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
Correct Answer :
B. The consumer need not to spend all his income
Related Questions
A monopolist has control over the price he charges for his product. He will be able to maximize his profit by:
Lowering the price, if the demand curve is elastic
Lowering the price, if the demand curve is inelastic
Rising the price, if the demand curve is elastic
None of the above is applicable
When AC curve falls, MC curve falls:
More than AC curve
Less than AC curve
Equal to AC curve
None of the above
The cost of production is faced by a:
Producer
Consumer
Seller
Firm
In the case of substitutes, the cross demand curve slopes
Downwards to the right
Upwards to the right
Backwards to the right
Inwards at the bottom
The largest possible loss that a firm will make in the short run is:
Zero
Its total fixed cost
Its total variable cost
Equal to one
In a perfectly competitive market, suppliers must know:
The incomes of consumers
The price of the good
What other commodities households could substitute for the good
Consumers expectations of the future
When the consumer is in equilibrium not only his income is fully spent, but the ratio of marginal utility and price is:
Increased
Equalized
Prominent
Zero
In constant sum game (zero sum game), if there are two parties then:
Both parties make better-off
Both parties make worse-off
Both parties become Neutral
One party can become better off only if another is made worse off
In joint-profit maximization cartel, central agency sets the:
Output
Input
Demand
Price
The firm in cournot model:
face costs
face taxes
donot face taxes
donot face costs
The vertical demand curve for a commodity shows that its demand is:
Highly elastic
Perfectly inelastic
Fairly elastic
Moderately elastic
Profits of a firm will be calculated taking into account the units produced and the difference between:
Real cost and money cost
Variable cost and fixed cost
Average cost and average revenue
Marginal cost and average cost
If a good is an inferior good then an increase in incomes of the consumers will:
Increase demand for the good
Increase supply of the good
Reduce the equilibrium price of the good
None of the above
If the commodity is normal then the Income Effect (I.E) and the Substitution Effect (S.E):
Both move together and reinforce each other
One moves and the other remains constant
Move in the opposite direction and neutralize each other
Both remain constant
Price leadership is associated with:
Collusive oligopoly
Non-collusive oligopoly
Cartel
Perfect competition
The situation of single buyer and single seller is called:
Monopoly
Multi-plant monopolist
Bilateral monopoly
Price discrimination
Stable cobweb model is a:
Simple model
Dynamic model
Both of them
None of them
In Edgeworth model, if price falls below competitive price, the demand is:
More than maximum output
More than minimum output
Less than maximum output
Less than minimum output
With which of the following concepts is the name of J.M.Keynes particularly associated?
Marginal propensity to consume
Marginal propensity to save
Liquidity preference
All of the above
Other things remaining the same, when a consumers income increases his equilibrium point moves to:
A lower indifference curve
A lower PPC curve
Remains on same indifference curve
A higher indifference curve
When the law of demand operates the demand curve:
Slopes downward
Slopes upward
Becomes horizontal
Becomes vertical
If the production increases under decreasing returns to scale, the cost will:
Increase at decreasing rate
Increase at constant rate
Decrease at increasing rate
Increase at increasing rate
If there are many firms producing similar but differentiated products, the competition is generally said to be:
Oligopoly
Pure competition
Perfect competition
Monopolistic competition
Law of Diminishing Marginal Utility is practically untrue because:
It is given to a lot of criticism
It is too difficult to be explained
It is based on assumptions which are unreal
Economists do not agree on this
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
Who wrote A Contribution to the Theory of Trade Cycle?
N.Kaldor
J.R.Hicks
A.C.Pigou
J.M.Keynes
In case of monopoly, TR curve rises at a:
Constant rate
Decreasing rate
Increasing rate
None of the above
Who is the author of Problems of Capital Formation in Underdeveloped Countries?
R.Nurkse
N.Kaldor
S.kuznets
Alfred Marshal
The horizontal demand curve for a commodity shows that its demand is:
Highly elastic
Perfectly inelastic
Perfectly elastic
Zero elastic
A country is advised to devalue (reduce external value of) its currency only when its exports face:
Inelastic demand in foreign markets
Elastic demand in foreign markets
Unit elastic demand in foreign markets
None of the above