McqMate
401. |
The demand curve for Giffen’s goods: |
A. | Vertical |
B. | Horizontal |
C. | Negative slope |
D. | Positive slope |
Answer» D. Positive slope |
402. |
When Q = f (P), the elasticity coefficient is measured by: |
A. | ∆Q/∆P / P/Q |
B. | ∆P/∆Q * Q/P |
C. | ∆Q/∆P * P/Q |
D. | P/∆Q / Q/P |
Answer» C. ∆Q/∆P * P/Q |
403. |
Income elasticity of demand for inferior goods is: |
A. | Negative |
B. | Positive |
C. | Zero |
D. | Unity |
Answer» A. Negative |
404. |
In the case of luxury goods, the income elasticity of demand will be: |
A. | Less than unity |
B. | Unity |
C. | More than unity |
D. | All the above |
Answer» C. More than unity |
405. |
Income elasticity is positive, but less than unity in the case of: |
A. | Necessity |
B. | Luxury |
C. | Inferior |
D. | Substitutes |
Answer» A. Necessity |
406. |
The change in demand is due to the change in : |
A. | Income |
B. | Own price |
C. | Prices of related products |
D. | Expectations |
Answer» B. Own price |
407. |
Supply curve represents -------- relationship between quantity and price |
A. | Direct |
B. | Inverse |
C. | Either direct or inverse |
D. | None of the above |
Answer» A. Direct |
408. |
A market: |
A. | Necessarily refers to a meeting place between buyer and sellers |
B. | Does not necessarily refers to a meeting place between buyer and sellers |
C. | Extends over the entire country |
D. | Extends over a city |
Answer» B. Does not necessarily refers to a meeting place between buyer and sellers |
409. |
The market equilibrium for a commodity is determined by: |
A. | Market demand |
B. | Market supply |
C. | Balancing of the forces of demand and supply |
D. | Any of the above |
Answer» C. Balancing of the forces of demand and supply |
410. |
In drawing an individual demand curve for a commodity, all but which of the following are kept constant: |
A. | Individual’s money income |
B. | The prices of the related commodity |
C. | Price of the commodity under consideration |
D. | Tastes of the consumer |
Answer» C. Price of the commodity under consideration |
411. |
A fall in the price of the commodity holding everything else constant results in: |
A. | Increase in demand |
B. | Decrease in demand |
C. | Increase in quantity demanded |
D. | Decrease in quantity demanded |
Answer» C. Increase in quantity demanded |
412. |
When an individual’s income rises, when everything else remains the same, his demand for normal goods: |
A. | Rises |
B. | Falls |
C. | Remains the same |
D. | Any of the above is possible |
Answer» A. Rises |
413. |
When an individual’s income falls, when everything else remains the same, his demand for inferior goods: |
A. | Increases |
B. | Decreases |
C. | Remains unchanged |
D. | Cannot say |
Answer» A. Increases |
414. |
When the price of the substitute commodity of X falls, the demand for X: |
A. | Rises |
B. | Falls |
C. | Remains unchanged |
D. | All of the above is possible |
Answer» B. Falls |
415. |
When both the price of a substitute and the price of complement of X rises, the demand for X: |
A. | Rises |
B. | Falls |
C. | Remains unchanged |
D. | All of the above is possible |
Answer» D. All of the above is possible |
416. |
If the supply curve of the commodity is having a positive slope, a rise in the price of the commodity, results in: |
A. | Increase in supply |
B. | Increase in quantity supplied |
C. | Decrease in supply |
D. | Decrease in quantity supplied |
Answer» B. Increase in quantity supplied |
417. |
From the position of stable equilibrium, the market supply of a commodity decreases, while the market demand remains unchanged, then: |
A. | Equilibrium price falls |
B. | Equilibrium quantity rises |
C. | Both equilibrium price and equilibrium quantity decreases |
D. | Equilibrium price rises, but equilibrium quantity falls |
Answer» D. Equilibrium price rises, but equilibrium quantity falls |
418. |
If the percentage increase in the quantity demanded of a commodity is smaller than the percentage fall in its price, the coefficient of price elasticity: |
A. | Greater than one |
B. | Equal to one |
C. | Smaller than one |
D. | Zero |
Answer» C. Smaller than one |
419. |
A fall in the price of the commodity whose demand curve is a rectangular hyperbola causes total expenditure on the commodity: |
A. | Increases |
B. | Decreases |
C. | Remains unchanged |
D. | None of the above |
Answer» C. Remains unchanged |
420. |
If the quantity demanded remains unchanged as the price of the commodity falls, the coefficient of price elasticity of demand is |
A. | Greater than One |
B. | Equal to one |
C. | Smaller than one |
D. | Zero |
Answer» D. Zero |
421. |
An increase in the price of the commodity when demand is inelastic causes the total expenditure of consumers of the commodity to: |
A. | Increase |
B. | Decrease |
C. | Remains unchanged |
D. | Any of the above |
Answer» C. Remains unchanged |
422. |
A negative income elasticity of demand for a commodity indicates that as income falls, the amount of the commodity purchased: |
A. | Rises |
B. | Falls |
C. | Remains unchanged |
D. | None of the above |
Answer» A. Rises |
423. |
If the income elasticity of demand is greater than one, then the commodity is: |
A. | Necessity |
B. | Luxury |
C. | Inferior |
D. | Non-related commodity |
Answer» A. Necessity |
424. |
If the amount of the commodity purchased remains unchanged when the price of another commodity changes, the cross elasticity of demand between them will be: |
