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4

To get more revenue, a Finance Minister impose tax on that commodity which has:

A. Inelastic demand

B. Elastic demand

C. Unit elasticity

D. Zero elasticity

Correct Answer :

A. Inelastic demand


Related Questions

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4

When a competitive firm is in equilibrium in the long-run, its output is such that:

A. Costs per unit of output are lowest

B. Total profits are highest

C. Marginal cost is lowest

D. Profit per unit of output is zero

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4

In monopolistic competition, the firms follow:

A. Exotic behavior

B. Sympathetic behavior

C. Myopia behavior

D. Regular behavior

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4

In Prisoners Dillemma, the players are:

A. Industrialists

B. Prisoners

C. Common men

D. Workers

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4

The general form of Cobb-Douglas production function is:

A.

B.

C.

D.

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4

In sweezy model (kinked demand curve model), the role of MC curve:

A. Can be ignored

B. Cannot be ignored

C. Partially be ignored

D. None of the above

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4

According to Marginalists, the price of any commodity is determined by:

A. Marginal usefulness

B. Marginal cost

C. Both of them

D. None of them

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4

The budget-line is also known as the:

A. Iso-utility curve

B. Production possibility line

C. Isoquant

D. Consumption possibility line

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4

Market demand curve is:

A. Vertical summation of individual demand curves

B. Upward summation of individual demand curves

C. Downward summation of individual demand curves

D. Horizontal summation of individual demand curves

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4

The behavior of MC curve is determined by the behavior of the:

A. AC curve

B. SC curve

C. TC curve

D. None of the above

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4

For the given production function, technical efficiency is defined as:

A. Sets of points relating production function that maximizes output given input (labor) i.e. Q = f(L, K)

B. Sets of points relating production function that produces less output than possible for a given set of input (labor) i.e. Q < f(L, K)

C. Use of imported technology

D. None of the above

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4

Indifference curve approach (ordinal approach) is superior to utility approach (cardinal approach) because:

A. In ordinal approach we can separate the income effect from the substitution effect of a price change

B. In ordinal approach we can study the consumer behavior more closely

C. In ordinal approach the consumer is assumed more rational

D. In ordinal approach the consumer has more income

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4

In case of perfect competition, TR curve rises at a:

A. Constant rate

B. Decreasing rate

C. Increasing rate

D. None of the above

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4

The right of individuals to control productive resources is known as:

A. Monopoly

B. Private property

C. Workable competition

D. Oligopoly

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4

The shape of the TC curve is:

A. U

B. V

C. P

D. S(inverted)

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4

Which of the following is an implicit cost of production?

A. Wages of the labor

B. Charges of electricity

C. Interest on owned money capital

D. Payment for raw materials

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4

In the long run:

A. All factors can be used in different proportions

B. Management can be re-organized

C. A firm can experience returns to scale

D. All of the above

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4

A high value of cross-elasticity indicates that the two commodities are:

A. Very good substitutes

B. Poor substitutes

C. Good complements

D. Poor complements

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4

If two goods are perfect substitutes then IC will be:

A. Concave to the origin

B. Convex to the origin

C. Positively sloped

D. Negatively sloped

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4

In income effect, we:

A. Move to another indifference curve

B. Move along given indifference curve

C. Move to lower indifference curve

D. Move to upper indifference curve

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4

In the short-run, in which one of the following situations would a competitive seller close down (shut-down)?

A. When he cannot produce at an economic profit

B. When price falls short of average variable cost at every level of output

C. When price falls short of average fixed cost at every level of output

D. When price falls short of average total cost at every level of output

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4

The largest possible loss that a firm will make in the short run is:

A. Zero

B. Its total fixed cost

C. Its total variable cost

D. Equal to one

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4

When elasticity of demand is one (e=1), then following the formula MR=P[1-1/e], the MR will:

A. Positive

B. Negative

C. Zero

D. None of the above

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4

Scarcity is:

A. A relative term

B. An economic term

C. A dynamic term

D. As a whole term

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4

Supply curves are most elastic:

A. In the long-run

B. In the short-run

C. For luxuries

D. In the immediate-run

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4

According to M.Kalecki, the true measure of the degree of monopoly power is the:

A. Ratio between price and marginal cost

B. Extent of monopolistic profit enjoyed by him

C. Cross-elasticity of demand for the product of the monopolist

D. Price charged by the monopolist minus marginal cost of production

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4

Cross-elasticity of demand or cross-price elasticity between two perfect complements will be:

A. Negative

B. Positive

C. Infinite

D. Negative infinite

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4

The slope of isocost line (budget line) shows:

A. Capital labor ratio

B. Labor wage ratio

C. Factor price ratio

D. Factor labor ratio

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4

Normally when price per unit of time falls:

A. Quantity demanded increases

B. Quantity demanded decreases

C. Quantity demanded remains constant

D. Quantity demanded becomes zero

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4

Using total revenue and total cost, a profit maximizing firm will be equilibrium at a point:

A. Where the gap between the two is the smallest

B. Where the gap between the two is the greatest

C. Where the two become equal

D. None of the above

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4

If as a result of an increase in prices, total outlay (expenditures) on a commodity decreases, its price-elasticity of demand is:

A. Perfect elastic (infinitely elastic)

B. Relatively elastic (greater than one elasticity)

C. Unit elastic

D. Relatively inelastic (less than one elasticity)