McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: General Knowledge (GK) , Union Public Service Commission (UPSC) .
| 351. |
In the balance of payments account, unrequited receipts and payments are also regarded as - |
| A. | bilateral transfers |
| B. | unilateral transfers |
| C. | capital account transfers |
| D. | invisible transfers |
| Answer» B. unilateral transfers | |
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Explanation: Unrequited receipts and payments are also regarded as unilateral transfers as the flow is only in one direction with no automatic reverse flow in the other direction. There is no repayment obligation attached to these transfers because they are neither borrowings nor lending, but gifts and grants exchanged between governments and people in the world. |
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| 352. |
"Wall Street" is the name of the : |
| A. | Stock Exchange of New York |
| B. | Indian Township in Washington |
| C. | Super market in Munthai |
| D. | Stock Exchange of kolkata |
| Answer» A. Stock Exchange of New York | |
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Explanation: Wall Street, a 1.1 km street in the Financial District of lower Manhattan, New York City, is home to the world's two largest stock exchanges by total market capitalization,the New York Stock Exchange and NASDAQ. Over time, the term has become a metonym for the financial markets of the United States as a whole, the American financial sector. |
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| 353. |
Which one of the following is a developmental expenditure? |
| A. | Irrigation expenditure |
| B. | Civil administration |
| C. | Debt services |
| D. | Grant-in-aid |
| Answer» A. Irrigation expenditure | |
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Explanation: Public expenditure whether plans or non-plan or capital or revenue is classified into developmental and non-developmental expenditure. The expenditure which is incurred on activities directly related to economic development is called developmental expenditure. Hence, expenditure incurred on education, health care, scientific research: infrastructure and so on is developmental expenditure. Expenditure incurred on general essential services required for normal running of the government is termed as non-developmental expenditure. Therefore, expenditure incurred on services relating to general administration, police, defense, judiciary etc. is non- developmental expenditure. |
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| 354. |
Green banking means - |
| A. | development of forestry by banks |
| B. | financing of environmental friendly projects by banks |
| C. | financing of irrigation projects by banks |
| D. | None of the above |
| Answer» B. financing of environmental friendly projects by banks | |
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Explanation: Green banking is like a normal bank, which considers all the social and environmental/ecological factors with an aim to protect the environment and conserve natural resources. It is also called as an ethical bank or a sustainable bank. They are controlled by the same authorities but with an additional agenda toward taking care of the Earth's environment/ habitats/resources. |
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| 355. |
The best Index of Economic Development is provided by: |
| A. | Growth in Percapita Real Income from year to year. |
| B. | Growth in National Income at Current Prices. |
| C. | Growth in savings ratio. |
| D. | Improvement in the Balance of Payments Position. |
| Answer» A. Growth in Percapita Real Income from year to year. | |
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Explanation: Per capita Gross National Product (GNP) is the best index of development. It can be derived by dividing the GNP of a country with its population. Higher the level of per capita income, higher is the economic development. The World Bank, in its world development report 1998, classified the countries in the world on the bases of per capita GNP. |
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| 356. |
Which one of the following is not a 'canon of taxation' according to Adam Smith? |
| A. | Canon of certainty |
| B. | Canon of simplicity |
| C. | Canon of convenience |
| D. | Canon of economy |
| Answer» B. Canon of simplicity | |
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Explanation: In this book, titled The Wealth of Nations, 'Adam smith only gave four canons of taxation: (i) canon of equity; (ii) canon of certainty; (iii) canon of convenience; and (iv) canon of economy. |
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| 357. |
The business in Stock Markets and other securities markets is regulated - |
| A. | Securities and Exchange Board of India |
| B. | Sole Trade and Exchange Bank of India |
| C. | State and Exchange Bank of India |
| D. | Stock and Exchange Bank of India |
| Answer» A. Securities and Exchange Board of India | |
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Explanation: As per the Securities and Exchange Board Of India (SEBI) Act, 1992, SEBI is responsible for protecting the interests of investors in securities and to promote the development of, and to regulate the securities market. It is the duty of SEBI to regulate the business in stock exchanges and any other securities markets. |
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| 358. |
Liberalism stands for - |
| A. | religious orthodoxy |
| B. | a (movement and an attitude |
| C. | self-emancipation |
| D. | freedom in social, political and economic aspects |
| Answer» D. freedom in social, political and economic aspects | |
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Explanation: Liberalism includes a broad spectrum of political philosophies that consider individual liberty to be the most important political goal, and emphasize individual rights and equality of opportunity. It supports market economy and a transparent and democratic system of government. The same applies to social and religious aspects as well. |
