Question # 1

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

If the ratio of change in demand is equal to the ratio of change in price, elasticity of demand will be

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More than unity

Less than unity

Equal to unity

Infinite

Relationship between price of a commodity and demand for it exists

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Positive

Inverse

Indirect

None of these

Under certain conditions, slope of demand curve is

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Negative

Positive

Zero

Fixed

Unity method to measure elasticity of supply is presented by

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Adam Smith

Robbins

Marshall

Faruson

According to law of supply, supply curve moves from left to right upward, this tendency is called

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Positive

Negative

Horizontal

Vertical

Supply curve moves from left to right upward, this tendency is called

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Negative

Positive

Horizontal

Vertical

According to law of demand, when price of a commodity decreases, then demand curve

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Moves from left to right upward

Moves from left to right downward

Moves vertically

Moves horizontally

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

If demand and supply both fall in the same proportion

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Equilibrium price increases

Equilibrium price decreases

Equilibrium price does not change

Equilibrium quantity increases

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

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

Demand for good like Television and VCR is

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Less elastic

More elastic

Perfectly inelastic

Infinitely elastic

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

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

Quickly destroyable goods are called

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Superior goods

Inferior goods

Perishable goods

Giffen godds

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

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