Question # 1

What is meant by demand for a commodity in economics

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To desire for a commodity

To have power to buy

To have power to buy a commodity with desire

Quantity of a commodity

A textile mill produces 2000 meters cloth. Entrepreneur offers 1500 meters cloth to sell at price Rs 100 per meter and 500 meters cloth keeps with him. Cloth kept by the entrepreneur is called

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Total production

Supply

Stock

Surplus production

Slope of demand curve of exceptions of law of demand is

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Negative

Positive

Zero

Fixed

When price of a commodity decreases but its demand does not change, this situation is called

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Constant demand

Fall of demand

Rise of demand

Extension of demand

Who does determine the reserve price

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Buyer

Seller

Government

District adminitration

Demand for the goods which have different uses, is

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More elastic

Less elastic

Infinity

Zero elastic

Elasticity of demand for luxuries is

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Equal to unity

More than unity

Less than unity

Zero

If supply decreases due to decrease in price, it is called

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Extension of supply

Contraction of supply

Rise of supply

Fall of supply

Cause of shifting of supply curve is

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Change in price

Other factors

Change in tax

Change in income

If the total expenditure of the consumer increases due to increase 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

Demand for luxuries in

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Les elastic

More elastic

Perfectly elastic

Perfectly inelastic

If same amount of good is supplied at higher price, it is called

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Expansion of supply

Contraction of supply

Fall in supply

Rise in supply

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

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 ratio of change in demand is equal to the ratio of change in price, elasticity of demand will be

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More than unity

Less than unity

Equal to unity

Infinite

If demand decreases by 15% due to 10% increase in Price, then elasticity of demand is

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Equal to unity

More than unity

Less than unity

Zero

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

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