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| 359. |
Which of the following is a better measurement of Economic Development? |
| A. | GDP |
| B. | Disposable income |
| C. | NNP |
| D. | Per capita income |
| Answer» D. Per capita income | |
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Explanation: Per capita income or average income or income per person is the mean income within an economic aggregate, such as a country or city. It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross National Income) and dividing it by the total population, Measurement of personal income is the best measure of economic well- being of individuals and nation. Besides, it helps to show the level of inequality in a society or country. |
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| 360. |
Imputed gross rent of owner-occupied buildings is a part of - |
| A. | capital formation |
| B. | final consumption |
| C. | intermediate consumption |
| D. | consumer durable |
| Answer» B. final consumption | |
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Explanation: The figure of final private consumption expenditure includes the imputed gross rent of owner-occupied dwellings, consumption of own-account production and payment by households of wages and salaries in kind valued at cost, e.g., provision for food, shelter and clothing to the employees, wherever they exist. Production for self consumption is apart of production and hence an income and is also a part of final consumption expenditure. |
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| 361. |
An increase in per capital income is not an indication of an increase in the economic welfare of the people - |
| A. | When such increase is the result of an increased production action of comforts |
| B. | When such increase is the result of an increase in agricultural production |
| C. | When it is the result of an increase in the production of industrial goods |
| D. | When such increase is the result of increased production of intoxicants |
| Answer» D. When such increase is the result of increased production of intoxicants | |
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Explanation: An increase in per capita income due to increased production of intoxicants cannot be taken as economic welfare as it defeats the very notion of welfare. Economic welfare refers to the level of prosperity and living standards of either an individual or a group of persons. Factors used to measure the economic welfare of a population, include: GDP, literacy, access to health care, and assessments of environmental quality. |
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| 362. |
The functional relationship between income and consumption expenditure is explained by - |
| A. | Consumer' Surplus |
| B. | Law of Demand |
| C. | Law of Supply |
| D. | Keynes's psychological law of consumption |
| Answer» D. Keynes's psychological law of consumption | |
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Explanation: Keynes defined Psychological Law of Consumption in terms of, "The fundamental psychological law, upon which we are entitled to depend with great confidence both a priori from our knowledge of human nature and from the detailed facts of experience, is that men are disposed, as a rule and on the average, to increase their consumption as their income in- creases but not by as much as the increase in the income." |
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| 363. |
Preparation of butter, ghee by a household for their own use is a part of : |
| A. | own-account production |
| B. | household capital formation |
| C. | industrial production |
| D. | consumption |
| Answer» D. consumption | |
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Explanation: The processing of agricultural products; the production of grain by threshing: the production of flour by milling; the curing of skins and the production of leather; the production and preservation of meat and fish products; the preservation of fruit by drying, bottling, etc.; the production of daily products such as butter or cheese; the production of beer, wine or spirits; the production of baskets and mats; etc, come under processing of primary commodities for own consumption. |
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| 364. |
Average propensity to consume is defined as - |
| A. | Aggregate consumption +Total population |
| B. | Aggregate income ÷ Aggregate consumption |
| C. | Change in consumption ÷ Change in income |
| D. | Aggregate consumption +Aggregate income |
| Answer» D. Aggregate consumption +Aggregate income | |
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Explanation: In economics, the average propensity to consume (APC) is defined as the ratio of aggregate or total consumption to aggregate income in a given period of time. Thus, the value of average propensity to consume, for any income level, may be found by dividing consumption by income. |
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| 365. |
Market segmentation is: |
| A. | Group of Sales Persons |
| B. | Dividing target groups as per their needs |
| C. | Market Division |
| D. | Market Space |
| Answer» B. Dividing target groups as per their needs | |
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Explanation: Market segmentation is a marketing strategy which refers to the aggregating of prospective buyers into groups, or segments, having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment. |
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| 366. |
What will be the effect on inferior commodities when income of the consumer rises? |
| A. | Negative effect |
| B. | Positive effect |
| C. | No effect |
| D. | First increase then decrease |
| Answer» A. Negative effect | |
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Explanation: In economics, an inferior good is a good that decreases in demand when consumer income rises (or rises in demand when consumer income decreases), unlike normal goods, for which the opposite is observed. Normal goods are those for which consumers' demand increases when their income increases. Cheaper cars are examples of the inferior goods. |
