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)
Correct Answer :
C. Unit elasticity
Related Questions
Economics define technology as:
Societys knowledge of production
Applied science
Knowledge of science and mathematics
None of the above
A straight line, downward-sloping demand curve implies that, as price falls, the elasticity of demand:
Increases
Decreases
Remains the same
Is zero
If two households have identical preferences but different incomes then:
They must consume the same amounts of all goods
The wealthier one will have lower marginal utility for most goods
The wealthier one will have higher marginal utility for most goods
They will enjoy the same level of utility
If the commodity is inferior then the Income Effect (I.E) and the Substitution Effect (S.E):
Both move together and reinforce each other
One moves and the other remains constant
Move in the opposite direction and neutralize each other
Both remain constant
In monopolistic competition, the real differentiation in products is due to difference in:
Style
Consumer
Cost
Material
In Prisoners Dilemma, both the prisoners are interrogated:
Separately in different cells
Collectively in different cells
Collectively in same cell
Separately in same cell
If the prices of goods rise then:
The real income of consumer falls
The real income of consumer rises
The real income of a consumer remains constant
The real income of consumer becomes zero
If the commodity is normal then price effect is:
Negative
Inverse
Positive
Both (a) and(b)
Price discrimination is undertaken with the aim of:
Increasing sales and maximizing profits
Reducing sales and raising prices
Minimizing cost and maximizing revenue
Serving the markets without earning profits
Engel curves shows that:
How commoditys consumption rate differs at various levels of price
How commoditys consumption rate differs at various levels of satisfaction
How commoditys consumption rate differs at various levels of income
How commoditys consumption rate differs at various levels of taxes
An income demand curve of an inferior good is:
Upward sloping
Downward sloping
Constant in slope
None of the above
The income effect means that consumer purchase more when:
Price falls
Price increases
Price is unchanged
Taste changed
In a socialist (communist) economy the invisible hand:
Guides most resource allocation decisions
Operates effectively only in the labor market
Operates effectively only in the market for capital
Is prevented from operating effectively
Which of the following would be least likely to cause a consumer to eat less beef?
An increase in the price of beef
An increase in the price of lamb
A reduction in the consumers income
A reduction in the price of lamb
The concept of product differentiation was firstly introduced by:
Smith
Kaldor
Sraffa
Marshal
A high value of cross-elasticity indicates that the two commodities are:
Very good substitutes
Poor substitutes
Good complements
Poor complements
Contraction in demand occurs when:
Price increases and demand decreases
Price increases but demand also increases
Price remains constant but demand falls down
Price falls down but demand remains constant
Two policy variables, product and selling activities in the theory of firm was introduced by:
Chamberline
Sraffa
Carl marx
Robinson
If a ten percent increase in price causes a ten percent reduction in quantity demanded, elasticity of demand is:
Perfectly elastic
Elastic
Unitary elastic
Inelastic
If in the long run, output increases in the same proportion as increase in all the input in the given proportion, this is known as:
Increasing returns to scale
Decreasing returns to scale
Constant returns to scale
Variable returns to scale
In monopoly, when average revenue curve falls:
MR constant
MR rises
MR falls
MR is zero
The production possibility curve (PPC) is concerned with:
Resources of the economy
Interests of the economy
Limitations of the economy
Qualities of the economy
The point where the supply and demand curves intersect on a graph determines:
Market price
Equilibrium price
Long-term price
Short-term price
The minimization of costs subject to output requires equilibrium at the lowest:
Isoquant line
Isocost line
Indifference curve
Price line
The supply curve would probably shift to the right if:
Resource( factors of production) used in production became more costly
The technology of production improves
Consumers income increased
Some sellers left the market
When elasticity of demand is greater than one (e >1), then following the formula MR=P[1-1/e], the MR will:
Positive
Negative
Zero
None of the above
If the price of product increases and in the result the demand for product B also increases then:
A and B are substitute goods
A and B are complementary goods
A is inferior to B
A is superior to B
Utility is:
A subjective concept
An ethical concept
An objective concept
A historical concept
Nash Equilibrium is stable:
They involve dominant strategies
They involves constant-sum games
Once the strategies are chosen, no player has an incentive to deviate unilaterally from them
None of the above
If the demand curve remains unchanged and supply increases, the price will:
Rise
Fall
Remain the same
None of the above