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Substitution effect means a consumer

A. Shifts away from the commodity the price of which has fallen

B. Shifts in favour of a commodity the price of which has risen

C. Shifts away from a commodity the price of which has risen, in favour of a commodity the price of which has fallen

D. None of the above

Correct Answer : C.


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  1. In short-run, in monopolistic competition, a firm earns:
  2. Each short run average cost curve:
  3. 4.The Law of Diminishing Returns according to the modern view, applies to:
  4. Variable cost includes the cost of:
  5. Which of the following curves is a rectangular hyperbola?
  6. Competitors in monopolistic competition have full control over:
  7. Change in demand refers to:
  8. Law of Substitution in production was presented by:
  9. The relationship between price effect, income effect and substitution effect is:
  10. The combination of labor and capital where the cost of a given output is minimized is known as:
  11. The imaginary differentiation is attributed to difference in:
  12. If the prices of goods rise then:
  13. MC = MR = AC = AR shows the long run equilibrium position of the:
  14. If two goods have same marginal utility for a consumer then:
  15. Marshalls definition of economics was strongly criticised by:
  16. Price elasticity of demand is best defines as:
  17. The cost curves of the firm shift due to changes in:
  18. In second degree price discrimination, monopolist takes away :
  19. Change in quantity demanded (expansion and contraction of demand) is:
  20. The monopolist firm is price setter. The price setter firm is one which:
  21. The market demand for any commodity is the:
  22. Who wrote Mathematical Analysis for Economists?
  23. The monopolist who is producing the same output from two (or more than two) plants is concerned with:
  24. MC is given by:
  25. In the long-run competitive equilibrium, the theory predicts that:
  26. In modern theory, LAC = LMC after the attainment of:
  27. An optimum level of a firms output is:
  28. If a monopolist is producing under decreasing cost conditions, increase in demand is beneficial to the…
  29. The cost of one thing in terms of the alternative given up is known as:
  30. In monopoly: