Inelastic demand means that if the price changes, the quantity demanded will not change much. The more necessary a good is, the lower the elasticity, as people will attempt to buy it no matter the price. Necessities such as water are likely to have perfectly inelastic demand.

Correct Option: B

Inelastic demand means that if the price changes, the quantity demanded will not change much. The more necessary a good is, the lower the elasticity, as people will attempt to buy it no matter the price. Necessities such as water are likely to have perfectly inelastic demand.

The Production function expresses a functional relationship amidst quantities of raw materials and goods. It is the name given to the relationship between rates of input of productive services and the rate of output of product.

Correct Option: C

The Production function expresses a functional relationship amidst quantities of raw materials and goods. It is the name given to the relationship between rates of input of productive services and the rate of output of product.

In a bilateral monopoly there is both a monopoly (a single seller) and monopsony (a single buyer) in the same market. The one supplier tends to act as a monopoly power, and looks to charge high prices to the one buyer. The lone buyer looks towards paying a price that is as low as possible. Since both parties have conflicting goals, the two sides negotiate based on the relative bargaining power of each, with a final price settling in between the two sides’ points of maximum profit.

Correct Option: D

In a bilateral monopoly there is both a monopoly (a single seller) and monopsony (a single buyer) in the same market. The one supplier tends to act as a monopoly power, and looks to charge high prices to the one buyer. The lone buyer looks towards paying a price that is as low as possible. Since both parties have conflicting goals, the two sides negotiate based on the relative bargaining power of each, with a final price settling in between the two sides’ points of maximum profit.

The water diamond paradox or puzzle was a mystery of Adam Smith who observed that the price of diamonds was much higher than that of water even though water seemed to offer for more utility than diamonds. The resolution of this puzzle or paradox is based on the distinction between marginal utility and total utility. The marginal utility of diamonds is very high and so consumers are willing to pay higher prices for diamond, than for water.

Correct Option: A

The water diamond paradox or puzzle was a mystery of Adam Smith who observed that the price of diamonds was much higher than that of water even though water seemed to offer for more utility than diamonds. The resolution of this puzzle or paradox is based on the distinction between marginal utility and total utility. The marginal utility of diamonds is very high and so consumers are willing to pay higher prices for diamond, than for water.

The ‘Principle of Maximum Social Advantage’, introduced by British economist Hugh Dalton, is the fundamental principle of Public Finance which implies that all the financial operations of the state should aim at maximization of net social benefit. It takes into consideration both the aspects of public finance that is the government revenue or taxation as well as government expenditure. Since it studies problems related to government taxation and spending, it comes under the domain of fiscal economics.

Correct Option: C

The ‘Principle of Maximum Social Advantage’, introduced by British economist Hugh Dalton, is the fundamental principle of Public Finance which implies that all the financial operations of the state should aim at maximization of net social benefit. It takes into consideration both the aspects of public finance that is the government revenue or taxation as well as government expenditure. Since it studies problems related to government taxation and spending, it comes under the domain of fiscal economics.