Question # 1

Ten rupees is the equilibrium price for good Z. If govt. fixes price at Rs. 5, there is

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a shortage

a surplus

excess supply

loss

If we know that quantities bought and sold are equal, we can conclude that

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quantities demanded and supplied are also equal

the market is in equilibrium

there will be no tendency for a price change

all of the above

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

Market equilibrium means

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number of buyers and sellers are equal

demand and supply of commodity are equal

no price is changing

prices rise very slowly

A decrease in demand causes the equilibrium price to

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rise

fall

remain constant

indeterminate

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

If price is set above 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

A rise in supply and demand in equal proportion will result in

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increase in equilibrium price and decrease in equilibrium quantity

decreases in equilibrium price and increases in equilibrium quantity

no change in equilibrium price and increases in equilibrium quantity

increases in equilibrium price and no change in equilibrium quantity

Markets where firms supply goods and services demanded by households are

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factor market

product market

open markets

resource markets

Demands and supply curves cross at

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always at 60 degree

at 90 degree

at equal angle

at any angle

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

When the price of a product increase by 100 percent and as a consequence, its quantity supplied increase by 125 percent, Its elasticity of supply will be.

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Less than unity

Greater than unity

Equal to unity

Equal to zero

A change in price brings in quantity supplied. it will be.

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Rise in supply

Contraction of supply

Fall in supply

Extension of supply

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Economics Ics Part 1 English Medium Chapter 6 Online Test MCQs With Answers

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