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| 367. |
An indiference curve measures level of satisfaction derived from different combinations of commodity X and Y. |
| A. | same |
| B. | higher |
| C. | lower |
| D. | minimum |
| Answer» A. same | |
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Explanation: An indifference curve may be defined as the locus of points, each representing a different combination of two substitute goods, which yield the same utility or level of satisfaction to the consumer. Therefore, he is indifferent between any two combinations of goods when it comes to making a choice between them. |
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| 368. |
motion that seeks to reduce the amount of demand presented by government to Re. 1/is known as - |
| A. | Disapproval of policy Cut |
| B. | Token cut |
| C. | Economy cut |
| D. | Vote on account |
| Answer» A. Disapproval of policy Cut | |
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Explanation: Disapproval of Policy Cut seeks to reduce the amount of the demand be reduced to Re.1/-' representing disapproval of the policy underlying the demand. A member giving notice of such a motion shall indicate in precise terms the particulars of the policy which he proposesto discuss. The discussion shall be confined to the specific point or points mentioned in the notice and it shall be open to members to advocate an alternative policy. |
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| 369. |
In the law of demand, the statement "Other things remain constant" means - |
| A. | income of consumer should not change |
| B. | price of other goods should not change |
| C. | taste of consumer should not change |
| D. | All of the above |
| Answer» D. All of the above | |
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Explanation: In economics, the law of demand is an economic law, which states that consumers buy more of a good when its price is lower and less when its price is higher (ceteris paribus). The Law of demand states that the quantity demanded and the price of a commodity are inversely related, other things remaining constant. That is, if the income of the consumer, prices of the related goods, and preferences of the consumer remain unchanged, then the change in quantity of good demanded by the consumer will be negatively correlated to the change in the price of the good. |
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| 370. |
A firm is in equilibrium when its |
| A. | marginal cost equals the marginal revenue |
| B. | total cost is minimum |
| C. | total revenue is maximum |
| D. | average revenue and marginal revenue are equal |
| Answer» A. marginal cost equals the marginal revenue | |
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Explanation: A consumer is in a state of equilibrium when he achieves maximum aggregate satisfaction on the expenditure that he makes depending on the set of conditions relating to his tastes and preferences, income, price and supply of the commodity etc. Producers' equilibrium occurs when he maximizes his net profit subject to a given set of economic situations. A firm's equilibrium point is when it has no inclination in changing its production. In short run Marginal revenue = Marginal Cost is the condition of equilibrium. |
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| 371. |
The excess of price a person is to pay rather than forego the consumption of the commodity is called - |
| A. | Price |
| B. | Profit |
| C. | Producers' surplus |
| D. | Consumer's surplus |
| Answer» C. Producers' surplus | |
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Explanation: Producer Surplus' is an economic measure of the difference between the amount that a producer of a good receives and the minimum amount that he or she would be willing to accept for the good. The difference, or surplus amount, is the benefit that the producer receives for selling the good in the market. |
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| 372. |
When the price of a commodity falls, we can expect - |
| A. | the supply of it to increase |
| B. | the demand for it to fall |
| C. | the demand for it to stay constant |
| D. | the demand for it to increase |
| Answer» D. the demand for it to increase | |
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Explanation: In economics, the law of demand is an economic law, which states that consumers buy more of a good when its price is lower and less when its price is higher. The Law of demand states that the quantity demanded and the price of a commodity are inversely related, other things remaining constant. That is, if the income of the consumer, prices of the related goods, and preferences of the consumer remain unchanged, then the change in quantity of good demanded by the consumer will be negatively correlated to the change in the price of the good |
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| 373. |
A situation of large number of firms producing similar goods is termed as : |
| A. | Perfect competition |
| B. | Monopolistic competition |
| C. | Pure competition |
| D. | Oligopoly |
| Answer» A. Perfect competition | |
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Explanation: The fundamental condition of perfect competition • is that there must be a large number of sellers or firms. Homogeneous Commodity is the second fundamental condition of a perfect market. The products of all firms in the industry are homogeneous and identical. |
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| 374. |
The difference between the price the consumer is prepared to pay for a commodity and the price which he actually pays is called |
| A. | Consumer's Surplus |
| B. | Producer's Surplus |
| C. | Landlord's Surplus |
| D. | Worker's Surplus |
| Answer» A. Consumer's Surplus | |
