Suppose income increases by 10% and demand for commodity increases by 5% then the income elasticity of demand is:
Negative
Positive
Zero
Infinity
Correct Answer :
B. Positive
Related Questions
In 1932, The nature and significance of economic science was written by:
Prof. Adam Smith
Prof. Alfred Marshal
Prof. Robbins
J.S.Mill
In the case where two commodities are good substitutes then cross elasticity will be:
Positive
Unitary
Negative
Infinite
In terms of price, the indirect utility function may be:
Concave
Quasi-convex
Straight line
Convex
In respect of which of the following category of goods is consumers surplus highest?
Giffen goods
Necessities
Luxuries
Prestige goods
The main contribution of Alfred Marshal is in the field of:
Research in mathematical economics
Economics of labor
Theory of production
Theory of demand
Price discrimination is possible:
Only under monopoly situation
Under any market form
Only under monopolistic competition
Only under perfect competition
Short run cost curves are influenced by:
Principle of returns to scale
Law of variable proportions
External and internal economies and diseconomies
None of the above
The number of sellers in oligopoly is:
Two
One
Very large
A few
At the point where the straight line from the origin is tangent to the TC curve, AC is:
Maximum
Minimum
Equal
Lower
For a few products such as insulin for diabetics,:
The demand curve can be upward sloping
The price elasticity of demand could be zero
The price elasticity of demand could be greater than one
None of the above
The demand of the luxuries is:
More elastic
Less elastic
Unit elastic
Zero elastic
Given a U shaped average cost curve, the relationship between average cost and marginal cost is such that marginal cost must always be:
Falling when average cost is falling
Rising when average cost is falling
Falling when average cost is rising
Rising when average cost is rising
The demand curve slopes downwards due to:
Income effect(I.E)
Substitution effect(S.E)
Taste effect
Both a and b
Which of the following is not a property of indifference curve?
Convex to the origin
Slopes downwards to the right
Parallel to each other
Cannot intersect each other
Substitution effect means a consumer
Shifts away from the commodity the price of which has fallen
Shifts in favour of a commodity the price of which has risen
Shifts away from a commodity the price of which has risen, in favour of a commodity the price of which has fallen
None of the above
When the slope of a demand curve is infinite (also known as horizontal demand curve) then elasticity will be:
Zero (perfectly inelastic)
Equal to one (unitary elastic)
Infinite (perfectly elastic)
None of the above
A budget line shows:
Quantities of commodity X which a consumer could buy with no amount of Y
Quantities of commodity Y which a consumer could buy with no amount of X
The different combinations of X and Y that the consumer could buy
All of the above
The supply curve would probably shift to the right if:
Resource( factors of production) used in production became more costly
The technology of production improves
Consumers income increased
Some sellers left the market
Cross-elasticity of demand or cross-price elasticity between two substitutes will be:
Negative
Positive
Infinite
Zero
According to Marshal, the Law of Diminishing Returns is applicable to:
Industry
All fields of production
Agriculture
None of the above
Cross-demand curve shows:
The effect of a change in price of X on its demand
The effect of a change in price of X on the demand for Y
The effect of a change in price of Y on its demand
None of the above
The Law of Equi-Marginal Utility refers to:
Marginal utility of commodity X
Marginal utility of commodity Y
Marginal utility per rupee spent on X and Y commodities
None of the above
Dumping is international discriminating:
Monopoly
Oligopoly
Duopoly
None of the above
A fall in demand for the product under monopolistic competition will likely result in:
A fall in price
A decrease in the number of firms in the long-run
A decrease in the output of each firm
All of the above
Under monopolistic competition, the products sold by the firms are:
Economic substitutes
Technical substitutes
Both a and b
None of the above
The firm in cournot model:
face costs
face taxes
donot face taxes
donot face costs
While buying two goods X and Y with unequal prices, to maximize total utility from his income, a consumer should get:
Equal MU from both commodities X and Y
More MU from commodity X than from commodity Y
More MU from commodity Y than from commodity X
Equal marginal utility from the last rupee spent on commodity X and commodity Y
Identify the author of The Social Framework:
R.G.D.Alien
J.R.Hicks
A.C.Pigou
None of the above
Economics is a:
Physical science
Social science
Natural science
Basic science
Income -elasticity of demand will be zero when a given change in income brings about:
A less than proportionate change in quantity demanded
A more than proportionate change in quantity demanded
The same proportionate change in quantity demanded
No change in quantity demanded