Description : Increase in price of a product reduces the purchasing power as a result of which demand for a product goes up. This effect is known as (a) Substitution effect ; (b) Income effect ; (c) Diminishing marginal utility concept (d)Law of diminishing returns
Last Answer : ; (b) Income effect ;
Description : An imposition of excise duty would effect the demand of a product due to ………….. (a) Income effect ; (b) Substitution effect ; (c) Both ; (d) None
Last Answer : (c) Both ;
Description : Decreases in price of a product results in increased consumption of the product as the product becomes cheaper compared to other products. This effect is known as (a) Substitution effect ; (b) Income effect ; (c) Diminishing marginal utility concept; (b) Law of diminishing returns
Last Answer : (a) Substitution effect ;
Description : According to traditional approach the factor responsible for operation of downward slope of demand curve are (a) Change in number of consumers ; (b) Law of decreasing marginal utility (c) Alternative uses of goods ; (d) All the three
Last Answer : (d) All the three
Description : Assume Samantha likes hot dogs and hamburgers equally, and the price of hamburgers (a normal good) declines. She will most likely purchase more hamburgers; this is (a) a reflection of the income ... substitution effect; (c) a reflection of the income and substitution effects ; (d) None of above
Last Answer : (b) a reflection the substitution effect;
Description : Traditional approach to law of Demand was propounded by (a) Giffen ; (b) A Samulson ; (c) Alfred Marshall ; (d) Pique
Last Answer : (c) Alfred Marshall ;
Description : Tea and Coffee are perfect substitute of each other, given the price of Tea and Coffee being `100 and `200 per Kg. a consumer is prepared to buy 3 Kg. of each. If the price of tea remain same and the price of ... elasticity of substitution between Tea and Coffee is (a) 1 ; (b) 4 ; (c) 5 ; (d) 3
Last Answer : (c) 5 ;
Description : According to law of demand (a) Higher the price higher the production of the product (b) Higher the price lower the cost of production (c) Lower the price higher the demand for the product (d) Higher price higher the quantity the more the consumer demand
Last Answer : (c) Lower the price higher the demand for the product
Description : According to law of supply ……….. (a) Higher the price higher the production of the product; (b) Higher the price lower the cost of production ; (c) Lower the price lower the demand for the product; (d) Higher the price higher the quantity the seller is prepared to supply in market
Last Answer : (d) Higher the price higher the quantity the seller is prepared to supply in market
Description : The law of indifference is/are also know by- (a) Law of substitution ; (b) law of equimarginal utility ; (c) Law of diminishing marginal utility (d) All the three
Description : Under the law of demand ceteris paribus is/are (a) Price of other goods ; (b) Disposal income ; (c) Tastes and preferences ; (d) All the three
Description : Which of these are exception to law of Demand (a) Giffen effect/goods ; (b) Future change in prices ; (c) Change in fashion ; (d) All the three
Description : If two goods are not substitutes at all for one another, the elasticity of substitution will be (a) Infinite ; (b) Zero ; (c) > 1 ; (d) < 0
Last Answer : ; (b) Zero ;
Description : If two goods are perfect substitutes for one another, the elasticity of substitution will be (a) Infinite ; (b) Zero ; (c) > 1 ; (d) < 0
Last Answer : (a) Infinite ;
Description : Goods which are not perfect substitute of each other but have to be consumed in a fixed ratio will have rate of substitution (a) Unity ; (b) Less than 1 ; (c) More than 1 ; (d) Zero
