Economics - Study Mode
[#501] In which of the following commodities, when a consumer spends so much that negative income effect overwhelms the positive substitution effect so as the underlying demand curve is positively sloped?
Correct Answer
(C) Giffen goods
[#502] If the average cost is falling then:
Correct Answer
(D) It is impossible to say whether marginal cost is rising or falling
[#503] The concept of price elasticity of demand measures
Correct Answer
(D) the sensitivity of consumers to price change
[#504] Comparing the equilibrium position of a buyer with that of a producer in a pefectly competitive market, it is found that in perfect competition
Correct Answer
(D) The price of a buyer is higher than that of the producer and the output is also relatively less
[#505] Suppose that there are two goods, X and Y, facing a consumer. The prices are P x = Rs. 4 and P y = Rs. 5. He has Rs. 110 to spend on these goods. Suppose, he is currently buying 15 units of good X (with marginal utility equal to 40) and 10 units of good Y (with marginal utility equal to 45). In the above context, which one of the following statements is correct?
Correct Answer
(D) His total utility is being maximized subject to the budget constraint he is facing