Question # 1

One of the following is not an assumption of law of supply.

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Political system should not changed

Cost of production should not changed

Production technique should not changed

Cost of raw material should not changed

Demands and supply curves cross at

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always at 60 degree

at 90 degree

at equal angle

at any angle

An increases in the price of mutton provides information which

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tells consumers to buy more mutton

tells consumers to buy more chicken

tells producers to produce more mutton

b and c of above

When price is fixed below equilibrium level, there will be

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surplus commodity in the market

shortage of commodity in the market

supply curve will shift

demand curve will shift

With an increase in cost of production, price of the product rises while supply of the product will.

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Fall

Rise

Remain unchanged

Non of the three

When the supply curve of a product is parallel to the vertical axis, it would mean that;

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Different quantities of a product are supplied at the same price.

Different quantities of a product are supplied at different price.

Same quantities of a product are supplied at different price.

None of three

Equilibrium

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is a state that can never be achieved in economics

is an important idea for predicting economics changes

is a stable condition

is an unstable condition

Demand and supply forces determine market price

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only in perfect competition

only in monopoly market

in both markets

none of the above

Perfectly inelastic supply curve is:

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Parallel to vertical axis

Parallel to horizontal axis

Rises upward to the right

Falls downward to the right

Price of a product is determined in a free market

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by demand for the product

by supply of the product

by both demand and supply

by the government

Markets where firms supply goods and services demanded by households are

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factor market

product market

open markets

resource markets

The price and sales of sugar both increase. What could be the cause of this?

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a decrease in the income of the consumers.

a decrease in the tax on sugar

An increase in the wages of workers in the sugar industry

An increase in the price of sugar substitutes

Extension of supply will take place as a consequence of:

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Change in price

Change in population

Change in technology

Change in money supply

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