Supply curves are most elastic:
In the long-run
In the short-run
For luxuries
In the immediate-run
Correct Answer :
A. In the long-run
Related Questions
Which of the following is not a feature of isoproduct curves?
Are downward sloping to the right
Show different input combination producing the same output
Intersect each other
Are convex to the origin
Of the following commodities, which has the lowest price-elasticity of demand?
Car
Salt
Tea
House
Economic laws are:
Conditional
Moral by nature
Predicted
Like laws of sports
Demand is elastic when the coefficient of elasticity is:
greater than zero
less than one
greater than one
less than one
Who is the founder of classical school of thought?
David Ricardo
Adam Smith
T.R.Malthus
J.S.Mill
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
Money spent by a firm on the purchase of capital equipment is:
Fixed cost
Variable cost
Both fixed and variable costs
None of the above
Consumers are likely to get a variety of similar goods under:
Monopoly
Perfect competition
Duopoly
Monopolistic competition
One way the government can induce a monopolist to expand his output is by imposing:
A specific tax on the monopolists output
A price ceiling that make the monopolist lower his price
A price floor that make the monopolist raise his price
A heavy tax on the monopolists profit
The combination of labor and capital where the cost of a given output is minimized is known as:
Least cost factor combination
Optimum factor combination
Both a and b
None of them
Which of the following is not characteristic of perfect competition?
Freedom of entry and exit
Each seller is a price taker
Perfect information about prices
Heterogeneous products
Pure monopoly exists:
When there is a single producer
When there is a single producer without any close substitute
When there is a single producer with close substitutes
When a few producers control the industry
In monopoly:
The producer will often produce a volume that is less than the amount which would maximize the social welfare.
The producer will often produce a volume that is more than the amount which would maximize the social welfare.
The consumers will often consume a volume that is more than the amount which would maximize the social welfare.
None of the above
In Edgeworth model, price remains:
Constant
On increasing
Independent
Indeterminate
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
The budget line is described by each of the following except:
Prices of products are assumed to be fixed
The consumer need not to spend all his income
Consumer income is assumed to be fixed
The slope represents relative prices
Theory of revealed preference is based on:
Weak orderings
Neutral orderings
Partial orderings
Strong orderings
The maximization of output subject to cost requires equilibrium at the:
Lowest isoquant
Lowest isocost line
Highest isoquant
Highest isocost line
Because of selling costs, the demand curve of a firm shifts:
Downward
Upward
Horizontal
Straight line
The giffen paradox is an exception to law of:
Supply
Demand
Production
Consumption
If two goods are perfect substitutes then IC will be:
Concave to the origin
Convex to the origin
Positively sloped
Negatively sloped
In the case of a giffen good, the income effect:
Is equal to the substitution effect
More than offsets the substitution effect
Reinforces the substitution effect
Only partially offsets the substitution effect
A good tends to have relatively inelastic demand, if:
Close substitutes are available
It has a high price
It is a luxury
It has no very close substitutes
When the law of demand operates the demand curve:
Slopes downward
Slopes upward
Becomes horizontal
Becomes vertical
The MC curve cuts the AVC and ATC curves:
At different points
At the falling parts of each
At their respective minimums
At the rising parts of each
In monopolistic competition, the firms follow:
Exotic behavior
Sympathetic behavior
Myopia behavior
Regular behavior
If a straight line supply curve makes an intercept on the Y-axis, elasticity of supply is:
Equal to unity
Less than unity
More than unity
Zero
When total revenue is maximum in monopoly, elasticity of demand is:
E =1
E >1
E <1
E =0
Under perfect competition, at equilibrium, marginal cost is:
Less than marginal revenue
Equal to marginal revenue
More than marginal revenue
None of the above
A market demand schedule is obtained by adding individual demand schedules:
Horizontally
Vertically
Permanently
Perpetually