Question # 1

A decrease in demand causes the equilibrium price to

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rise

fall

remain constant

indeterminate

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 the price of a product increase by 100 percent and as a consequence, its quantity supplied increase by 125 percent, Its elasticity of supply will be.

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Less than unity

Greater than unity

Equal to unity

Equal to zero

A rise in supply and demand in equal proportion will result in

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increase in equilibrium price and decrease in equilibrium quantity

decreases in equilibrium price and increases in equilibrium quantity

no change in equilibrium price and increases in equilibrium quantity

increases in equilibrium price and no change in equilibrium quantity

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

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

Demands and supply curves cross at

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always at 60 degree

at 90 degree

at equal angle

at any angle

Equilibrium

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is a state that can never be achieved in economics

is an important idea for predicting economics changes

is a stable condition

is an unstable condition

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

In case of a fall in supply.

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Quantity supplied falls at the same price.

Quantity supplied rises at the same price.

Quantity supplied remain at the lower price.

None of the three

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

If we know that quantities bought and sold are equal, we can conclude that

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quantities demanded and supplied are also equal

the market is in equilibrium

there will be no tendency for a price change

all of the above

Markets where firms supply goods and services demanded by households are

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factor market

product market

open markets

resource markets

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

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

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

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

When the supply curve of a product is parallel to the vertical axis, it would mean that;

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Different quantities of a product are supplied at the same price.

Different quantities of a product are supplied at different price.

Same quantities of a product are supplied at different price.

None of 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

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