Question # 1

If total expenditure of the consumer increases due to decrease 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 supply of a commodity changes by more than 10% due to 10% change in its price, then elasticity of supply will be

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Equal to unity

More than unity

Less than unity

Infinite

If supply curve is horizontal (parallel to x-axis) then elasticity of supply is

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Zero

Infinite

Equal to unity

More than unity

Which one is increasing function of price

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Demand

Supply

Utility

Consumption

Supply of perishable goods is

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More elastic

less elastic

Perfectly inelastic

infinite elasticity of supply

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

When demand curve shifts rightward (or upward), it is called

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Rise of demand

Fall of demand

Extension of demand

Contraction of demand

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 50% change in demand in reposne of 50% change in price then:

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Elasticity of demand = 1

Elasticity of demand < 1

Elasticity of demand > 1

Elasticity of demand = 0

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

Measurement of arc elasticity of demand was present:

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Keynes

Marshall

Adam smith

R.G.D Allen

Demand for luxuries in

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Les elastic

More elastic

Perfectly elastic

Perfectly inelastic

If supply does not change, then due to fall of demand

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Equilibrium price decreases

Equilibrium price increases

Equilibrium price does not change

Equilibrium quantity increases

Demand for the commodities having different uses

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Less elastic

More elastic

Perfectly inelastic

Infinitely elastic

If the rate of change in price and quantity demand is in equal ratio, then Elasticity of demand is:

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Equal to zero

Equal to one

Smaller than one

Greater than one

Some inferior goods having expensive substitutes are known as:

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Economic goods

Giffen goods

Non-economic goods

Free goods

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

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