A. | Positive |
B. | Negative |
C. | Zero |
D. | One |
Answer» C. Zero |
425. |
If the income elasticity of demand for a commodity is found to be 0.4, then the commodity concerned is |
A. | Luxury |
B. | Necessity |
C. | Giffen’s goods |
D. | Independent good |
Answer» B. Necessity |
426. |
Elasticity of supply for a positively sloped straight line supply curve that intersects the price axis is: |
A. | Equal to zero |
B. | Equal to one |
C. | Greater than one |
D. | Constant |
Answer» C. Greater than one |
427. |
If a positively sloped linear supply curve crosses the quantity axis, the elasticity of supply is: |
A. | Inelastic |
B. | Elastic |
C. | Unitary elastic |
D. | Perfectly elastic |
Answer» A. Inelastic |
428. |
If a positively sloped linear supply curve passes through the origin, the elasticity of supply is: |
A. | Inelastic |
B. | Elastic |
C. | Unitary elastic |
D. | Perfectly elastic |
Answer» C. Unitary elastic |
429. |
The horizontal supply curve parallel to quantity axis represents: |
A. | Elastic supply |
B. | Inelastic supply |
C. | Perfectly elastic supply |
D. | Perfectly inelastic supply |
Answer» C. Perfectly elastic supply |
430. |
A fall in income of the consumer, other things being equal, causes: |
A. | Increase in demand |
B. | Decrease in demand |
C. | Increase in quantity demanded |
D. | Decease in quantity demanded |
Answer» A. Increase in demand |
431. |
Which of the following causes an increase in supply: |
A. | Fall in price of inputs |
B. | Increase in number of producers |
C. | Decrease in the price of production substitutes |
D. | All of the above |
Answer» D. All of the above |
432. |
Which of the following Elasticities measure movement along a curve, rather than a shift in the curve: |
A. | Price elasticity of demand |
B. | Income elasticity of demand |
C. | Cross elasticity of demand |
D. | None of the above |
Answer» A. Price elasticity of demand |
433. |
Cross elasticity of demand in the case of substitutes: |
A. | Zero |
B. | Negative |
C. | Positive |
D. | Infinity |
Answer» C. Positive |
434. |
A movement down the given demand curve shows: |
A. | Increase in demand |
B. | Decrease in demand |
C. | Extension in demand |
D. | Contraction in demand |
Answer» C. Extension in demand |
435. |
Which of the following results in an increase in an increase in demand: |
A. | Fall in prices of substitutes |
B. | Increase in price of complementary goods |
C. | Fall in consumer’s income |
D. | None of the above |
Answer» D. None of the above |
436. |
Change in quantity supplied of a product can result from: |
A. | Changes in own price |
B. | Changes in cost of production |
C. | Change in technology |
D. | Change in price of related products |
Answer» A. Changes in own price |
437. |
An increase in supply means: |
A. | Movement down given supply curve |
B. | Movement upward given supply curve |
C. | Leftward shift in supply curve |
D. | Rightward shift in supply curve |
Answer» D. Rightward shift in supply curve |
438. |
At prices above the equilibrium price: |
A. | Quantity supplied exceeds quantity demanded |
B. | Quantity demanded exceeds quantity supplied |
C. | There is shortage |
D. | All of the above is possible |
Answer» A. Quantity supplied exceeds quantity demanded |
439. |
An increase in market supply, demand remaining the same causes: |
A. | Increase in equilibrium price |
B. | Decrease in equilibrium quantity |
C. | Decrease in equilibrium price and increase in equilibrium quantity |
D. | Both equilibrium price and quantity rises |
Answer» C. Decrease in equilibrium price and increase in equilibrium quantity |
440. |
An increase in market demand, supply remaining the same results in: |
A. | Decrease in equilibrium price |
B. | Decrease in equilibrium quantity |
C. | Decrease in equilibrium price and increase in equilibrium quantity |
D. | Both equilibrium price and quantity rises |
Answer» D. Both equilibrium price and quantity rises |
441. |
A fall in the market demand, supply remaining the same results in: |
A. | Increase in equilibrium price |
B. | Increase in equilibrium quantity |
C. | Increase in equilibrium price and decrease in equilibrium quantity |
D. | Both equilibrium price and quantity falls |
Answer» D. Both equilibrium price and quantity falls |
442. |
Which one of the following elasticities takes the average of prices and quantities: |
A. | Point elasticity of demand |
B. | Arc elasticity of demand |
C. | Income elasticity of demand |
D. | Cross elasticity of demand |
Answer» B. Arc elasticity of demand |
443. |
As a result of a fall in the price total expenditure on the commodity decreases, the coefficient of elasticity will be: |
A. | Equal to one |
B. | Greater than one |
C. | Less than one |
D. | Cannot say |
Answer» C. Less than one |
444. |
If a small change in price leads to infinitely large change in quantity demanded, then the demand is: |
A. | Perfectly elastic |
B. | Perfectly inelastic |
C. | Elastic |
D. | Inelastic |
Answer» B. Perfectly inelastic |
445. |
When demand curve is rectangular hyperbola, the value of price elasticity of demand will be: |
A. | Zero |
B. | One |
C. | Greater than one |
D. | Infinity |
Answer» B. One |
446. |
On a linear demand curve, the coefficient of price elasticity is unity, then the value of MR will be: |
A. | Positive |
B. | Zero |
C. | Negative |
D. | One |
Answer» B. Zero |
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