Question # 1

The cause of extension and contraction of demand is

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Income

Price

Population

Technology

Demand for basic necessities of life is:

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Perfectly elastic

Less elastic

Perfectly inelastic

More elastic

Measurement of arc elasticity of demand was present:

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Keynes

Marshall

Adam smith

R.G.D Allen

Formula method to measure elasticity of supply is related to

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Marshall

Robbins

R.G.D Allen

Flux

If demand falls more proportionately then that of supply then

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Equilibrium price increases

Equilibrium price decreases

Equilibrium price does not change

Equilibrium quantity increases

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

If percentage change in supply is less than the percentage change in price, then elasticity of supply is called

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Equal to unity

Less than unity

More than unity

Zero

If supply curve is vertical (parallel to y-axis), then elasticity of supply is

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Zero

Infinite

Equal to unity

More than unity

In case of rise in demand, demand curve shifts:

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Right side

Downward

Upward

(a) and (c)

Rise of supply can be shown with the help of

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A supply curve

More than one supply curves

Fixed supply curve

Vertical supply curve

The quantity of commodity which exists in warehouse (stock) of the seller is called

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Supply

Demand

Stock

All of these

Price and demand has a relationship:

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Negative

Positive

Functional

Both a & c

If there is big change in Price and demand, it is called

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Arc elasticity

Point elasticity

Income elasticity

Cross elasticity

According to law of demand, when price of a commodity decreases, then demand curve

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Moves from left to right upward

Moves from left to right downward

Moves vertically

Moves horizontally

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

Under certain conditions, slope of demand curve is

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Negative

Positive

Zero

Fixed

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

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