Which of the following is called Gossens first law?
Law of production
The Law of Equi-Marginal Utility
The Law of Diminishing Marginal Utility
Law of Variable Proportions
Correct Answer :
C. The Law of Diminishing Marginal Utility
Gossen's laws, named for Hermann Heinrich Gossen (1810 - 1858), are three ostensible laws of economics: Gossen's First Law is the law of diminishing marginal utility: that marginal utilities are diminishing across the ranges relevant to decision-making. Gossen's Second Law, which presumes that utility is at least weakly quantified, is that in equilibrium an agent will allocate expenditures so that the ratio of marginal utility to price (marginal cost of acquisition) is equal across all goods and services.
Related Questions
At final equilibrium in cournot model, each firm sells:
1/2 of the total market demand
1/4 of the total market demand
1/3 of the total market demand
None of the above
In dominant price leadership model, the small firms are like:
monopolistic firms
monopoly
competitive firms
none of the above
The model which gives us information about price and output changes in different periods is:
Stable cobweb model
Perpetual oscillation
Both(a) and(b)
None of them
The number of sellers in oligopoly is:
Two
One
Very large
A few
The pay-off matrix shows:
Possible outcomes
Possible benefits
Possible losses
None of them
The production function of homogeneous of degree one (n=1) is also called:
Linearly homogeneous
Zero homogeneous
Infinite homogeneous
None of the above
A high value of cross-elasticity indicates that the two commodities are:
Very good substitutes
Poor substitutes
Good complements
Poor complements
The isoquant approach is based upon:
One output
One input
Two outputs
Two inputs
A market demand curve presumes that:
All consumers are alike
Incomes of all consumers is the same
Tastes of all consumers are the same
Consumers differ in taste, incomes and other matters
Cross-elasticity of demand or cross-price elasticity between two perfect complements will be:
Negative
Positive
Infinite
Negative infinite
An indifference curve normally slopes downward from:
Left to right
Right to left
Both of them
None of them
Indifference curve approach (ordinal approach) is superior to utility approach (cardinal approach) because:
In ordinal approach we can separate the income effect from the substitution effect of a price change
In ordinal approach we can study the consumer behavior more closely
In ordinal approach the consumer is assumed more rational
In ordinal approach the consumer has more income
Production indifference curve (isoquant) is a curve which shows:
Equal level of output
Unequal level of outputs
Equal level of inputs
Unequal level of inputs
In repeated game, the Prisoners Dillemma can have a:
Non-cooperative outcome
Cooperative outcome
Dominant behavior
Recessive behavior
In general, most of the production functions measure:
The productivity of factors of production
The relation between the factors of production
The economies of scale
The relations between change in physical inputs and physical output
Neutral Technological Progress can be defined as:
Technological progress that causes to raise the marginal product of capital and labor in the same proportion
Technological progress that causes the marginal product of capital to increase relative to the marginal product of labor
Technological progress that causes the marginal product of labor to increase relative to the marginal product of capital
None of the above
With firms having cost differences under perfect competition, a firm, which earns normal profit in the long-run is called:
An optimum firm
A representative firm
An oxford firm
A marginal firm
When price decreases and with it the total outlay on a commodity also decreases, it is a case of:
Perfect elasticity (infinitely elastic)
Relative elasticity (greater than one elasticity)
Perfect inelasticity (zero elasticity)
Relative inelasticity (less than one elasticity)
If the slope of the isoquant is equal to the slope of isocost, then isoquant is:
Concave to the origin
Convex to the origin
Tangent to the origin
None of the above
Any expansion in output by a firm in the short period will always reduce the:
Average variable cost
Average fixed cost
Both average fixed and variable cost
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
Microeconomics deals with the:
Allocation of resources of the economy as between production of different goods and services
Determination of prices of goods and services
Behavior of industrial decision makers
All of the above
Marginal Utility (MU) curve is always:
Rising
Falling
Parallel to X-axis
Parallel to Y-axis
We can obtain consumers demand curve from:
Income Consumption Curve (ICC)
Engels Curve
Price Consumption Curve (PCC)
Production Possibility Curve (PPC)
One way the government can induce a monopolist to expand his output is by imposing:
A specific tax on the monopolists output
A price ceiling that make the monopolist lower his price
A price floor that make the monopolist raise his price
A heavy tax on the monopolists profit
Which of the following pairs of commodities is an example of substitutes?
Tea and sugar
Tea and coffee
Pen and ink
Shirt and trousers
In non-collusive oligopoly firms enter into:
Secret agreements
No secret agreements
Bad habits
None of the above
In second degree price discrimination, monopolist takes away :
All of the consumer surplus
All of the producer surplus
Some part of the consumer surplus
None of them
Robbins definition of economics was criticised by:
Alfred Marshal
Adam Smith
J.B.Clark
Hicks, Longe and Durbin
In monopolistic competition, the firms follow:
Exotic behavior
Sympathetic behavior
Myopia behavior
Regular behavior