The law of Diminishing Marginal Utility implies that the marginal utility of a good decreases as:
It gets more expensive
A household consumes more of it
Preference changes
A households income goes up
Correct Answer :
B. A household consumes more of it
Related Questions
An economic model describing the working of an economy consists of:
Functional relationships
Family relationships
Economic position
Stagnant relationships
Which describes a competitive market?
Many buyers and many sellers
One seller, many buyers
One buyer, many sellers
Few sellers, many buyers
The indirect utility function is a homogeneous function of:
degree one
degree zero
degree less than one
degree greater than one
The average fixed cost (AFC) curve is asymptote to:
X-axis
Y-axis
Z-axis
None of the above
Isocost line shows the combinations of labor and capital where a firms budget is:
Fully spent
Half spent
Partially spent
Nearly spent
The utility function u = f(x) is based upon :
Two goods
Few goods
One good
Zero goods
The elliptical isoquant represents the:
Economic combinations of labor and capital
Uneconomic combinations of labor and capital
Both a and b
None of the above
The firm is said to be in equilibrium when the difference between revenue and cost is:
Maximum
Minimum
Zero
One
The Prisoners Dilemma was presented by A.W.Tucker in:
1910
1945
1900
1940
When sales tax is imposed on monopolist, its:
Output is effected
Equilibrium is effected
Input is effected
Reputation is effected
In 1932, The nature and significance of economic science was written by:
Prof. Adam Smith
Prof. Alfred Marshal
Prof. Robbins
J.S.Mill
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
In a socialist (communist) economy the invisible hand:
Guides most resource allocation decisions
Operates effectively only in the labor market
Operates effectively only in the market for capital
Is prevented from operating effectively
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
Extension (expansion) of demand means:
More quantity demanded at a lower price
More quantity demanded at a higher price
More quantity demanded at the same price
None of the above
LMC represents change in LTC (long-run total cost) due to producing an additional unit of a good while the fixed and variable factors:
Cannot be changed
Can be changed
Can partially be changed
None of the above
According to critics, the assumption of costless production is:
true
not true
reliable
deniable
The supply curve for the short-run competitive firm is the same as:
Marginal cost curve
Average variable cost curve
That part of the marginal cost curve which equals or is greater than AVC
Average total cost curve
Moving along an indifference curve leaves the consumer:
Better off
Worse off
Neither better nor worse off
None of the above
Identify the author of The Social Framework:
R.G.D.Alien
J.R.Hicks
A.C.Pigou
None of the above
In monopolistic competition, the firms face:
Horizontal demand curve
Vertical demand curve
Similar demand curve
Differential demand curve
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
The Purchasing Power Parity (PPP) Theory is presented by:
J.M.Keynes
E.D.Domar
Adam Smith
Gustav Cassel
Total variable costs in equation form are:
The low cost price leader will charge:
higher prices
zero prices
lower prices
specific prices
The income effect means that consumer purchase more when:
Price falls
Price increases
Price is unchanged
Taste changed
The general markets results from the imposition of price ceilings has been:
Higher prices
Increased prices
Increased consumption
Shortage of products
An inferior good/ commodity is inferior for:
Every consumer
Most consumers
All consumers
Some consumers and not for others
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
Monopolistic firm can fix:
Both price and output
Either price or output
Neither price nor output
None of the above