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4

When the slope of a demand curve is zero (also known as vertical demand curve) then elasticity will be:

A. Zero (perfectly inelastic)

B. Equal to one (unitary elastic)

C. Infinite (perfectly elastic)

D. None of the above

Correct Answer :

C. Infinite (perfectly elastic)


Related Questions

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4

While buying two goods X and Y with unequal prices, to maximize total utility from his income, a consumer should get:

A. Equal MU from both commodities X and Y

B. More MU from commodity X than from commodity Y

C. More MU from commodity Y than from commodity X

D. Equal marginal utility from the last rupee spent on commodity X and commodity Y

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4

A significant property of the Cobb-Douglas production function is that the elasticity of substitution between inputs is:

A. Greater than one

B. Less than one

C. Zero

D. Equal to one

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4

If a ten percent increase in price causes a ten percent reduction in quantity demanded, elasticity of demand is:

A. Perfectly elastic

B. Elastic

C. Unitary elastic

D. Inelastic

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4

When was Adam Smiths major work An Enquiry into the Nature and Causes of Wealth of Nations published?

A. 1756

B. 1777

C. 1776

D. 1801

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4

The short-run periods in monopolistic competition are:

A. Parallel to each other

B. Dependent upon each other

C. Independent of each other

D. Zero

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4

Extension (expansion) of demand means:

A. More quantity demanded at a lower price

B. More quantity demanded at a higher price

C. More quantity demanded at the same price

D. None of the above

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4

Revealed Preference Theory was presented by:

A. Ricardo

B. Adam Smith

C. Pigou

D. Samuelson

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4

The game theory was basically presented by:

A. Ricardo

B. Marshal

C. Neomann and Morgenstern

D. Karl Marx

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4

The low cost price leader will charge:

A. higher prices

B. zero prices

C. lower prices

D. specific prices

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4

When the slope of a demand curve is zero (also known as vertical demand curve) then elasticity will be:

A. Zero (perfectly inelastic)

B. Equal to one (unitary elastic)

C. Infinite (perfectly elastic)

D. None of the above

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4

The falling part of total Utility (TU) curve shows:

A. Increasing marginal utility

B. Decreasing marginal utility

C. Zero marginal utility

D. Negative marginal utility

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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

An optimum level of a firms output is:

A. Where marginal cost is minimum

B. Where average cost is minimum

C. Where both the marginal and the average cost curves are at their respective minimum

D. Where the firm earns the maximum profits

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4

A fall in demand for the product under monopolistic competition will likely result in:

A. A fall in price

B. A decrease in the number of firms in the long-run

C. A decrease in the output of each firm

D. All of the above

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4

Average Revenue means:

A. Per unit revenue received from all the units sold by the producer

B. Revenue of the units having average size

C. Total number of units× Revenue per unit

D. Total revenue × Number of units sold

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4

Who first used the term Quasi-Rent?

A. David Ricardo

B. Alfred Marshal

C. J.S.Mill

D. Karl Marx

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4

Contraction of demand means:

A. Less quantity demanded at the same price

B. Less quantity demanded at a higher price

C. Less quantity demanded at a lower price

D. None of the above

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4

The Prisoners Dilemma was presented by A.W.Tucker in:

A. 1910

B. 1945

C. 1900

D. 1940

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4

Identify the author of The Affluent Society?

A. Gunnar Myrdal

B. N.Kaldor

C. A.C.Pigou

D. J.K.Galbraith

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4

According to Marshal, the Law of Diminishing Marginal Utility:

A. Applies on both money and other commodities

B. Does not apply on money

C. Does not apply on bank money but applies on cash money

D. Applies on all the commodities except on money

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4

Theory of revealed preference is based on:

A. Weak orderings

B. Neutral orderings

C. Partial orderings

D. Strong orderings

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4

Formulation of an economic theory involves:

A. Statements of various assumptions or postulates

B. Logical deductions from the assumptions made

C. Testing the hypothesis against empirical evidence

D. All of the above

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4

The income consumption curve (ICC) is the locus of points of consumer equilibrium resulting:

A. Only when the price of commodity X changes

B. Only when the price of commodity Y changes

C. Only when the consumers income is varied

D. None of the above

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4

When with a change in price the total outlay (expenditures) on a commodity remains constant, it is a case of:

A. Perfect elasticity (infinitely elastic)

B. Perfect inelasticity (zero elasticity)

C. Unit elasticity

D. Zero elasticity (infinitely inelastic)

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4

In cournot model, each firm expects a reaction from his rival but the expected reaction is not:

A. important

B. materialized

C. accepted

D. rejected

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4

The short-run supply curve of the perfectly competitive firm is given by:

A. The rising portion of its MR over and above the break-even (shut-down) point

B. The rising portion of its MC over and above the break-even (shut-down) point

C. The rising portion of its MC over and above the AC curve

D. The rising portion of its MC curve

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4

According to Marshallian approach, utility:

A. Can be added

B. Can be subtracted

C. Can be multiplied

D. Can be divided

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4

The monopolist often lead to exploitation of:

A. Producers

B. Workers

C. Managers

D. Consumers

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4

The total utility (TU) curve is:

A. Concave to X-axis

B. Convex to X-axis

C. Concave to Y-axis

D. Convex to Y-axis

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4

Price elasticity of demand is best defines as:

A. Change in the tastes of consumers at different prices

B. The rate of response of demand to a change in supply

C. The change in costs when output is increased by one unit

D. The responsiveness of demand to a change in price