Practice Test

Q1) Demand for a commodity refers to Show Answer

Q2) Contraction of demand is the result of Show Answer

Q3) All but one of the following are assumed to remain the same while drawing an individual's demand curve for a commodity .Which one is it ? Show Answer

Q4) In economics, demand refers to Show Answer

Q5) Demand is a Show Answer

Q6) The consumer demand those goods which gave Show Answer

Q7) Example of substitutes can be Show Answer

Q8) Example of complements can be Show Answer

Q9) The law of demand refers to relationship between Show Answer

Q10) The law of demand assumes that the following is constant Show Answer

Q11) When price of z rises it causes an increase in demand for goods X then X & Z are Show Answer

Q12) When price of z rises then the quantity in demand of goods X reduces. what is the relationship between X & Z Show Answer

Q13) Market demand is derived from individual demand curve by Show Answer

Q14) When price of a good changes,it brings about Show Answer

Q15) When price of a related good or income or taste changes,it brings about Show Answer

Q16) Rise in demand at original price is called Show Answer

Q17) Decrease in demand is due to Show Answer

Q18) The minus sign in elasticity of demand indicates Show Answer

Q19) What is elasticity of demand in case of necessities & luxuries ? Show Answer

Q20) In the case of essential demand is infinity ,it is called Show Answer

Q21) In case of essential goods the elasticity of demand is Show Answer

Q22) What is it called when elasticity of demand is one ? What shape will the demand curve take ? Show Answer

Q23) When price & outlay moves in the same direction, it is case of Show Answer

Q24) When the price & outlay move in opposite direction it is case of Show Answer

Q25) The formula of arc elasticity demand is Show Answer

Q26) If there is no change in quantity demanded to any charge in price then elasticity of demand is & shape of demand curve is Show Answer

Q27) If income of a household rises by 30% & demand falls by 10% then value of income elasticity of demand is Show Answer

Q28) If income of a household rises by 35% & demand falls by 10% then value of income elasticity of demand is Show Answer

Q29) If price of burger rises by 20% & demand falls by 25% then demand for burger is Show Answer

Q30) When demand is elastic then percentage change in demand to a change in price is Show Answer

Q31) What is the relationship between two goods when cross elasticity is positive & when it is negative ? Show Answer

Q32) Calculate cross elasticity when quantity demanded of a ink pen rises by 30 % as price of ink falls by 10 % Show Answer

Q33) Calculate elasticity when price of ball pen falls by 10 % then demanded of a ink falls by 10 % Show Answer

Q34) A declines in the price of X by Rs.2 causes an increase of 10 units in demand which goes up to 60 units. The new price is Rs.18 .Calculate elasticity of demand Show Answer

Q35) As the prices of a commodity rises from Rs.10 to Rs.12 ,its demand falls from 100 units to 50 units .calculate elasticity of demand Show Answer

Q36) As a consumers' income rises from Rs.3,000 to Rs.3,600 , demand rises from 25 units to 30 units .calculate elasticity of demand Show Answer

Q37) Cross elasticity of demand denotes a change in demand for one good due to change in whose aspects of the other good Show Answer

Q38) In a straight line downward sloping demand curve ,the elasticity of demand becomes greater as price Show Answer

Q39) Which goods has income elasticity greater than one & which has less than zero Show Answer

Q40) In diagrammatic method the value of point elasticity of demand on price axis is Show Answer

Q41) Law of demand does not hold in case of Show Answer

Q42) When the no.of uses of the purchase goods is less price elasticity of demand is Show Answer

Q43) When more substitutes are available elasticity of demand is Show Answer

Q44) When elasticity of demand is measured in terms of its substitutes & complements ,it is called Show Answer

Q45) What kind of goods has elastic demand Show Answer

Q46) Demand theories gives what kind of explanation of law of demand Show Answer

Q47) Name the economists who developed marginal utility theory & indifference curve theory Show Answer

Q48) What kind of satisfaction is utility which a consumer derives when he is willing to spend money on a stock of commodity which has the capacity to satisfy his wants ? Show Answer

Q49) MU is calculated as Show Answer

Q50) When there is no consumption , what value TU & MU takes ? Show Answer

Q51) In marginal utility rationality means Show Answer

Q52) Cardinally means utility can be Show Answer

Q53) Law of diminishing marginal utility states that the consumer buys more units of a commodity Show Answer

Q54) Ordinarily means utility can be Show Answer

Q55) Higher the consumer surplus implies state of economy Show Answer

Q56) The slope of indifference curve called Show Answer

Q57) Slope of budget line is Show Answer

Q58) If the consumer prefers A to B & B to C , then he prefers A to C. It is called property of Show Answer

Q59) A series of indifferent curve is called Show Answer

Q60) Convexity means slope is Show Answer

Q61) Convex indifferent curve is explained by Show Answer

Q62) Budget line is called Show Answer

Q63) Constraints in which budget line is made are Show Answer

Q64) Consumer's equilibrium occurs when Show Answer

Q65) Consumer's equilibrium condition is written as Show Answer

Q66) For the consumer's equilibrium to be stable, the requirement is Show Answer

Q67) What shows all possible combinations of two goods that can be bought by the consumer ? Show Answer

Q68) When MU is zero , TU is Show Answer

Q69) Assumption of constant marginal utility of money means importance of money to the consumers Show Answer

Q70) When indifferent curve is straight downward sloping line, the two goods are Show Answer

Q71) If MRS was increasing ,what shape will indifference curve take ? Show Answer

Q72) L-shaped indifference curve exist in case two goods are Show Answer

Q73) At the point of consumer's equilibrium indifference curve & budget curve are Show Answer

Q74) Which assumptions implies the consumer aims at utility maximization ? Show Answer

