Question # 1

If the demand for a commodity is less elastic, then an entrepreneur in order to increase his profit

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Will increase its price

Will decrease its price

Will not change its price

None of these

Usually market price is ____________ normal price

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Equal to

Less than

More than

None of these

That particular price below which price the seller is not ready to sell his commodity, is called

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Market price

Normal price

Reserve price

All the three

If supply increase due to increase in price, it is called

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Extension of supply

Contraction of supply

Rise of supply

Fall of supply

Price and demand has a relationship:

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Negative

Positive

Functional

Both a & c

Slope of demand curve is

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Negative

Positive

zero

fixed

Elasticity of supply if perishable goods is

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Equal to unity

More than unity

Less than unity

Zero

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

In which direction demand and supply curves move

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Same

Opposite

parallel

Horizontal

The cause of extension and contraction of demand is

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Income

Price

Population

Technology

If demand decreases by 5% 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

When demand curve shifts leftward (or downward), it is called

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Rise of demand

Fall of demand

Extension of demand

Contraction of demand

Market price will be determined where

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Supply is more than demand

Demand is more than supply

Demand and supply are equal

Demand is less elastic and supply is more elastic

Quantity of a commodity which a person is ready to purchase at a particular price, is called

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Individual demand

Market demand

Supply

Market Supply

If demand changes by 10% due to 10% change in price, then elasticity of demand is called

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Equal to unity

More than unity

Less than unity

Infinite

Market equilibrium is determined when

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Demand = supply

Demand > supply

Demand < supply

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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