Question # 1

Finance minister in order to increase the public revenue imposes the tax on the commodities whose demand is more elastic

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At low rate

At high rate

Some times decreases the rate and some times increases

Does not change Tax rate

Some inferior goods having expensive substitutes are known as:

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Economic goods

Giffen goods

Non-economic goods

Free goods

If demand decreases by 15% due to 10% increase in Price, then elasticity of demand is

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Equal to unity

More than unity

Less than unity

Zero

Due to fall in demand, curve shifts to

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Right

Left

Both sides

None of these

Demand for luxuries in

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Les elastic

More elastic

Perfectly elastic

Perfectly inelastic

Quantity of a commodity which a person is ready to purchase at a particular price, is called

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Individual demand

Market demand

Supply

Market Supply

If price of a commodity constant but its supply increases or price decreases but supply remains constant, it is called

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Rise of supply

Fall of supply

Extension of supply

Contraction of supply

Vertical supply curve means

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Same quantity supplied at differented price

Different quantities supplied at one price

Different quantities supplied at different prices

None of three

If supply decreases due to decrease in price, it is called

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Extension of supply

Contraction of supply

Rise of supply

Fall of supply

Supply curve shifts due to better technique of production

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Rightward

Leftward

Does not change

Vertical

If supply of a commodity is fixed, it is called

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Market supply

Short period supply

Long period supply

Middle period supply

Demand for a commodity means

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Desire to purchase

Power to purchase

Price of commodity

All the three

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

Cause of positive slope of supply curve

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Change in cost of production

Fear of increase in cost of production and decrease in profit

Change in technique of production

Increase in per unit profit due to increase in price

Movement on the same demand curve is called:

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Increase is demand

Rise and fall in demand

Decrease in demand

Expansions and contraction in demand

If supply increase due to increase in price, it is called

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Extension of supply

Contraction of supply

Rise of supply

Fall of supply

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

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