Consider the following statements about a joint-stock company: 1. It has a legal existence. 2. There is limited liability of shareholders. 3. It has a democratic management. 4. It has a collective ownership. Which of the statements given above are correct?

Correct Answer: 1 and 2

Explanation:

The indifference curves cannot intersect each other.

Higher indifference curve represents a higher level of satisfaction because higher IC means a bundle consisting more of both the goods or same quantity of one good n more quantity of the other good .Hence statement 2 is correct and 3 is incorrect.

Indifference curves is convex to the point of origin because of diminishing Marginal Rate of Substitution.

Correct Answer: When total utility is maximum,marginal and average utility are equal to each other.

Explanation:

Total utility -It is total psychological satisfaction which a consumer derives from the consumption of a commodity is known as total utility

Marginal utility -It is anaddition made in total utility by consuming and additional unit of a commodity is known as marginal utility.

?When marginal utility is positive,total utility increases

?When marginal utility is zero,total utility is at maximum

?When marginal utility is negative,total utility decreases

Correct Answer: Consumers are affected by demonstration effect

Explanation:

There are certain assumptions underlying the law of demand, which are as follows:

i. Assumes that the consumer?s income remains same

ii. Assumes that the preferences of consumer remain same.

iii. Considers that the fashion does not show any changes, because if fashion changes, then people would not purchase the products that are out of fashion.

iv. Assumes that there would be no change in the age structure, size, and sex ratio of population. This is because if population size increases, then the number of buyers increases, which, in turn, affect the demand for a product directly.

v. Restricts the innovation and new varieties of products in the market, which can affect the demand for the existing product.

vi. Restricts changes in the distribution of income.

vii. Avoids any type of change fiscal policies of the government of a nation, which reduces the effect of taxation on the demand of product.

Correct Answer: going for more fixed capital per worker

Explanation:

Capital deepening is a situation where the capital per worker is increasing in the economy. This is also referred to as increase in the capital intensity. Capital deepening is often measured by the rate of change in capital stock per labour hour.

 

Correct Answer: 1 and 3 only

Explanation:

Creditors and debtors:

During inflation creditors lose because they receive in effect less in goods and services than if they had received the repayments during a period of low prices. Debtors, on other hand, as a group gain during inflation, since they repay their debts in currency that has lost its value.The aggregate volume of internal trade tends to increase during inflation due to higher incomes, greater production and larger spending. But the export trade is likely to suffer on account of arise in the prices of domestic goods.

The same currency unit will now buy less goods and services.But the bondholders lose as they get a fixed interest the real value of which has already fallen.

Correct Answer: upward sloping to the right

Explanation:

Although demand curves are typically downward sloping to reflect that consumers? utility for a good diminishes with increased consumption, firm supply curves are generally upward sloping.The upward sloping character reflects that firms will be willing to increase production in response to a higher market price because the higher price may make additional production profitable.

 

Correct Answer: upward sloping to the right

Explanation:

Although demand curves are typically downward sloping to reflect that consumers? utility for a good diminishes with increased consumption, firm supply curves are generally upward sloping.The upward sloping character reflects that firms will be willing to increase production in response to a higher market price because the higher price may make additional production profitable.

 

Correct Answer: monopolistic competition

Explanation:

Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another (e.g. by branding or quality) and hence are not perfect substitutes.

In other words, large sellers selling the products that are similar, but not identical and compete with each other on other factors besides price.

Correct Answer: Life Cycle Hypothesis

Explanation:

The life-cycle theory of consumption, popularly known as life-cycle hypothesis,' was developed by Ando and Modigliani" in the early 1960s.

The life-cycle hypothesis postulates that individual consumption in any time period depends on

(i) resources available to the individual,

(ii) the rate of return on his capital, and

(iii) the age of the individual.

The resources available to an individual consist of his existing net wealth and the present value of all his current and future labour incomes. According to the life-cycle hypothesis, a rational consumer plans consumption on the basis of all his resources and allocates his income to consumption over time so that he maximizes his total utility over his life time.

Correct Answer: Central Statistical Organization