Managerial Economics 1 Set 7

Bachelor of Business Administration (BBA)

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This set of Managerial Economics 1 Multiple Choice Questions & Answers (MCQs) focuses on Managerial Economics 1 Set 7

Q1 | In the case of …………… Consumer may moves to higher or lower demand curve
  • Extension of demand
  • Contraction of demand
  • Shift in demand
  • Slopes in demand
Answer: Shift in demand
Q2 | Higher the price of certain luxurious articles, higher will be the demand, this concept is called
  • Giffen effects
  • Veblen effects
  • Demonstration effects
  • Both b & c above
Answer: Veblen effects
Q3 | Demand for milk, sugar, tea for making tea, is an example of
  • Composite demand
  • Derivative demand
  • Joint demand
  • Direct demand
Answer: Joint demand
Q4 | Demand for electricity is an example of
  • Composite demand
  • Derivative demand
  • Joint demand
  • Direct demand
Answer: Composite demand
Q5 | Demand for tyres depends on demand of vehicles, the demand for tyres called as
  • Composite demand
  • Derivative demand
  • Joint demand
  • Direct demand
Answer: Derivative demand
Q6 | Determinants of demand includes
  • Price of a commodity
  • Nature of commodity
  • Income and wealth of consumer
  • All the above
Answer: All the above
Q7 | Exceptional Demand Curve (Perverse demand curve)
  • Moving upward from left to right
  • Moving upward from right to left
  • Moving horizontally
  • Moving vertically
Answer: Moving upward from left to right
Q8 | Which of the following is not an exception to the downward sloping of demand curve
  • Giffen paradox
  • Veblen effects
  • Necessaries
  • Income effect
Answer: Income effect
Q9 | The concept of Elasticity of Demand was introduced by
  • Alfred Marshall
  • Lionel Robbins
  • Adam smith
  • J M Keynes
Answer: Alfred Marshall
Q10 | Price Elasticity of demand =
  • Proportionate change in quantity demanded Proportionate change in price
  • Change in Quantity demanded / Quantity demanded Change in Price/price
  • ( Q2‐Q1)/Q1 (P2‐P1) /P1
  • All the above
Answer: All the above
Q11 | When a small change in price leads to infinite change in quantity demanded, it is called
  • Perfectly elastic demand
  • Perfectly inelastic demand
  • Relative elastic demand
  • Relative inelastic demand
Answer: Perfectly elastic demand
Q12 | Quantity remains the same whatever the change in price, this is the case of
  • Perfectly elastic demand
  • Perfectly inelastic demand
  • Relative elastic demand
  • Relative inelastic demand
Answer: Perfectly inelastic demand
Q13 | In the case of ………… a small change in price leads to very big change in quantity demanded
  • Perfectly elastic demand
  • Perfectly inelastic demand
  • Relative elastic demand
  • Unit elastic demand
Answer: Relative elastic demand
Q14 | In case of …….. quantity demanded changes less than proportionate to changes in price
  • Perfectly elastic demand
  • Perfectly inelastic demand
  • Relative elastic demand
  • Relative inelastic demand
Answer: Relative inelastic demand
Q15 | When the change in demand is exactly equal to the change in price, it is called
  • Perfectly elastic demand
  • Perfectly inelastic demand
  • Relative elastic demand
  • Unitary elastic demand
Answer: Unitary elastic demand
Q16 | Ep = 0 in the case of ‐‐‐‐‐‐‐‐‐‐‐elasticity
  • Perfectly elastic demand
  • Perfectly inelastic demand
  • Relative elastic demand
  • Unitary elastic demand
Answer: Perfectly inelastic demand
Q17 | Perfect elasticity is known as
  • Finite elastic
  • Infinite elastic
  • Unitary elastic
  • Zero elastic
Answer: Infinite elastic
Q18 | in the case of perfect inelasticity, the demand curve is
  • Vertical
  • Horizontal
  • Flat
  • Steep
Answer: Vertical
Q19 | EP =………….in the case of relatively elastic demand
  • 1
  • >1
  • <1
Answer: >1
Q20 | EP = ………in case of relatively inelastic demand
  • 0
  • Infinite
  • 1
  • <1
Answer: <1
Q21 | In the case of unitary elastic demand, the shape of demand curve is
  • Vertical line
  • Horizontal line
  • Rectangular hyperbola
  • Steep
Answer: Rectangular hyperbola
Q22 | Unitary elasticity of demand mean
  • EP =>1
  • EP =<1
  • EP = o
  • EP = 1
Answer: EP = 1
Q23 | ……… shows the change in quantity demanded as a result of a change in consumers’ income
  • Price elasticity
  • Cross elasticity
  • Income elasticity
  • None of these
Answer: Income elasticity
Q24 | For the commodities like salt, sugar etc.,the income elasticity will be
  • Zero
  • Negative
  • Positive
  • Unitary
Answer: Zero
Q25 | when income increases, quantity demanded falls, it is
  • Positive income elasticity
  • Zero income elasticity
  • Negative income elasticity
  • Unitary income elasticity
Answer: Negative income elasticity
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