Along an indifference curve, if the marginal rate of substitution is 3, then the consumer is willing to
A. Pay for one unit of the good measured along the Y-axis
B. Given up one unit of the good measured along the Y-axis for three units of the good measured along the X-axis
C. Given up three units of the good measured along the Y-axis for one unit of income, i.e., Rs. 1 of income
D. Given up three units of the good measured along the Y-axis for one unit of the good measured along the X-axis
Answer: Option D
The capital that is consumed by an economy or a firm in the production process is known as
A. Capital loss
B. Production cost
C. Dead-weight loss
D. Depreciation
Who propounded the opportunity cost theory of international trade?
A. Ricardo
B. Marshall
C. Heckscher & Ohlin
D. Haberler
Which among the following statement is INCORRECT?
A. On a linear demand curve, all the five forms of elasticity can be depicted
B. If two demand curves are linear and intersecting each other, then, coefficient of elasticity would be same on different demand curves at the point of intersection.
C. If two demand curves are linear and parallel to each other, then, at a particular price, the coefficient of elasticity would be different on different demand curves.
D. The price elasticity of demand is expressed in terms of relaive not absolute changes in Price and Quantity demanded.
A. Increase
B. Decrease
C. Remain the same
D. Become zero
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