Question # 1

If total expenditure of the consumer decreases 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

Demand for basic necessities of life is:

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Perfectly elastic

Less elastic

Perfectly inelastic

More elastic

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

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

When there is big change in demand and price of a commodity, it is called

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Point elasticity

Arc elasticity

Cross elasticity

Income elasticity

According to law of demand, curve moves from left to right downward. This type of tendency is called

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Positive tendency

Negative tendency

Extension and contraction of demand

Rise and fall of demand

If supply is fixed then due to fall of demand

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Equilibrium price decreases

Equilibrium quantity increases

Equilibrium price increases

Equilibrium price does not change

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

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

Price and demand has a relationship:

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Negative

Positive

Functional

Both a & c

Unitary method is also known as:

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Total revenue

Total satisfaction

Total utility

Total expenditure

Unitary method for Elasticity of demand was presented by:

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Marshall

Keynes

Robbins

Adam smith

The price at which quantity demanded and supplied are equal

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Equilibrium price

Reserve price

Fixed price

Variable price

If there is slight change in price and demand, it is called

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Arc elasticity

Point elasticity

Income elasticity

Cross elasticity

When supply curve shifts leftwards or up, it is called

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Rise of supply

Fall of supply

Extension of supply

Contraction of supply

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

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