Question # 1

If the ratio of change in demand is less than the ratio of change in price, elasticity of demand will be

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More than unity

Less than unity

Equal to unity

Zero

When supply increases due to other factors besides price, it is called

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Extension of supply

Contraction of supply

Rise of supply

Fall of supply

Supply means

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total money of a specific producer

Number of buyers

quantity of goods offered for sale at different prices

purchasing power of quantity supplied

If 50% change in demand in response of 30% change in price then:

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Elasticity of demand = 1

Elasticity of demand < 1

Elasticity of demand > 1

Elasticity of demand = 0

In order to satisfy some wants, more than one commodities are needed. Demand for such commodities is called

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Joint demand

Composite demand

Derived demand

Direct demand

Supply curve shifts due to better technique of production

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Rightward

Leftward

Does not change

Vertical

Another name of unitary method is

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Total satisfiaction method

Total expenditure method

Total revenue method

Both 2nd and 3rd

Cause of shifting of supply curve is

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Change in price

Other factors

Change in tax

Change in income

Price is determined under perfect competition

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By sellers

By buyers

By government

By forces of demand and supply

Demand for good like Television and VCR is

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Less elastic

More elastic

Perfectly inelastic

Infinitely elastic

With an increase in the price of any good its substitutes will have

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a fall in its price

an increase in its prices

an increase in its demand

a decrease in its price

Demand for the commodities having different uses

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Less elastic

More elastic

Perfectly inelastic

Infinitely elastic

Elasticity of demand for substitute and jointly demanded goods is called

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Income elasticity

Arc elasticity

Cross elasticity

Point elasticity

According to law of demand, curve moves from left to right downward. This type of tendency is called

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Positive tendency

Negative tendency

Extension and contraction of demand

Rise and fall of demand

If elasticity of supply is equal to unity then extending supply curve downward, it passes through or crosses

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y-axis

x-axis

Point of origin

Becomes vertical

If supply curve is horizontal (parallel to x-axis) then elasticity of supply is

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Zero

Infinite

Equal to unity

More than unity

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

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