Home

The substitution effect works to encourage a consumer to purchase more of a product when the price of that good is falling because:

A. The consumers real income has increased

B. The consumers real income has decreased

C. The product is now relatively less expensive than before

D. Other products are now less expensive than before

Correct Answer : C.


Download Objective type questions of Basics of Economics PDF

Visit our PDF store

Get all objective type questions of Basics of Economics MCQ

Also checkout these categories

Genetics MCQ Morphology of flowering plants MCQ MS Office MCQ Windows 2000 Server MCQ Internal Combustion MCQ Relativity MCQ Syllogism MCQ Gymnosperms MCQ Metabolism MCQ Building Construction MCQ ionic Equilibrium MCQ Computer Architecture MCQ

Please do not use chat terms. Example: avoid using "grt" instead of "great".

Submit
Load More..
You can do it
  1. The average cost curve is a geometrical illustration of:
  2. The effect of consumer boycotts usually is:
  3. The optimal strategy for a player is termed as:
  4. We get constant returns to scale when:
  5. Average cost curve contains in it:
  6. When with a change in price the total outlay (expenditures) on a commodity remains constant, it is a…
  7. When total product (TP) is maximum:
  8. In short run, a firm would remain in business as long as which one of the following of cost is covered?
  9. Who finalized the model of monopolistic competition?
  10. Iso-product curve (isoquant) shows:
  11. When total revenue is maximum in monopoly, elasticity of demand is:
  12. The difference between average cost and average revenue is:
  13. The ordinal approach was presented by:
  14. At high prices, demand is likely to be:
  15. Which describes a competitive market?
  16. The slope of indifference curve shows:
  17. The demand of the necessities is:
  18. A decrease in demand lowers the price the most:
  19. Indifference curves are downward sloping and are drawn bowed toward the origin (convex to the origin)…
  20. In the modern theory of costs, the level of production which the firm considers feasible is known as:
  21. The cost curves of the firm shift due to changes in:
  22. When AC curve falls, MC curve falls:
  23. In Edgeworth model, price remains:
  24. In cournot model, each firm makes decision regarding:
  25. According to Robbins, economics is a:
  26. If X and Y are close substitutes, a fall in price of X will lead to:
  27. The number of sellers in oligopoly is:
  28. If there are many producers, each of whom has an individual production possibility curve, then the lowest…
  29. An inferior commodity is one whose quantity demand decreases when income of the consumer:
  30. When elasticity of demand is one (e=1), then following the formula MR=P[1-1/e], the MR will: