to M.Kalecki, the true measure of the degree of monopoly power is the:
Ratio between price and marginal cost
Extent of monopolistic profit enjoyed by him
Cross-elasticity of demand for the product of the monopolist
Price charged by the monopolist minus marginal cost of production