The greater the percentage of income spent on a commodity:
The greater its elasticity is likely to be
The weaker its elasticity is likely to be
The unchanged its elasticity is likely to be
None of the above
Correct Answer :
A. The greater its elasticity is likely to be
Related Questions
The vertical distance between TVC and TC is equal to:
MC
AVC
TFC
AC
If production increases under increasing returns to scale, the cost will:
Increase at decreasing rate
Increase at constant rate
Decrease at increasing rate
Increase at increasing rate
Liquidity of Preference Theory was introduced by:
Alfred Marshal
Lord Keynes
Karl Marx
Prof. Robbins
If a ten percent increase in price causes a ten percent reduction in quantity demanded, elasticity of demand is:
Perfectly elastic
Elastic
Unitary elastic
Inelastic
Government planners play a central role in allocating resources:
Only under socialism(communism)
Only under capitalism
Under both (a) and (b)
None of the above
According to Cobb-Douglas, in production function the marginal product of labor is:
In joint-profit maximization cartel, central agency sets the:
Output
Input
Demand
Price
The price under perfect competition is settled by:
Producers
Sellers
Buyers
Sellers and buyers
If Cobb-Douglas production function is homogeneous of degree greater than one (n>1), then it shows:
Constant returns to scale
Increasing returns to scale
Decreasing returns to scale
None of the above
If production increases under constant returns to scale, the cost will:
Increase at a constant rate
Decrease at a constant rate
Increase at a variable rate
Decrease at a variable rate
Under monopolistic competition, the firms compete alongwith:
Supreme powers
Discretionary powers
Low powers
None of the above
The firms in non-cooperative games:
Enforce contracts
Make contracts
Make negotiations
Do not make negotiations
In case of income effect, the level of consumers satisfaction rises when:
Income rises
Income falls
Sales rises
Price falls
The concept of product differentiation was firstly introduced by:
Smith
Kaldor
Sraffa
Marshal
At the point where a straight line demand curve meets the quantity axis (x-axis), elasticity of demand is:
Equal to zero
Equal to one
Equal to infinite
More than one
The demand curve in monopolistic competition (also in kinked demand curve model), which shows the share of a firm in market is called:
Relative demand curve
Proportional demand curve
Productive demand curve
Differential demand curve
A high value of cross-elasticity indicates that the two commodities are:
Very good substitutes
Poor substitutes
Good complements
Poor complements
Perfect competition implies:
Differentiated goods
Homogeneous goods
Advertised goods
Distress sale of goods
Identify the work of Irving Fisher:
Policy on trade
Policy against inflation
The making of index numbers
Labor theory
In cournot model, firms face:
Negatively sloped demand curve
Positively sloped demand curve
Horizontal demand curve
Vertical demand curve
If cross-elasticity of one commodity for another turns out to be zero, it means they are:
Close substitutes
Good complements
Completely unrelated (independent goods)
None of the above
If money income is given then consumer is in equilibrium when:
MU < P
MU >P
MU = P
MU = 0
If in the long run, output increases in the same proportion as increase in all the input in the given proportion, this is known as:
Increasing returns to scale
Decreasing returns to scale
Constant returns to scale
Variable returns to scale
The income consumption curve (ICC) is the locus of points of consumer equilibrium resulting:
Only when the price of commodity X changes
Only when the price of commodity Y changes
Only when the consumers income is varied
None of the above
If a firm is producing output at a point where diminishing returns have set in, this means that:
Each additional unit of output will be more expensive to produce
Each additional unit of output will require increasing amount of inputs
Marginal product of the variable factor of production decreases as the quantity increases
All of the above
If a consumer buys a product that costs Rs.3 and provides an additional 18 units of satisfaction, then for this purchase:
Total utility will increase by 6 units
The marginal utility per rupee is 6
The consumer will buy more because marginal utility is positive
The consumer obtained an extra54 units
At a point above the middle of a straight line demand curve, elasticity of demand is:
Less than one
Equal to one
More than one
Equal to infinite
In case of monopoly, the price charged against the additional unit is:
Not different
Same
Not same
Zero
The slope of budget line shows the price ratios of:
Many goods
Few goods
Two goods
Three goods
The real income of a consumer is income in terms of:
Goods
Goods and survices
Goods and survices it can purchased
Monetary units