Total Utility (TU) curve:
Always rises
Always falls
First falls and then rises
First rises and then falls
Correct Answer :
D. First rises and then falls
Related Questions
We get constant returns to scale when:
a = ½
� = ½
Both of them
None of them
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
The point where the supply and demand curves intersect on a graph determines:
Market price
Equilibrium price
Long-term price
Short-term price
Who is the founder of classical school of thought?
David Ricardo
Adam Smith
T.R.Malthus
J.S.Mill
Moving down along a linear demand curve:
Demand becomes less elastic
Elasticity does not change
Demand has unitary elasticity
Demand becomes more elastic
Supply and demand changes have their most rapid impact in:
Auction market
Contract markets
Market for commercial office space
Natural gas market
Which of the following has more elastic demand curve?
A commodity without substitutes
A commodity with substitutes
A commodity on which a small fraction of income is spent
A commodity the use of which cannot be postponed
In the case of superior (normal) commodity, the income elasticity of demand is:
Positive
Unitary
Negative
Infinite
The firm is at equilibrium where:
Output is maximum
Profit is maximum
Revenues are maximum
Profit is minimum
The firm is said to be in equilibrium when the difference between revenue and cost is:
Maximum
Minimum
Zero
One
In Edgeworth model, if price falls below competitive price, the demand is:
More than maximum output
More than minimum output
Less than maximum output
Less than minimum output
According to classical approach, utility can be:
Ranked
Consumed
Expressed in numbers
Cannot be expressed in numbers
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 arriving at stable equilibrium in cournot model, if one firm decreases output the other firm will:
Also decrease it
Increase it
Remain uneffected
None of the above
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
The concept of period refers to:
A specific duration of time
A varying duration of time
A duration of time which permits necessary adjustments
A period with calculated intervals
In monopoly, new firms:
Can enter and exit
Partially can enter and exit
Cannot enter
None of the above
The slope of isocost line (budget line) shows:
Capital labor ratio
Labor wage ratio
Factor price ratio
Factor labor ratio
When the level of optimal factor combination is over and more labor is employed with the fixed plant, the efficiency of labor:
Increases
Decreases
Remains constant
Becomes zero
The game theory is concerned with:
Perfect competition
Imperfect competition
Price discrimination
Duopoly and oligopoly
The income effect means that consumer purchase more when:
Price falls
Price increases
Price is unchanged
Taste changed
If the marginal utility of apples to a consumer exceeds that of bananas then the consumer:
Is not in equilibrium
Will not buy any banana
Will buy some banana but less than he buys of apples
Is willing to pay more for apples than bananas
The standard form of demand function is:
Q = a- bP
Y = a- bP
Q = a+ bP
The cournot model is a model of:
Instable equilibrium
Stable equilibrium
Constant equilibrium
Fluctuating equilibrium
The marshallian indirect utility function in the form of equation is:
x =a-bp
x =b-ap
x = f(P)
Identify the coefficient of price-elasticity of demand when the percentage increase in the quantity of a commodity demanded is smaller than the percentage fall in its price:
Equal to one
Greater than one
Smaller than one
Zero
In economic term water is a:
Free good
Economic good
Both of the above
None of the above
The demand curve of a firm in monopolistic competition is:
Negatively sloped
Vertical
Horizontal
Positively sloped
If as a result of an increase in prices, total outlay (expenditures) on a commodity decreases, its price-elasticity of demand is:
Perfect elastic (infinitely elastic)
Relatively elastic (greater than one elasticity)
Unit elastic
Relatively inelastic (less than one elasticity)
Perfect competition assumes:
All buyers and sellers have perfect knowledge of the market
Freedom of entry of firms into the industry
Homogeneous product
All of the above