Last Answer : (d) Zero
Description : Goods which are perfect substitute of each other will have elasticity of substitution…... (a) Unity ; (b) Less than 1 ; (c) More than 1 ; (d) Infinite
Last Answer : ; (d) Infinite
Description : Goods which are perfect substitute of each other will have rate of substitution (a) Unity ; (b) Less than 1 ; (c) More than 1 ; (d) Zero
Last Answer : (a) Unity ;
Description : Given the supply quantity which is fixed an increase in aggregate demand will have direct impact on (a) Increase in GDP ; (b) Inflationary pressure ; (c) Greater employment opportunity; (d) More equitable distribution of income and wealth
Last Answer : (b) Inflationary pressure ;
Description : Which of these would lead to fall in demand for money? (a) Inflation ; (b) Increase in real income ; (c) Increase in real rate of interest ; (d) Increase in wealth
Last Answer : (c) Increase in real rate of interest ;
Description : Which of these affects the demand for money? (a) Real income ; (b) Price level ; (c) Rate of interest ; (d) All the three
Description : A goods can be considered a normal goods in economics if increase in disposal income of the consumer causes (a) An increase in demand ; (b) No change in demand ; (c) Decrease in demand ; (d) Less than proportionate change in demand
Last Answer : (a) An increase in demand ;
Description : A goods can be considered inferior goods in economics if increase in disposal income of the consumer causes (a) An increase in demand ; (b) No change in demand ; (c) Decrease in demand ; (d) Less than proportionate change in demand
Last Answer : ; (c) Decrease in demand ;
Description : The income elasticity of demand of normal goods is generally (a) >1 ; (b) < 1 ; (c) < 0 ; (d) > 0
Last Answer : ; (d) > 0
Description : The income elasticity of demand of inferior goods is generally (a) >1 ; (b) < 1 ; (c) < 0 ; (d) = 0
Last Answer : (c) < 0 ;
Description : If the disposal income of a household decreases by 10% and the demand for X commodity remains same. The income elasticity of X is (a) 0 ; (b) 0.5 ; (c) 0.5 ; (d) 2.5
Last Answer : (a) 0 ;
Description : If the disposal income of a household increases by 10% and the demand for X commodity increased by 10% the income elasticity of X is (a) 1.5 ; (b) 0.5 ; (c) 1.5 ; (d) 1.0
Last Answer : (d) 1.0
Description : If the disposal income of a household increases by 10% and the demand for X commodity increased by 25%. The income elasticity of X is (a) 1.5 ; (b) -0.5 ; (c) 2.5 ; (d) -2.5
Last Answer : ; (c) 2.5 ;
Description : If the disposal income of a household increases by 10% and the demand for bread falls by 5%. The income elasticity of bread is (a) 0.5 ; (b) -0.5 ; (c) 1.0 ; (d) -1.0
Last Answer : (b) -0.5 ;
Description : Omlet and cakes have (a) Negative cross price elasticity of demand ; (b) Positive cross elasticity of demand; (c) Positive income elasticity of demand ; (d) Negative income elasticity of demand
Last Answer : (b) Positive cross elasticity of demand;
Description : Bread and butter have……….. (a) Negative cross price elasticity of demand ; (b) Positive cross elasticity of demand (c) Positive income elasticity of demand ; (d) Negative income elasticity of demand
Last Answer : (a) Negative cross price elasticity of demand ;
Description : The measurement of sensitivity of quantity demand to change in price is calle(d) (a) Price elasticity ; (b) Income elasticity ; (c) Expansion in demand ; (d) None
Last Answer : (a) Price elasticity
Description : Consumption demand does not depend upon the level of (a) Income ; (b) Propensity to consume ; (c) Consumer spending ; (d) Marginal efficiency of investment.
Last Answer : (d) Marginal efficiency of investment.
