Question # 1

If demand is inelastic, a change in the price

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will change the quantity in same direction

will change total revenue in same direction

will change total revenue in the opposite direction

will not change quantity

The following are causes of shift in demand EXCEPT the one

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change in income

change in price

change in fashion

change in prices of substitutes

One of the following will not cause a rise and fall on demand.

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Change in income

Change in weather

Discovery of a substitute

Distribution of income remaining the same

When the demand of a product rises due to factors except price it will be.

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Extension of demands

Rise of demand

Contraction of demand

Extension of demand

If price elasticity of demand is very low, the commodity is

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necessity

luxury

substitute

not available

The demand curve slopes downward from left to right because of:

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Income effect

Substitution effect

Entry of new buyers

All of the above

To say that two goods are unrelated, their cross price elasticity of demand should be

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less than 0

greater than 0

equal to 0

1

The demand of a commodity having many substitutes is

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more elastic

less elastic

zero elastic

infinite elastic

A horizontal demand curve has a price elasticity of

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zero

infinity

1

variable

Price and demand are positively correlated in case of

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necessities

comforts

Giffen goods

Luxuries

Income elasticity of demand for normal good is always

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1

more than one

negative

positive

The law of demand will not be apply in case of

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Inferior goods

Superior goods

Normal goods

Non of them

This is the assumption of law of demand

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price of the commodity should not change

Quantity demanded should not change

Price of substitutes should not change

Demand curve must be linear

Cross elasticity of Suzuki and Honda cars will be

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Positive

negative

zero

infinite

Haris has a special taste for chicken rolls of college canteen. The owner of the canteen doubles the price of chicken roll. Haris did not respond to the increase in prices and kept on demanding the same quantity of chicken roll. His demand for chicken roll is

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perfectly elastic

perfectly inelastic

elastic

less elastic

Which one can cause a change in demand

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change in income

change in supply

change in tastes

a and c of above

Wit rapid economic growth in a country the individual demand curve will:

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Rise

Fall

Extend

Contract

One of the following is not an exception the law of demand.

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Very high price products

Very low price products

Ignorance of consumers

Non of the above

A seller can increase his sales revenue by charging a lower price, if the demand has

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e < 1

e = 1

e > 1

e = 0

When the price of a product falls and as a concequence the demand for the product increase. it will be.

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Rise of demands

Fall of demand

Extension of demand

Contraction on demand

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Economics Ics Part 1 English Medium Chapter 4 Online Test MCQs With Answers

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