Question # 1

If demand is not influenced by the changes in price, elasticity of demand will be

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Equal to unity

More than unity

Less than unity

Zero

If the ratio of change in demand is less than the ratio of change in price, elasticity of demand will be

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More than unity

Less than unity

Equal to unity

Zero

Demand for necessities of life is

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Les elastic

More elastic

Perfectly elastic

Perfectly inelastic

The cause of rise and fall of demand is

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income

price

population

Both 1st and 3rd

Demand for Giffen goods is:

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Negative

Vertical

Positive

All of them

Supply of goods depends on

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price

income

income and price

utility

Stock means the quantity of a commodity

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Which is offered for sale in the market

Which is sold in the market

Total production is called stock

Which the seller keeps in his possession without selling

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 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

Usually market price is ____________ normal price

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Equal to

Less than

More than

None of these

Unity method to measure elasticity of supply is presented by

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Adam Smith

Robbins

Marshall

Faruson

Demand for good like Television and VCR is

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Less elastic

More elastic

Perfectly inelastic

Infinitely elastic

Elasticity of demand for substitute and jointly demanded goods is called

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Income elasticity

Arc elasticity

Cross elasticity

Point 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

If 50% change in demand in response of 30% 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 supply rises more proportionately than that of demand, then

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Equilibrium price increases

Equilibrium price decreases

Equilibrium price does not change

Equilibrium quantity decreases

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

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