Description : Unemployment that is caused by a mismatch between the composition of the labor force (in terms of skills, occupation, industries, or geographic location) and the make-up of the demand for ... unemployment ; (b) Deficient-demand unemployment ; (c) Frictional unemployment ; (d) Structural Unemployment
Last Answer : (d) Structural Unemployment
Description : Change in price of the goods cause (a) Change in quantity demanded ; (b) Shift in demand curve ; (c) Change in price; (d) No effect on quantity demanded
Last Answer : (a) Change in quantity demanded ;
Description : Change in consumers tastes and preference causes – of the particular goods (a) Change in quantity demanded ; (b) Shift in demand curve ; (c) Change in price ; (d) No effect on quantity demanded
Last Answer : (b) Shift in demand curve ;
Description : According to monetary approach of Balance of Payments, the demand for money is a stable function of (a) income, prices and rate of interest (b) income and prices (c) prices and rate of interest (d) income, prices and foreign exchange reserves
Last Answer : income, prices and rate of interest
Description : Economics cannot be given the status of science because (a) Of non-uniformity of opinion and approach of economist; (b) Economic behaviour of human being is unpredictable; (c) Measuring rod of money is unstable ; (d) All the three
Description : If supply and demand both shift outward, but demand shifts outward more than supply, the equilibrium price (a) will increase and quantity will increase ; (b) will increase and quantity will decrease; (c) will decrease and quantity will decrease ; (d) will decrease and quantity will increase
Last Answer : (a) will increase and quantity will increase ;
Description : Which of the following faces a downward sloping demand curve (a) Firm in a competitive market ; (b) Firm in a monopoly market ; (c) Both ; (d) None
Last Answer : (b) Firm in a monopoly market ;
Description : A desire culminates into demand or effective desire only when it is backed by (a) Purchasing power ; (b) Willingness of spend money ; (c) Both ; (d) None
Description : If demand of coffee increases by 10% with 20% decline in the price of sugar we can say that (a) Cross price elasticity of demand is negative and both the products are complementary to each other ... price elasticity is positive and the products are complementary to each other ; (d) None of these
Last Answer : (a) Cross price elasticity of demand is negative and both the products are complementary to each other;
Description : If both the disposal income as well as number of suppliers of a product rises, the equilibrium (a) Price remain same ; (b) Price will go up ; (c) Quantity will go up ; (d) Quantity will go down
Last Answer : (c) Quantity will go up ;
Description : In addition to three Central problem of economy, the additional problem(s) raised by the Modern economists is / are (a) Are the resources fully utilized or not ; (b) How efficient is the production and ... (c) Whether the capacity to produce or grow is increasing or is static ; (d) All the three
Description : An improvement in technology would shift (a) the demand curve inward ; (b) the demand curve outward ; (c) the supply curve inward (d) the supply curve outward
Last Answer : (d) the supply curve outward
Description : The price of Ford automobiles increases and the price of Chevrolets remains constant, the demand for Chevrolets will (a) increase ; (b) decrease ; (c) decrease then increase ; (d) increase then decrease
Last Answer : (a) increase ;
Description : A typical demand curve will normally have a (a) positive slope ; (b) horizontal slope ;(c) vertical slope ; (d) negative slope
Last Answer : (d) negative slope
Description : At a given time and in a given marketplace, the entire market demand curve indicates the (a) quantity of a good consumers would be willing and able to purchase at a given price. (b) quantity of a ... a given price (d) quantity of a good consumers have purchased at a series of prices over the year.
Last Answer : (b) quantity of a good consumers would be able to purchase at a series of prices.
Description : Cost push inflation arises due to (a) Persistent rise in factor cost ; (b) Mismatch between demand and supply of commodities (c) Combine phenomena of demand pull and cost-push inflation. ; (d) Increase in price of precious metal
Last Answer : (a) Persistent rise in factor cost ;
Description : Demand pull inflation rises due to (a) Persistent rise in factor cost ; (b) Mismatch between demand and supply of commodities (c) Combine phenomena of demand pull and cost-push inflation. ; (d) Increase in Price of precious metal
Last Answer : ; (b) Mismatch between demand and supply of commodities
Description : If someone keeps some money for bad days, this demand for money is known by ……. motive of money (a) Speculative ; (b) Transaction ; (c) Precautionary ; (d) Store
Last Answer : (c) Precautionary ;