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Explanation: Consumer surplus is the difference between the maximum price a consumer is willing to pay and the actual price they do pay. If a consumer would be willing to pay more than the current asking price, then they are getting more benefit from the purchased product than they spent to buy it. |
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| 375. |
For an inferior good, demand falls when - |
| A. | price rises |
| B. | income rise |
| C. | price falls |
| D. | income falls |
| Answer» B. income rise | |
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Explanation: In economics, income elasticity of demand measures the responsiveness of the demand for a good to a change in the income of the people demanding the good. An Inferior good is a good that decreases in demand when consumer income rises, unlike normal goods, for which the opposite is observed. Normal goods are those for which consumers' demand increases when their income increases. |
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| 376. |
Wage fund theory was propounded by |
| A. | J.B. Say |
| B. | J.S. Mill |
| C. | J.R. Hicks |
| D. | J.M. Keynes |
| Answer» B. J.S. Mill | |
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Explanation: J.S. Mill developed the wages- fund theory. This theory of wage was an attempt to show that in certain circumstances wages could rise above subsistence level. According to this theory a fund of capital has to he accumulated in advance before wage could be paid. This fund of capital is called wages-fund out of which wages are paid to labourers. |
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| 377. |
Cross demand expresses the functional relationship between - |
| A. | demand and prices of related commodities |
| B. | demand and income |
| C. | demand and prices |
| D. | demand and supply |
| Answer» A. demand and prices of related commodities | |
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Explanation: Other things being constant, cross demand expresses the relation between demand for good ‘A’ due to change in the price of its related good 'B’. It shows that at different prices of good ‘B’ what different quantities of good A’ will be demanded. |
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| 378. |
Third stage of Law of Variable Proportion is called - |
| A. | negative returns |
| B. | positive returns |
| C. | constant returns |
| D. | increasing returns |
| Answer» A. negative returns | |
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Explanation: The stages of Law of Variable Proportion are: Stage 1: Increasing return: Stage 2: Diminishing return; and Stage 3: Negative Return. In the third stage Marginal Product of variable factor is zero. In this stage the Total Product starts diminishing. |
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| 379. |
Other things being equal, a decrease in quantity demanded of a commodity can be caused by – |
| A. | a rise in the price of the commodity |
| B. | a rise in the income of the consumer |
| C. | a fall in the price of a commodity |
| D. | a fall in the income of the consumer |
| Answer» A. a rise in the price of the commodity | |
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Explanation: In economics, the law states that, all else being equal, as the price of a product increases, quantity demanded falls; likewise, as the price of a product decreases, quantity demanded increases. |
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| 380. |
Which of the following is not an economic problem? |
| A. | Deciding between paid work leisure |
| B. | Deciding between expenditure on one good and the other |
| C. | Deciding between alternative methods of personal savings |
| D. | Deciding between different ways of spending leisure time |
| Answer» C. Deciding between alternative methods of personal savings | |
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Explanation: The Theory of Economic Problem states that scarcity exists in the sense that only finite and insufficient resources are available to satisfy the needs and desire of all human beings. The fundamental economic problem is how to allocate scarce resources to the provision of various goods and services within the economy. |
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| 381. |
The Psychological law of consumption states that – |
| A. | proportionate increase in consumption is less than proportionate increase in income |
| B. | increase in income is equal to increase in consumption |
| C. | increase in consumption is greater than increase in income |
| D. | consumption does not change with a change in income |
| Answer» A. proportionate increase in consumption is less than proportionate increase in income | |
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Explanation: According to Keynes’ psychological law of consumption, increased aggregate consumption due to increased aggregate income — aggregate consumption increases with increase in aggregate income but the increase in consumption is less than the increase in the income. This is because when the basic necessities or demand of the people are already fulfilled, they start saving the extra additional income. |
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| 382. |
Subsidies are payment by government to – |
| A. | Consuming units |
| B. | Producing units |
| C. | Banking units |
| D. | Retired persons |
| Answer» B. Producing units | |
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Explanation: A subsidy is essentially a payment by the government to suppliers/producers that reduce their costs of production and encourages them to increase output. |
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| 383. |
Tha Law of Demand is based on - |
| A. | Manufacturer's preference |
| B. | Seller's preference |
| C. | Supplier's preference |
| D. | Consumer's preference |
| Answer» D. Consumer's preference | |
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Explanation: The Law of Demand states that, all else being equal, as the price of a product increases, quantily demanded lowers; likewise, as the price of a product decreases, quantity demanded increases. Demand is derived from consumers’ tastes and preferences, and it is bound by income. In other words, given a limited income, the consumer must decide what goods and services to purchase. Each consumer will purchase different things because individual preferences and incomes differ. |
