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Economics cseet mcqs part 1

1. Contraction of demand is the result of:

(a) Decrease in the number of consumers.

(b) Increase in the price of the good concerned.

(c) Increase in the prices of other goods.

(d) Decrease in the income of purchases.

2. Identify the coefficient of price-elasticity of demand when the percentage increase in the quantity of a good demanded is smaller than the percentage fall in its price :

(a) Equal to one

(b) Greater than one

(c) Smaller than one

(d) Zero

3. In the case of an inferior goods, the income elasticity of demand is ;

(a) Positive

(b) Zero

(c) Negative

(d) Infinite

4. If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the goods to :

(a) Remain the same

(b) Increase

(c) Decrease

(d) Any of these

5. The law of demand is :

(a) A quantitative statement

(b) Qualitative statement

(c) Both a quantitative and a qualitative statement

(d) Neither a quantitative nor a qualitative statement

6. All of the following are determinants of demand except:

(a) Tastes and preferences

(b) Quantity supplied

(c) Income

(d) Price of related goods

7. .................. goods are those goods which are consumed together simultaneously.

(a) Competing goods

(b) Complementary goods

(c) Inferior goods

(d) Superior goods

8. Larger the size of the population of a country or region, ------------- is the demand forcommodities.

(a) Lesser

(b) Greater

(c) Same

(d) No effect

9. Demand can be defined as :

(a) Desire to buy

(b) Ability to pay

(c) Willingness to buy

(d) Desire and willingness to buy backed by adequate purchasing power .............

10. Movement along the demand curve is due to the following reason :

(a) Change in the price of substitute goods

(b) Change in the price of the commodity

(c) Improvement in technology

(d) Both “a” and “c”

11. If two goods are perfect substitute for each other, cross elasticity is ..............

(a) Negative

(b) Positive

(c) Not defined

(d) None of the above

12. Demand remains constant, decrease in supply means .......... in equilibrium price.

(a) Falls

(b) Rise

(c) Both (a) and (b)

(d) None of the above

13. A vertical supply curve parallel to the Y-axis implies that the elasticity of supply is :

(a) Zero

(b) Infinite

(c) Equal to 1

(d) Greater than 0 but less than 1

14. Total expenditure method of measuring elasticity was formulated by -

(a) Alfred Marshall

(b) Hicks and Allen

(c) Ragnes Frisch

(d) Paul A Samuelson

15. For luxuries, the elasticity is .................

(a) Less than 1

(b) Equal to 1

(c) More than 1

(d) Zero

16. Supply Curve is ................. sloped, in direction from ................. .

'(a) Positively, upward to right

(b) Positively, downward negatively sloped

(c) Negatively, downward to left

(d) Negatively, left to right.

17. Which one of these is not an exception to the law of supply.

(a) Competition

(b) Monopoly

(c) Change in fashion

(d) Perishable goods

18. Excess supply of a commodity will cause ................. in its price.

(a) Rise

(b) Consistency

(c) No effect

(d) Fall

19. In ................. , small change in price causes a greater change in quantity demanded

(a) Relatively elastic demand

(b) Perfectly elastic demand

(c) Unitary elastic demand

(d) None of the above

20. If the price for laptops increases, and relatively the demand for tablets increases then,

laptops and tablets are

(a) Ceteris Paribus products

(b) Independent products

(c) Substitute products

(d) Complementary products

21. Necessities are price ................. while luxury goods are ................. .

(a) Unitary, Inelastic

(b) Elastic, Unitary

(c) Elastic, Inelastic

(d) Inelastic, Elastic.

22. Goods for which demand rises when the price increases and demand falls when price decreases

(a) Giffen goods

(b) Normal goods

(c) Superior goods

(d) Inferior goods

23. Under law of demand

(a) Price of commodity is an independent variable

(b) Quantity demanded is dependent variable

(c) Reciprocal relationship is found between price and quantity demanded

(d) All of the above

24. A horizontal supply curve parallel to the quantity axis implies that the elasticity of supply is :

(a) Zero

(b) Infinite

(c) Equal to one

(d) Greater than zero but less than one

25. A typical demand curve cannot be :

(a) Concave from below

(b) Convex from below

(c) Rising upward to right

(d) A straight line

1 (b) 2 (c) 3 (c) 4 (b) 5 (b) 6 (b)

7 (b) 8 (b) 9 (d) 10 (b) 11 (b) 12 (b)

13 (a) 14 (a) 15 (c) 16 (a) 17 (c) 18 (d)

19 (a) 20 (d) 21 (d) 22 (a) 23 (d) 24 (b)

25 (c)

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