The Substitution Effect (S.E) is always:
Negative
Zero
Positive
Infinite
Correct Answer :
A. Negative
Related Questions
The slutsky demand curve includes:
Income effect
Price effect
Substitution effect
None of the above
If demand increased and supply decreased then:
Quantity exchanged might rise or fall and price would rise
Quantity exchanged would rise and price would fall
Quantity exchanged would rise and price might rise or fall
Both quantities exchanged and price would rise
According to law of Equi-Marginal Utility when price of commodity falls then we bought:
More units
Less units
Same units
Zero units
Under perfect competition, a firm will be in equilibrium if:
MC = MR
MC cuts the MR from below
MC rises when it cuts the MR
All the above three conditions are fulfilled
In the long run:
All factors can be used in different proportions
Management can be re-organized
A firm can experience returns to scale
All of the above
Demand is consumers:
Ability to get a commodity
Willingness to get a commodity
Willingness and ability to get a commodity
Desire for a commodity
The equilibrium level of output for the pure monopolist is where:
MR = MC
MR > MC
MR < MC
P < AC
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
The demand curve slopes downwards due to:
Income effect(I.E)
Substitution effect(S.E)
Taste effect
Both a and b
Substitution effect means a consumer
Shifts away from the commodity the price of which has fallen
Shifts in favour of a commodity the price of which has risen
Shifts away from a commodity the price of which has risen, in favour of a commodity the price of which has fallen
None of the above
The minimization of costs subject to output requires equilibrium at the lowest:
Isoquant line
Isocost line
Indifference curve
Price line
The coefficient of the price elasticity of demand is computed as the absolute value of the percentage change in quantity demanded divided by:
The change in price
The change in supply
The percentage change in supply
The percentage change in price
Of the following commodities, which has the lowest price-elasticity of demand?
Car
Salt
Tea
House
Ordinal approach includes arranging:
The different combinations of X and Y in any way the consumer wants
The different combinations of X and Y higher and lower and measuring the difference of utility between them
The different combinations of X and Y higher and lower and not measuring the difference of utility between them
None of above
In Edgeworth model, price remains:
Constant
On increasing
Independent
Indeterminate
The falling part of total Utility (TU) curve shows:
Increasing marginal utility
Decreasing marginal utility
Zero marginal utility
Negative marginal utility
MRSxy measures:
The amount of Y a consumer is willing to give up to obtain one additional unit of X and still remain on the same indifference curve
The amount of X a consumer is willing to give up to obtain one additional unit of Y and still remain on the same indifference curve
The amount of Y a consumer is willing to give up to obtain one additional unit of X and move to a higher indifference curve
The amount of X a consumer is willing to give up to obtain one additional unit of Y and move to a higher indifference curve
The costs faced by the firm against fixed factors are:
Total costs
Fixed costs
Variable costs
Marginal costs
In cournot model, at equuilibrium when MC = MR, the elasticity of demand is:
equal to one
zero
negative
equal to 2
Total fixed costs are:
The proportional demand curve in monopolistic competition (also in kinked demand curve model), is like industry demand curve in:
Monopolistic competition
Imperfect competition
Monopoly
Perfect competition
If there are many firms producing similar but differentiated products, the competition is generally said to be:
Oligopoly
Pure competition
Perfect competition
Monopolistic competition
Scarcity is:
A relative term
An economic term
A dynamic term
As a whole term
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
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
When with a change in price the total outlay (expenditures) on a commodity remains constant, it is a case of:
Perfect elasticity (infinitely elastic)
Perfect inelasticity (zero elasticity)
Unit elasticity
Zero elasticity (infinitely inelastic)
Technological Progress (Invention) can be defined as:
Technological progress shifts the production function by allowing the firm to achieve more output from a given combination of inputs (or the same output with fewer inputs)
Technological progress shifts the production function by allowing the firm to achieve less output from a given combination of inputs (or the same output with more inputs)
Technological progress shifts the import function to the right
None of the above
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
In monopolistic competition, the customers are attached with one product because of:
Product similarity
Product differentiations
Product inferiority
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