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| 384. |
The expenses on advertising is called - |
| A. | Implicit cost |
| B. | Surplus cost |
| C. | Fixed cost |
| D. | Selling cost |
| Answer» D. Selling cost | |
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Explanation: Selling cost is total cost of marketing, advertising, and selling a product. It differs from the production cost which is incurred to produce goods. Selling cost |
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| 385. |
The most distinguishing feature of oligopaly is - |
| A. | number of firms |
| B. | interdependence |
| C. | negligible influence on price |
| D. | price leadership |
| Answer» B. interdependence | |
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Explanation: An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists). Because there are few sellers, each oilgopolist is likely to be aware of the actions of the others. The decisions of one firm influence, and are influenced by, the decisions of other firms. Some of its characteristics are: Profit maximization conditions; Number of firms; Product differentiation; Interdependence; Non-Price Competition, etc. The distinctive feature of an oligopoly is interdependence. Oligopolies are typically composed of a few large firms. |
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| 386. |
'Law of demand' implies that when there is excess demand for a commodity, then |
| A. | price of the commodity falls |
| B. | price of the commodity remains same |
| C. | price of the commodity rises |
| D. | quantity demanded of the commodity falls |
| Answer» C. price of the commodity rises | |
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Explanation: The Law of demand states that the quantity demanded and the price of a commodity are inversely related, other things remaining constant. That is, if the income of the consumer, prices of the related goods, and preferences of the consumer remain unchanged, then the change in quantity of good demanded by the consumer will be negatively correlated to the change in the price of the good. When there is excess demand of the commodity the price starts rising and it continues to rise till equilibrium price is reached. |
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| 387. |
Given the money wages, if the price level in an economy increases, then the real wages will - |
| A. | increase |
| B. | decrease |
| C. | remain constant |
| D. | become flexible |
| Answer» B. decrease | |
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Explanation: If workers receive a higher nominal wage and the price level does not change, then the real purchasing power of their wages is higher and they are inclined to increase the quantity of labor supplied. |
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| 388. |
In Economics, production means - |
| A. | manufacturing |
| B. | making |
| C. | creating utility |
| D. | farming |
| Answer» C. creating utility | |
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Explanation: All factors of production like land, labour, capital and entrepreneur are required in combination at a time to produce a commodity. Production means creation or an addition of utility. Factors of production (or productive 'inputs' or 'resources') are any commodities or services used to produce goods and services. |
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| 389. |
What is included in the Tetiary sector? |
| A. | Banking |
| B. | Manufacturing |
| C. | Forestry |
| D. | Mining |
| Answer» A. Banking | |
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Explanation: The led 'my industry is the segment of the economy that provides services to its consumers. It includes a wide range or activities that service based and give non- tangible value to customers such as provision of trading, insurance, banking, etc. The other sectors are the secondary sector (manufacturing), and the primary sector (agriculture and allied activities). |
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| 390. |
Minimum payment to factor of production is called - |
| A. | Quasi Rent |
| B. | Rent |
| C. | Wages |
| D. | Transfer Payment |
| Answer» D. Transfer Payment | |
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Explanation: In economics, factors of production are the inputs to the production process. There are three basic factors of production: land, labour, capital. The payment for use and the received income of a land owner is rent. The payment for someone else's laborand all income received from one's own labor is wages. The modern theory of rent is that it is the difference between the actual earning of a factor unit over its transfer earnings. So the Transfer earnings are the mini-mum payment required to keep a factor of production in its present use. It is also known as opportunity cost. |
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| 391. |
Consumer's surplus is the highest in the case of: |
| A. | durable goods |
| B. | luxuries |
| C. | comforts |
| D. | necessities |
| Answer» D. necessities | |
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Explanation: Consumer surplus is the difference between the price consumers would be prepared to pay and the actual market price. |
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| 392. |
Which of the following cost curve is never `U' shaped ? |
| A. | Marginal cost curve |
| B. | Average variable cost curve |
| C. | Average fixed cost curve |
| D. | Average cost curve |
| Answer» C. Average fixed cost curve | |
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Explanation: Average fixed cost curve is never 'U' shaped. Since total fixed costs are unchanged as output rises, the average fixed cost curve falls continuously as output is increased. |
