Microeconomics Flashcards
Who gave the Cardinal Utility Theory?
Alfred marshall
Who gave Ordinal utility theory?
Hicks and Alien
What is the Shape of indifference curve of complimentary products?
L shaped
Which year baumal’s theory of sales maximisation?
1959
Year Paul Sweezy’s kinked demand curve?
1939
Which theory was developed by Neumann and Morbenstern?
Game’s theory and prisoner’s Dillemma in 1944
Revealed Preference Theory has been given by and in which book?
Paul A. Samuelson
In ‘Foundations of Economic Analysis’
Shape of indifference curve?
Convex to the origin
What is the other name of Isocost line?
Budget line
Monopolist can either decide price or quantity. True?
True!
What is the other name for veblen goods?
Status goods.
When its price increases, its demand also increases.
What is the shape of demand curve of giffen goods. (hint: it’s like veblen goods)
Upward sloping!
Which market form indulges in dumping?
Monopilstic competition
What is the other name of law of diminishing MU and who found it?
Gossen’s first law.
Walras stated that this law is applicable to all fields of production.
Who coined the term ‘MU’?
The term “marginal utility”, credited to the Austrian economist Friedrich von Wieser by Alfred Marshall was a translation of Wieser’s term “Grenznutzen”
What is the other name of opportunity cost?
Alternative cost
What is bilateral monopoly?
Single buyer, Single seller
The concept of imperfect competition was developed by whom?
Mrs. Joan Robbinson who introduced this in her book the ‘The economics of imperfect competition’
What does the HERFINDAHL INDEX measure?
It measures the size of the organisation in relation to the industry and thereby the competition it has to face.
Tell whether the price effect is positive or negative for normal, inferior and giffen goods.
- Normal- Positive as quantity demanded increases. Positive income effect also.
- Inferior- POSITIVE
Income effect weakly negative
Positive Substitution effect offsets it. - Giffen- NEGATIVE for seller
Income effect strongly negative for seller. Quantity demanded decreases.
Substitution effect not enough.
Substitution effect is always negative for the seller.
Paasche index/ Laspeyres Model
Price indices.
Price trend through time.
However, Laspeyres’ uses base year’s quantities as weights.
Bertrand duopoly model
The Cournot and Stackelberg duopoly theories in managerial economics focus on firms competing through the quantity of output they produce. The Bertrand duopoly model examines price competition among firms that produce differentiated but highly substitutable products.
Marginal firm
Ac=ar
Profit maximisation
What is the fundamental premise of economics?
People choose those goods that they value highly.
What are the common tools in statistics to measure dispersion?
Dispersion refers to how scattered a set of data is.
Common tools involve, standard deviation, variance and inter quartile range.
Who developed the theory if interest that talks about natural rate of interest?
KNUT WICKSELL
In his book interest and prices i.e. Money interest and commodity prices.
What is the other name of substitution effect?
Slutsky Substitution Effect
What is the slope of PPF called?
Marginal rate if substitution. It keeps increasing. It gives PPF its concave shape.
Attainable combination- on/inside PPF.
What is the point of
Pareto efficiency?
Equilibrium point at which it is not possible to make someone better off without making someone worse off.
An economic state in which resources are allocated in the most efficient manner.
Who discovered the bell shape curve?
Carl F. Gauss
Fisher is associated with what?
Index Numbers
What is the formula for harmonic mean?
N/( 1/a + 1/b + 1/c…)
