Question # 1

What functional relationship is present between demand and price

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positive

inverse

increasing

none of these

If quantity demanded for a commodity changes due to the change in income, it is called

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Price elasticity

Point elasticity

Cross elasticity

Income elasticity

When supply curve shifts rightward or down it is called

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Rise of supply

Fall of supply

Extension of supply

Contraction of supply

If demand and supply both fall in the same proportion

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Equilibrium price increases

Equilibrium price decreases

Equilibrium price does not change

Equilibrium quantity increases

Unitary method for Elasticity of demand was presented by:

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Marshall

Keynes

Robbins

Adam smith

Shape of market supply curve is

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Horizontal or parallel to ox curve

Vertical or parallel to oy curve

Positively sloping

Negatively sloping

Price is determined under perfect competition

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By sellers

By buyers

By government

By forces of demand and supply

A textile mill produces 2000 meters cloth. Entrepreneur offers 1500 meters cloth to sell at price Rs 100 per meter and 500 meters cloth keeps with him. Cloth kept by the entrepreneur is called

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Total production

Supply

Stock

Surplus production

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

The goods on which law of demand does not apply, are called

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Services

Goods and services

Giffin goods

Capital goods

If two goods are complimentary, cross Elasticity of demand will be:

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Zero

Infinite

Positive

Negative

If quantity demand changes due to the change in income, it is called:

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Point Elasticity of demand

Arc Elasticity of demand

Income Elasticity of demand

Price Elasticity of demand

Under certain conditions, slope of demand curve is

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Negative

Positive

Zero

Fixed

If supply of a commodity changes by 10% due to 10% change in its price, then elasticity of supply will be

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Equal to unity

More than unity

Less than unity

Zero

Usually market price is ____________ normal price

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Equal to

Less than

More than

None of these

Cause of shifting of supply curve is

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Change in price

Other factors

Change in tax

Change in income

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

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