Question # 1

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

If demand decreases by 5% 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

What functional relationship is present between demand and price

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positive

inverse

increasing

none of these

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

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Zero

Infinite

Positive

Negative

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

Supply of goods depends upon

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Price

Income

Price and income

Utility

Quickly destroyable goods are called

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Superior goods

Inferior goods

Perishable goods

Giffen godds

Demand for the commodities having different uses

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Less elastic

More elastic

Perfectly inelastic

Infinitely elastic

If demand curve is parallel to y-axis, then elasticity of demand is

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Equal to unity

More than unity

Less than unity

Zero

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 supply curve is vertical (parallel to y-axis), then elasticity of supply is

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Zero

Infinite

Equal to unity

More than unity

Elasticity of demand for the commodities which have substitutes, is

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More elastic

Less elastic

Infinite

Zero

The equilibrium of the market is that demand and supply to each other are

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opposite

positive

equal

negative

If the total expenditure of the consumer increases due to increase in price, then nature of elasticity of demand will be

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Equal to unity

Less than unity

More than unity

Elasticity of demand = zero

If demand does not change, despite a fall in price, is called

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Fall of demand

Rise of demand

Contraction of demand

Extension of demand

Supply curve shifts due to better technique of production

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Rightward

Leftward

Does not change

Vertical

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

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