Managerial Economics - Study Mode
[#206] From the following determinants of the price elasticity of demand, indicate the correct option for the determinants having a positive relationship with the degree of the price elasticity of demand. 1. Range of substitutes of the commodity 2. Extent of the different uses of the commodity 3. Portion of the income of the buyer spent on the commodity 4. Income group of buyers purchasing the commodity
Correct Answer
(C) 1, 2 and 3
[#207] The degree of price elasticity of demand used for goods is influenced by whether 1. It has close substitutes 2. Its output is easily altered 3. It accounts for a small input 4. It is a durable use or single use goods
Correct Answer
(A) 1, 3 and 4 only
[#208] On an indifference map, if the income consumption curve slopes downwards to the right it shows that
Correct Answer
(B) Y is an inferior good
[#209] A consumer will be maximising his utility if he allocated his money income so that
Correct Answer
(B) The marginal utility from the last rupee spent on each purchased product is the same
[#210] The substitution effect works to encourage a consumer to purchase more of a product when the price of that goods is falling because
Correct Answer
(C) The product is now relatively less expensive than before