General Economics 1 Set 3
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This set of General Economics 1 Multiple Choice Questions & Answers (MCQs) focuses on General Economics 1 Set 3
Q1 | Other things remaining the same, the quantity of a product demanded increases with ------------ in price.
- Increase
- Decrease
- Variation
- None of the above
Q2 | When total utility is maximum, marginal utility is:
- Maximum
- One
- Zero
- Infinite
Q3 | For complementary goods, the cross elasticity of demand:
- Positive
- Negative
- Zero
- None
Q4 | Relation between price of a commodity and demand for another commodity is measured by:
- Price elasticity
- Income elasticity
- Cross elasticity
- Elasticity of substitution
Q5 | When TU falls, MU is:
- Rises
- Zero
- Positive
- Negative
Q6 | Demand varies ------------- with price.
- Directly
- Positively
- Inversely
- None of the above
Q7 | When Q = f (P), the elasticity coefficient is measured by:
- ∆Q/∆P / P/Q
- ∆P/∆Q * Q/P
- ∆Q/∆P * P/Q
- ∆P/∆Q / Q/P
Q8 | Income elasticity of demand for inferior good is:
- Negative
- Positive
- Zero
- Unity
Q9 | In the case of luxury goods, the income elasticity of demand will be:
- Less than unity
- Unity
- More than unity
- All the above
Q10 | Income elasticity is positive, but less than unity in the case of:
- Necessity
- Luxury
- Inferior
- Substitutes
Q11 | In drawing an individual demand curve for a commodity, all but which of the following are kept constant:
- Individual’s money income
- The prices of the related commodity
- Price of the commodity under consideration
- Tastes of the consumer
Q12 | When an individual’s income rises, when everything else remains the same, his demand for normal goods:
- Rises
- Falls
- Remains the same
- Any of the above is possible
Q13 | When an individual’s income falls, when everything else remains the same, his demand for inferior goods:
- Increases
- Decreases
- Remains unchanged
- Cannot say
Q14 | When the price of the substitute commodity of X falls, the demand for X:
- Rises
- Falls
- Remains unchanged
- All of the above is possible
Q15 | If the quantity demanded remains unchanged as the price of the commodity falls, the coefficient of price elasticity of demand is:
- Greater than
- one Equal to one
- Smaller than one
- Zero
Q16 | If the income elasticity of demand is greater than one, then the commodity is:
- Necessity
- Luxury
- Inferior
- Non-related commodity
Q17 | If the amount of the commodity purchased remains unchanged when the price of another commodity changes, the cross elasticity of demand between them will be:
- Positive
- Negative
- Zero
- One
Q18 | Which of the following is an exception to the law of demand?
- Giffen good
- Normal good
- Superior good
- All of the above
Q19 | The law of diminishing marginal utility was popularized by:
- Keynes
- Marshall
- Smith
- Samuelson
Q20 | If the income elasticity of demand for a commodity is found to be 0.4, then the commodity concerned is:
- Luxury
- Necessity
- Giffen’s goods
- Independent good
Q21 | Cross elasticity of demand in the case of substitutes:
- Zero
- Negative
- Positive
- Infinity
Q22 | If a small change in price leads to infinitely large change in quantity demanded, then the demand is:
- Perfectly elastic
- Perfectly inelastic
- Elastic
- Inelastic
Q23 | Net addition to total utility when one more unit is consumed is:
- AU
- MU
- MC
- TU
Q24 | Most important determinant of demand is :
- Income
- Wealth
- Price
- Advertisement
Q25 | Which of the following is the reason for law of demand:
- Price effect
- Backlash effect
- Income effect
- Real balance effect