Q75) Which assumptions states that if the consumer prefers A to B then he will not prefer B to A in another time period ? Show Answer

Q76) Consumer surplus is more in case of Show Answer

Q77) In economics supply means Show Answer

Q78) When state of technology improves supply will Show Answer

Q79) When govt. imposes taxes supply will Show Answer

Q80) When govt. grants subsidies, supply will Show Answer

Q81) Which law states direct relationship between price & quantity supply of a commodity ? Show Answer

Q82) If the producer expects an increase in price of goods in the near future ,then current supply will Show Answer

Q83) When price of good X changes ,it brings about what kind of change in supply ? Show Answer

Q84) Elasticity of supply for a positively sloping supply curve that starts from price axis is Show Answer

Q85) When prices rises, quantity supplied Show Answer

Q86) Change in factor other than the price of good cause Show Answer

Q87) The percentage change in quantity supplied due to percentage change in price is called Show Answer

Q88) In case of perfectly elastic supply the supply curve is Show Answer

Q89) In the case of a straight line demand curve meeting the two axes, the price -elasticity of demand at the mid-point of the line would be ; Show Answer

Q90) The law of Demand ,assuming other things to remain constant ,establish the relationship between : Show Answer

Q91) Identify the faster which generally keeps the price -elasticity of demand for a good low Show Answer

Q92) Identify the co-efficient of price -elasticity of demand when the % increase quantity of a good demanded is smaller than the % fall in its price : Show Answer

Q93) In the case of an inferior good,the income elasticity of demand is Show Answer

Q94) If the demand for goods is inelastic , an increase in its prices will cause the total expenditure of the consumer of the good to Show Answer

Q95) If regardless of changes in its price ,the quantity demanded of a good remain unchanged , then the demand curve for goods will be: Show Answer

Q96) The law of Demand is Show Answer

Q97) All the following are determinants of demand except ? Show Answer

Q98) A movement along the demand curve for soft drinks is the best described as : Show Answer

Q99) If the price of pepsi decreases relative to the price of Coke & 7-UP,the demand for : Show Answer

Q100) If a good is a luxury ,Its income elasticity of demand is Show Answer

Q101) The price of hot dogs increases by 22% and the quantity of hot dogs demanded falls by 25%. This indicates that demand for hot dogs is : Show Answer

Q102) If the quantity demanded of beef increases by 5% when the price of chicken increases by 20%. The cross -price elasticity of demand between beef & chicken is Show Answer

Q103) Given the following four possibilities ,which one results in an increase in total consumer expenditure ? Show Answer

Q104) The price elasticity of demand for hamburger is Show Answer

Q105) The price elasticity of demand is defined as the responsiveness of Show Answer

Q106) Suppose the price of movies seen at a theater rise from Rs.120 per person to Rs.200 per person .The theater manager observes that the rise in price causes attendance at a given movie to fall from 300 persons to 200 persons .What is the price elasticity of demand for movies ? Show Answer

Q107) Suppose a department store has a sale on its silverware.If the price of a plate-setting is reduced from Rs.300 to Rs.200 & the quantity demanded increases from 3000 plates to 5000 .What is the price elasticity of demand for silverware ? Show Answer

Q108) A discount store has a special offer on CD's .It reduces their from Rs.150 to Rs.100 .Suppose the store manager observes that the quantity demanded increases from 700 CD's to 1,300 CD's .What is the price elasticity of demand for CD's ? Show Answer

Q109) If the local pizzeria raises the price of a medium pizza from Rs.60 to Rs.100 & the quantity demanded falls from 700 pizza a night to 100 pizzas a night .What is the price elasticity of demand for pizza ? Show Answer

Q110) If electricity demand is inelastic ,& electric rates increase ,which of the following is likely to occur ? Show Answer

Q111) Suppose the demand for a meals at a medium-priced restaurant is elastic.If the management of the restaurant is considering raising prices ,it can expect a relatively Show Answer

Q112) Point elasticity is useful for which of the following situations Show Answer

Q113) A decrease in the price will result in an increase in total revenue if Show Answer

Q114) An increase in the price will result in an increase in total revenue if Show Answer

Q115) Demand for a good will tend to be more elastic if it exhibits which of the following characteristics ? Show Answer

Q116) Suppose a consumer 's income increases from Rs.30,000 to Rs.36,000 .As a result , the consumer increases her purchase of compact discs(CD's) from 25 CD's to 30CD's .What is the consumer's income elasticity of demand for CD's ? Show Answer

Q117) Total utility is maximum when Show Answer

Q118) Which one is not an assumption of the theory of demand based on analysis of difference curves? Show Answer

Q119) The consumer is in equilibrium at a point where the budget line Show Answer

Q120) An indifference curve slopes down towards right since more of one commodity and less of another result in Show Answer

Q121) Which of the following statements is incorrect ? Show Answer

Q122) The second glass of lemonade gives lesser satisfaction to a thirsty boy .This is a clear case of Show Answer

Q123) The consumer is in equilibrium when the following condition is satisfied Show Answer

Q124) In the case of giffen goods,the demand curve will be Show Answer

Q125) By the consumer surplus economists mean Show Answer

Q126) When economists speak of the utility of a certain good , they are referring to Show Answer

Q127) A vertical supply curve parallel to Y axis implies that the elasticity of supply is Show Answer

Q128) The supply of a good refers to Show Answer

Q129) An increase in the supply of a good is caused by Show Answer

Q130) Elasticity of supply refers to the degree of responsiveness of a good to changes in its Show Answer

Q131) A horizontal supply curve parallel to the quantity axis implies that the elasticity of supply is Show Answer

Q132) Contraction of supply is the result of Show Answer