Question # 1

An increases in the price of mutton provides information which

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tells consumers to buy more mutton

tells consumers to buy more chicken

tells producers to produce more mutton

b and c of above

If equilibrium price rises but equilibrium quantity is unchanged, the cause is

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supply and demand both increase equally

supply and demand decrease equally

supply curve is vertical and demand increases

supply increases and demand is same

Markets where firms supply goods and services demanded by households are

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factor market

product market

open markets

resource markets

Extension of supply will take place as a consequence of:

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Change in price

Change in population

Change in technology

Change in money supply

Which one will be termed as supply of a product.

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One tone potato in cold storage

One ton rice offered for sale in market

One ton rice brought for sale in market at a certain price.

None of the three

A fall fall in supply will take place due to a:

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Business collusion

Bumper crop

Fall in custom duty

Fall in income

If price is set above equilibrium level, there will be

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surplus commodity in the market

shortage of commodity in the market

supply curve will shift

demand curve will shift

With an increase in cost of production, price of the product rises while supply of the product will.

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Fall

Rise

Remain unchanged

Non of the three

One of the following is not an assumption of law of supply.

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Political system should not changed

Cost of production should not changed

Production technique should not changed

Cost of raw material should not changed

If equilibrium price rises but equilibrium quantity remains unchanged, the cause is

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supply and demand both increase equally

supply and demand both decrease equally

supply decreases and demand increases

supply increases and demand decreases

Market equilibrium means

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number of buyers and sellers are equal

demand and supply of commodity are equal

no price is changing

prices rise very slowly

Demands and supply curves cross at

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always at 60 degree

at 90 degree

at equal angle

at any angle

When price is fixed below equilibrium level, there will be

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surplus commodity in the market

shortage of commodity in the market

supply curve will shift

demand curve will shift

Demand and supply forces determine market price

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only in perfect competition

only in monopoly market

in both markets

none of the above

A producers has one thousand tons of rice to be offered for sale at a certain price in future, it will be called.

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Supply of output

Production

Buffer stock

Stock

In market equilibrium, supply is vertical line. The downward sloping demand curve shifts to the right. Then

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price will fall

price remains same

price will rise

quantity rises

The price and sales of sugar both increase. What could be the cause of this?

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a decrease in the income of the consumers.

a decrease in the tax on sugar

An increase in the wages of workers in the sugar industry

An increase in the price of sugar substitutes

Ten rupees is the equilibrium price for good Z. If govt. fixes price at Rs. 5, there is

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a shortage

a surplus

excess supply

loss

Price of a product is determined in a free market

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by demand for the product

by supply of the product

by both demand and supply

by the government

When demand is perfectly elastic, an increase in supply will result in

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decrease in quantity sold

increase in quantity sold

fall in price

b and c above

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