The elasticity of substitution measures the percentage change in the ratio of inputs when any producer observes the percentage change in:
Output cost
Output ratio
Input prices
Input ratio
Correct Answer :
C. Input prices
Related Questions
Of the following, which one is a characteristic of monopolistic competition?
Standardized product
Differentiate product
Two firms
No entry
In monopolistic competition, the firm take advantage due to customers:
Similar choices
Unlimited choices
Differential choices
Few choices
Microeconomics is also known as:
Price theory
Demand theory
Supply theory
Income theory
The cross-price elasticity of the demand for orange juice with respect to the price of apple juice is probably:
Negative
Positive
Near infinite
Zero
Neutral Technological Progress can be defined as:
Technological progress that causes to raise the marginal product of capital and labor in the same proportion
Technological progress that causes the marginal product of capital to increase relative to the marginal product of labor
Technological progress that causes the marginal product of labor to increase relative to the marginal product of capital
None of the above
In case of monopoly, the slope of MR is:
Always three times than the slope of AR
Always double than the slope of AR
Always equal to the slope of AR
None of the above
Each firm in cournot model can:
not ignor the activities of the rival
ignor the activities of the rival
both a and b
none of the above
In short run:
Labor is variable
Labor is fixed
Capital is variable
None of the above
Because the price elasticity of demand for OPEC oil is approximately .08, in order to increase revenues OPEC should:
Lower price in order to increase revenues
Lower price in order to decrease the amount of oil sold
Rise price in order to increase the amount of oil sold
Raise price in order to increase revenues
In Nash equilibrium, a player:
Deviates from his strategy
Does not deviate from his strategy
Does not think in a good way
None of the above
Identify the author of The Affluent Society?
Gunnar Myrdal
N.Kaldor
A.C.Pigou
J.K.Galbraith
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
Which of the following goods is most likely to be exchanged in a market of local rather than national scope?
University professors
Computer components
Building materials
Jet airplanes
Perfect competition assumes:
All buyers and sellers have perfect knowledge of the market
Freedom of entry of firms into the industry
Homogeneous product
All of the above
The pay-off matrix shows:
Possible outcomes
Possible benefits
Possible losses
None of them
Each short run average cost curve:
Has to touch the long run cost curve
Has to cross the long run cost curve
Has to lie above all points on the long run cost curve
Coincides with the long run cost curve at some point
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
Who formulated the Post-Keynsian Theory of Distribution and Growth?
J.M.Keynes
N.Kaldor
C.P.Kindleberger
Irving Fisher
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
In monopoly, the relationship between average revenue and marginal revenue curves is as follows:
Average revenue curve lies above the marginal revenue curve
Average revenue curve coincides with the marginal revenue curve
Average revenue curve lies below the marginal revenue curve
Average revenue curve is parallel to the marginal revenue curve
Marginal revenue from a given output:
The price at which the marginal unit sells
Total revenue sale of all units divided by volume of sales
Average revenue of total output average revenue of last unit
The change in total revenue resulting from the sale of one unit more of output
In repeated game, the Prisoners Dillemma can have a:
Non-cooperative outcome
Cooperative outcome
Dominant behavior
Recessive behavior
One common definition of a luxury good is a good with income elasticity:
Greater than one
Equal to one
Less than one but more than zero
None of the above
The difference between the average total cost and average variable cost as output increases will:
Increases
Remains the same
Diminishes
Zero
The Tit for Tat strategy means cooperation by the 2nd firm if:
1st firm does not cooperate
1st firm cooperates
1st firm collapses
None of the above
Who is the founder of classical school of thought?
David Ricardo
Adam Smith
T.R.Malthus
J.S.Mill
In discriminating monopoly (price discrimination), the elasticity of demand of product in two markets are:
Different
Same
Zero
None of the above
The maximization of output subject to cost requires equilibrium at the:
Lowest isoquant
Lowest isocost line
Highest isoquant
Highest isocost line
A firm is a sum of persons who convert:
Goods into services
Output into inputs
Inputs into outputs
None of the above
Compared to perfect competition, a monopolist will charge:
Charges a high price
Produce more output
Increase economic efficiency
None of the above