Question # 1

If demand for a commodity changes due to change in price of its substitute, it is called

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Price elasticity

Point elasticity

Cross elasticity

Arc elasticity

When supply changes due to other factors besides price, it is called

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Rise of supply

Fall of supply

Rise and fall of supply

Extension and contraction of supply

In case of perfectly elastic supply or infinite elasticity of supply, supply curve is

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Horizontal (parallel to x-axis)

Vertical (parallel to y-axis)

Positive sloped

Negative sloped

Usually market price is ____________ normal price

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Equal to

Less than

More than

None of these

The duty of a market is not to

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make exchange of goods

contact buyers and sellers

determine price

give maximum output

If demand rises more proportionately than that of supply, then

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Equilibrium price increases

Equilibrium price decreases

Equilibrium price does not change

Equilibrium quantity decreases

If two goods are substitute, cross Elasticity of demand will be:

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Zero

Infinite

Positive

Negative

Relationship between price of a commodity and demand for it exists

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Positive

Inverse

Indirect

None of these

With an increase in the price of any good its substitutes will have

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a fall in its price

an increase in its prices

an increase in its demand

a decrease in its price

Unitary method is also known as:

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Total revenue

Total satisfaction

Total utility

Total expenditure

Which one is not condition of perfect competition

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Homogeneity of good

Difference in price of good

Large number of buyers and sellers

Perfect knowledge of market

If the demand for a commodity is more elastic, then an entrepreneur in order to increase his profit

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Will increase its price

Will decrease its price

Will not change its price

None of these

Desire + Purchasing power is equal to:

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Demand

Supply

Income

Utility

According to law of supply, supply curve moves from left to right upward, this tendency is called

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Positive

Negative

Horizontal

Vertical

If the total expenditure of the consumer does not change due to increase or decrease (change) in price, then nature of elasticity of demand will be

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Equal to unity

Less than unity

More than unity

Elasticity of demand = zero

If demand curve is parallel to x-axis, then elasticity of demand is

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Infinite

Zero

Equal to unity

More than unity

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Principles of Economics Icom Part 1 English Medium Chapter 3 Online Test MCQs With Answers

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