Question # 1

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

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

Non elastic demand curve is

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positive

negative

vertical

horizontal

When demand for a commodity changes due to the change in price of some other commodity, it is called

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Point elasticity

Arc elasticity

income elasticity

cross elasticity

The rate of change in Qd due to change in price is called:

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Rise in demand

Income Elasticity of demand

Price Elasticity of demand

Cross Elasticity of demand

Quantity supplied of a commodity extends because

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Population changes

Change occurs in assumtions of law of supply

Income of the entrepreneur increases

Price of the commodity increases

Elasticity of demand for substitute and jointly demanded goods is called

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Income elasticity

Arc elasticity

Cross elasticity

Point elasticity

Slope of demand curve of exceptions of law of demand is

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Negative

Positive

Zero

Fixed

If demand for commodity X changes due to the change in price of commodity, it is called

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Cross elasticity

Price elasticity

Income elasticity

Arc elasticity

If price of a commodity remains constant but its supply decreases or price increases but supply remains constant, it is called

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Rise of supply

Extension of supply

Fall of supply

Contraction of supply

Price is determined under perfect competition

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By sellers

By buyers

By government

By forces of demand and supply

Finance minister in order to increase the public revenue imposes the tax on the commodities whose demand is more elastic

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At low rate

At high rate

Some times decreases the rate and some times increases

Does not change Tax rate

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

Cause of shifting of supply curve is

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Change in price

Other factors

Change in tax

Change in income

According to the law of supply, there is relation in price and supply

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Inverse

Increasing

Negative

indirect

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

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

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