McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Arts in Political Science (BA political science) , Union Public Service Commission (UPSC) , Indian Administrative Service (IAS) .
| 51. |
Other things remaining the same, the quantity of a product demanded increases with ------------ in price. |
| A. | Increase |
| B. | Decrease |
| C. | Variation |
| D. | None of the above |
| Answer» B. Decrease | |
| 52. |
When total utility is maximum, marginal utility is: |
| A. | Maximum |
| B. | One |
| C. | Zero |
| D. | Infinite |
| Answer» C. Zero | |
| 53. |
For complementary goods, the cross elasticity of demand: |
| A. | Positive |
| B. | Negative |
| C. | Zero |
| D. | None |
| Answer» B. Negative | |
| 54. |
Relation between price of a commodity and demand for another commodity is measured by: |
| A. | Price elasticity |
| B. | Income elasticity |
| C. | Cross elasticity |
| D. | Elasticity of substitution |
| Answer» C. Cross elasticity | |
| 55. |
When TU falls, MU is: |
| A. | Rises |
| B. | Zero |
| C. | Positive |
| D. | Negative |
| Answer» D. Negative | |
| 56. |
Demand varies ------------- with price. |
| A. | Directly |
| B. | Positively |
| C. | Inversely |
| D. | None of the above |
| Answer» C. Inversely | |
| 57. |
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 | |
| 58. |
Income elasticity of demand for inferior good is: |
| A. | Negative |
| B. | Positive |
| C. | Zero |
| D. | Unity |
| Answer» A. Negative | |
| 59. |
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 | |
| 60. |
Income elasticity is positive, but less than unity in the case of: |
| A. | Necessity |
| B. | Luxury |
| C. | Inferior |
| D. | Substitutes |
| Answer» A. Necessity | |
| 61. |
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 | |
| 62. |
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 | |
| 63. |
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 | |
| 64. |
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 | |
| 65. |
If the quantity demanded remains unchanged as the price of the commodity falls, the coefficient of price elasticity of demand is: |
| A. | Greater than |
| B. | one Equal to one |
| C. | Smaller than one |
| D. | Zero |
| Answer» D. Zero | |
| 66. |
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 | |
| 67. |
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 | |
| 68. |
Which of the following is an exception to the law of demand? |
| A. | Giffen good |
| B. | Normal good |
| C. | Superior good |
| D. | All of the above |
| Answer» A. Giffen good | |
| 69. |
The law of diminishing marginal utility was popularized by: |
| A. | Keynes |
| B. | Marshall |
| C. | Smith |
| D. | Samuelson |
| Answer» B. Marshall | |
| 70. |
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 | |
| 71. |
Cross elasticity of demand in the case of substitutes: |
| A. | Zero |
| B. | Negative |
| C. | Positive |
| D. | Infinity |
| Answer» C. Positive | |
| 72. |
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» A. Perfectly elastic | |
| 73. |
Net addition to total utility when one more unit is consumed is: |
| A. | AU |
| B. | MU |
| C. | MC |
| D. | TU |
| Answer» B. MU | |
| 74. |
Most important determinant of demand is : |
| A. | Income |
| B. | Wealth |
| C. | Price |
| D. | Advertisement |
| Answer» C. Price | |
| 75. |
Which of the following is the reason for law of demand: |
| A. | Price effect |
| B. | Backlash effect |
| C. | Income effect |
| D. | Real balance effect |
| Answer» C. Income effect | |
| 76. |
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 | |
| 77. |
Net addition to total cost is called: |
| A. | Marginal cost |
| B. | Average cost |
| C. | Fixed cost |
| D. | Variable cost |
| Answer» A. Marginal cost | |
| 78. |
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 | |
| 79. |
When there are only few sellers of the commodity, the market is called: |
| A. | Monopoly |
| B. | Duopoly |
| C. | Oligopoly |
| D. | Monopsony |
| Answer» C. Oligopoly | |
| 80. |
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 | |
| 81. |
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 | |
| 82. |
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 | |
| 83. |
In which of the following market, advertisement is absent: |
| A. | Monopolistic competition |
| B. | Perfect competition |
| C. | Oligopoly |
| D. | None of the above |
| Answer» C. Oligopoly | |
| 84. |
-------------- cost can never become zero. |
| A. | Variable cost |
| B. | Fixed cost |
| C. | Marginal cost |
| D. | Average cost |
| Answer» B. Fixed cost | |
| 85. |
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 | |
| 86. |
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 | |
| 87. |
Average cost is the sum of AVC and |
| A. | MC |
| B. | TC |
| C. | AFC |
| D. | ATC |
| Answer» C. AFC | |
| 88. |
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 | |
| 89. |
When output is zero, variable cost is -------- |
| A. | Maximum |
| B. | Minimum |
| C. | Infinity |
| D. | Zero |
| Answer» D. Zero | |
| 90. |
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 | |
| 91. |
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 | |
| 92. |
When MC cuts AC, AC is at its ------------ |
| A. | Maximum |
| B. | Minimum |
| C. | Zero |
| D. | Negative |
| Answer» B. Minimum | |
| 93. |
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 | |
| 94. |
Cost function relates cost to |
| A. | Input |
| B. | Output |
| C. | Raw material |
| D. | Machines |
| Answer» B. Output | |
| 95. |
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 | |
| 96. |
There is no distinction between firm and industry in |
| A. | Perfect competition |
| B. | Monopoly |
| C. | Monopolistic competition |
| D. | Oligopoly |
| Answer» B. Monopoly | |
| 97. |
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 | |
| 98. |
The cost of next best alternative is called |
| A. | Marginal cost |
| B. | Average cost |
| C. | Opportunity cost |
| D. | Direct cost |
| Answer» C. Opportunity cost | |
| 99. |
When MC is greater than AC, AC |
| A. | Rises |
| B. | Falls |
| C. | Maximum |
| D. | Minimum |
| Answer» A. Rises | |
| 100. |
There is ------- relationship between price and quantity supplied |
| A. | Positive |
| B. | Negative |
| C. | Constant |
| D. | Inverse |
| Answer» A. Positive | |
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