Question # 1

When the price of a product falls and as a concequence the demand for the product increase. it will be.

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Rise of demands

Fall of demand

Extension of demand

Contraction on demand

The demand of a will expand when:

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Other things do not remain constant.

Price of the products changes.

Value of money falls.

None of the three

The demand curve is negatively sloped due to

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Income effect

Substitution effect

Price effect

All the three

The law of demand will not be apply in case of

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Inferior goods

Superior goods

Normal goods

Non of them

When demand is perfectly inelastic, an increase in price will result in

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decrease in total revenue

increase in total revenue

no change in total revenue

decrease in quantity demanded

Law of demand shows relation between

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income and price of commodity

price and quantity of a commodity

income and quantity demanded

quantity demanded and quantity supplied

The law demand will not be valid in case of.

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Very high price products

Normal goods

Price effect

Income effects

Irrespecitve of price, Somia always spends Rs. 100 a week on ice cream, we conculde that

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elasticity of demand is 0

elasticity of demand is 1

elasticity of demand id infinite

law of demand has been violated

The demand curve slopes downward from left to right because of:

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Income effect

Substitution effect

Entry of new buyers

All of the above

Market demand curve is a summation of all individual demand curves as

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Vertical

horizontal

mathematical

local

Which one can cause a change in demand

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change in income

change in supply

change in tastes

a and c of above

This is an assumption of law of demand

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price of the commodity does not change

quantity should not change

supply should not change

income of consumer should not change

To say that two goods are unrelated, their cross price elasticity of demand should be

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less than 0

greater than 0

equal to 0

1

Demand is a function of

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price

quantity

supply

none

A seller can increase his sales revenue by charging a lower price, if the demand has

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e < 1

e = 1

e > 1

e = 0

Wit rapid economic growth in a country the individual demand curve will:

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Rise

Fall

Extend

Contract

Which one is the assumption of law of demand?

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price of the commodity should not change

quantity demand should not change

income of the consumer should not change

none of the above

Price elastic of demand measures

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change in price caused by changes in demand

the rate of change of sales

the responsiveness of demand to price changes

the value of sales at a given price

If quantity demanded is completely unresponsive to changes in price, demand is

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inelastic

unit elastic

elastic

perfectly inelastic

The elasticity of demand of durable goods is

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less than unity

greater than unity

equal to unity

zero

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