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| 393. |
Perfect competition means - |
| A. | large number of buyers and less sellers |
| B. | large number of buyers and sellers |
| C. | large number of sellers and less buyers |
| D. | None of these |
| Answer» B. large number of buyers and sellers | |
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Explanation: The fundamental condition of perfect competition is that there must be a large number of sellers or firms. Homogeneous Commodity is the second fundamental condition of a perfect market. |
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| 394. |
Bread and butter, car and petrol are examples of goods which have - |
| A. | composite demand |
| B. | joint demand |
| C. | derived demand |
| D. | autonomous demand |
| Answer» C. derived demand | |
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Explanation: Derived demand is a term in economics, where demand for one good or service occurs as a result of the demand for another intermediate/final good or service. This may occur as the former-is a good of production of the second. For example, demand for coal leads to derived demand for mining, as coal must be mined for coal to be consumed. As the demand for coal increases, so does its price. |
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| 395. |
In a Capitalistic Economy, the prices are determined by : |
| A. | Demand and Supply |
| B. | Government Authorities |
| C. | Buyers in the Market |
| D. | Sellers in the Market |
| Answer» A. Demand and Supply | |
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Explanation: Capitalism generally refers to economic system in which the means of production are largely or entirely privately owned and operated for a profit, structured on the process of capital accumulation. In general, investments, distribution, income, and pricing is determined by markets. In capitalism, prices are decided by the demand-supply scale. For example, higher demand for certain goods and services lead to higher prices and lower demand for certain goods lead to lower prices. |
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| 396. |
Tooth paste is a product sold under : |
| A. | Monopolistic Competition |
| B. | Perfect Competition |
| C. | Monopoly |
| D. | Duopoly |
| Answer» A. Monopolistic Competition | |
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Explanation: Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another as goods but not perfect substitutes (such as from branding, quality, or location). In monopolistic competition, a firm takes the prices charged by its rivals as given and ignores the impact of its own prices on the prices of other firms. There are six characteristics of monopolistic competition (MC): (1) Product differentiation; (2) many firms; (3) Free entryand exit in the long run: (4) Independent decision making; (e) market power; and (f) Buyers and Sellers do not have perfect information. |
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| 397. |
Prime cost is equal to - |
| A. | Variable cost plus administrative cost |
| B. | Variable cost plus fixed costs |
| C. | Variable cost only |
| D. | Fixed cost only |
| Answer» A. Variable cost plus administrative cost | |
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Explanation: Prime Cost refers to a business's expenses for the materials and labor it uses in production. Prime cost is a way of measuring the total cost of the production inputs needed to create a given output. By analyzing its prime costs, a company can determine how much it must charge for its finished product in order to make a profit. Variable costs are expenses that change in proportion to the activity of a business. Variable cost is the sum of marginal costs over all units produced. |
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| 398. |
An expenditure that has been made and cannot be recovered is called - |
| A. | Variable cost |
| B. | Opportunity cost |
| C. | Sunk cost |
| D. | Operational cost |
| Answer» C. Sunk cost | |
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Explanation: In economics and business decision-making, sunk costs are retrospective (past) costs that have already been incurred and cannot be recovered. Sunk costs are sometimes contrasted with prospective costs, which are future costs that may be incurred or changed if an action is taken. The sunk cost is distinct from economic loss. Sunk costs may cause cost overrun. |
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| 399. |
Elasticity of demand is the degree of responsiveness of demand of a commodity to a - |
| A. | change in consumers' wealth |
| B. | change in the price of substitutes |
| C. | change in consumers' tastes |
| D. | change in its price |
| Answer» D. change in its price | |
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Explanation: The elasticity of demand, also known as price elasticity of demand, is the degree of responsiveness of demand to change in price. Its measure depends upon comparing the percentage change in the price with the resultant percentage change in the quantity demanded. Thus, elasticity of demand is the ratio of percentage change in amount demanded to a percent-age change in price. |
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| 400. |
The price of a commodity is the same as |
| A. | Average revenue |
| B. | Total cost |
| C. | Average cost |
| D. | Total revenue |
| Answer» A. Average revenue | |
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Explanation: Average Revenue refers to revenue received per unit of output sold. It is the same as Price of the commodity. Average revenue can be obtained by dividing the total revenue by the number of units sold. |
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Done Studing? Take A Test.
Great job completing your study session! Now it's time to put your knowledge to the test. Challenge yourself, see how much you've learned, and identify areas for improvement. Don’t worry, this is all part of the journey to mastery. Ready for the next step? Take a quiz to solidify what you've just studied.