Basics Of Economics Set 3
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This set of Basics of Economics Multiple Choice Questions & Answers (MCQs) focuses on Basics Of Economics Set 3
Q1 | In drawing an individual demand curve for a commodity, all but whichof 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
Q2 | When an individual’s income rises, when everything else remains thesame, his demand for normal goods:
- rises
- falls
- remains the same
- any of the above is possible
Q3 | When an individual’s income falls, when everything else remains thesame, his demand for inferior goods:
- increases
- decreases
- remains unchanged
- cannot say
Q4 | When the price of the substitute commodity of X falls, the demand for X:
- rises
- falls
- remains unchanged
- all of the above is possible
Q5 | If the quantity demanded remains unchanged as the price of thecommodity falls, the coefficient of price elasticity of demand is:
- greater than
- one equal to one
- smaller than one
- zero
Q6 | If the income elasticity of demand is greater than one, then thecommodity is:
- necessity
- luxury
- inferior
- non-related commodity
Q7 | Which of the following is an exception to the law of demand?
- giffen good
- normal good
- superior good
- all of the above
Q8 | The law of diminishing marginal utility was popularized by:
- keynes
- marshall
- smith
- samuelson
Q9 | 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
Q10 | Cross elasticity of demand in the case of substitutes:
- zero
- negative
- positive
- infinity
Q11 | If a small change in price leads to infinitely large change in quantitydemanded, then the demand is:
- perfectly elastic
- perfectly inelastic
- elastic
- inelastic
Q12 | Net addition to total utility when one more unit is consumed is:
- au
- mu
- mc
- tu
Q13 | Most important determinant of demand is :
- income
- wealth
- price
- advertisement
Q14 | Which of the following is the reason for law of demand:
- price effect
- backlash effect
- income effect
- real balance effect
Q15 | Net addition to total cost is called:
- marginal cost
- average cost
- fixed cost
- variable cost
Q16 | The market equilibrium for a commodity is determined by :
- market demand
- market supply
- balancing of the forces of demand and supply
- any of the above
Q17 | When there are only few sellers of the commodity, the market is called:
- monopoly
- duopoly
- oligopoly
- monopsony
Q18 | If the supply curve of the commodity is having a positive slope, a rise inthe price of the commodity, results in:
- increase in supply
- increase in quantity supplied
- decrease in supply
- decrease in quantity supplied
Q19 | From the position of stable equilibrium, the market supply of a commoditydecreases, while the market demand remains unchanged, then:
- equilibrium price falls
- equilibrium quantity rises
- both equilibrium price and equilibrium quantity decreases
- equilibrium price rises, but equilibrium quantity falls
Q20 | Elasticity of supply for a positively sloped straight line supply curve thatintersects the price axis is:
- equal to zero
- equal to one
- greater than one
- constant
Q21 | In which of the following market, advertisement is absent:
- monopolistic competition
- perfect competition
- oligopoly
- none of the above
Q22 | -------------- cost can never become zero.
- variable cost
- fixed cost
- marginal cost
- average cost
Q23 | If a positively sloped linear supply curve crosses the quantity axis, theelasticity of supply is:
- inelastic
- elastic
- unitary elastic
- perfectly elastic
Q24 | If a positively sloped linear supply curve passes through the origin, theelasticity of supply is
- inelastic
- elastic
- unitary elastic
- perfectly elastic
Q25 | Average cost is the sum of AVC and
- mc
- tc
- afc
- atc