The Hicksian demand curve includes:
Substitution effect
Income effect
Both substitution and income effect
None of them
Correct Answer :
A. Substitution effect
Related Questions
When a competitive firm is in equilibrium in the long-run, its output is such that:
Costs per unit of output are lowest
Total profits are highest
Marginal cost is lowest
Profit per unit of output is zero
Moving down along a linear demand curve:
Demand becomes less elastic
Elasticity does not change
Demand has unitary elasticity
Demand becomes more elastic
The Chamberline model recognizes mutual:
Independence of firms
Interdependence of firms
Independence of individuals
Interdependence of materials
A vertical supply curve parallel to the price axis implies that the elasticity of supply is:
Zero
Infinite
Equal to one
Greater than zero but less than infinite
Discriminating monopoly implies that the monopolist charges different prices for his commodity:
From different groups of consumers
For different uses
At different places
Any of the above
If two goods are complements then indifference curve (IC) will be:
Straight line
Convex to origin
Concave to origin
Lshaped
The products, under monopolistic competition are differentiated, yet they are:
Complements
Close substitutes
Both a and b
None of the above
Price leadership is associated with:
Collusive oligopoly
Non-collusive oligopoly
Cartel
Perfect 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
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
The kink demand curve faced by an oligopolist is based on the assumption that:
Competitors will follow a price increase but not a price cut
Competitors will follow a price increase as well as a price cut
Competitors will ignore both a price increase and a price cut
Competitors will ignore a price increase but will follow a price cut
Identify the work of Irving Fisher:
Policy on trade
Policy against inflation
The making of index numbers
Labor theory
Law of Returns to Scale shows:
Technical relationship between input of a variable factor and the resulting output
Any economic relationship between input and output
An output maximizing relationship
A relationship with input changing and corresponding changes in output
A dominant strategy can best be described as:
A strategy taken by a dominant firm
A strategy taken by a firm in order to dominate its rivals
A strategy that is optimal for a player no matter an opponent does
A strategy that leaves every player in a game better off
If the commodity is normal then Income Effect (I.E) is:
Negative
Positive
Zero
Infinite
Rent is a creation of value, not of wealth who made this observation?
Adam Smith
David Ricardo
Alfred Marshal
A.C.Pigou
A firm considering what type of new plant to build is involved in a:
Immediate-run decision
Market period decision
Short-run decision
Long-run decision
If the slope of the isoquant is equal to the slope of isocost, then isoquant is:
Concave to the origin
Convex to the origin
Tangent to the origin
None of the above
The ordinary demand curve is also called:
Marshallian demand curve
Hicksian demand curve
Slutsky demand curve
All the above
Most of the supply curves with which the average consumer deals are:
Vertical
Horizontal
Controlled by the largest producers
Unaffected by inflation
When elasticity of demand is less than one (e<1), then following the formula MR=P[1-1/e], the MR will:
Positive
Negative
Zero
None of the above
According to Marginalists, the price of any commodity is determined by:
Marginal usefulness
Marginal cost
Both of them
None of them
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
The point where the supply and demand curves intersect on a graph determines:
Market price
Equilibrium price
Long-term price
Short-term price
Which of the following is assumed to be constant when drawing a demand curve?
Consumer tastes
Prices of inputs
Technology
Number of sellers
When sales tax is imposed on monopolist, its:
Output is effected
Equilibrium is effected
Input is effected
Reputation is effected
In monopolistic competition, the aim of the firm is to:
Maximize output
Minimize output
Minimize cost
Maximize profit
Who wrote Economics of Imperfect Competition?
E.H.Chamberlin
Joan Robinson
E.A.G.Robinson
J.M.Keynes
Traditionally, the study of determination of price is called:
Theory of price
Theory of value
Theory of labor
Theory of cost
Whenever a group of monopolistic competitors attains equilibrium, the firms in this group usually:
Charge different prices, but produce identical outputs
Produce different outputs, but charge identical prices
Charge different prices, and produce different outputs
None of the above