Demand and Supply Mcqs Test 01 Preparation Online

1. Other things equal, if a good has more substitutes, its price elasticity of demand is?

A. Zero

B. Larger

C. Smaller

D. Unity

2. The following are causes of shift in demand EXCEPT the one?

A. Change in price

B. Change in prices of substitutes

C. change in income

D. Change in fashion

3. Price of a product falls by 10% and its demand rises by 30%. The elasticity of demand is?

A. 1/3

B. 30%

C. 10%

D. 3

4. If elasticity of demand is very low it shows that the commodity is?

A. Has little importance in total budget

B. (a) and (c) above

C. A luxury

D. A necessity

5. This is an assumption of law of demand?

A. Price of the commodity should not change

B. Quantity should not change

C. Supply should not change

D. Income of consumer should not change

6. If demand is unitary elastic, a 25% increases in price will result in?

A. 1% decrease in quantity demanded

B. No change in quantity demanded

C. 25% change in total revenue

D. 25% decrease in quantity demanded

7. Law of demand shows relation between?

A. Price and quantity of a commodity

B. Income and quantity demand

C. Income and price of commodity

D. Quantity demanded and quantity supplied

8. If quantity demanded is completely unresponsive to changes in price, demand is?

A. Unit elastic

B. Inelastic

C. Elastic

D. Perfectly inelastic

9. Normally a demand curve will have the shape?

A. Vertical

B. Downward sloping

C. Upward sloping

D. Horizontal

10. When demand is perfectly inelastic, an increase in price will result in?

A. No change in total revenue

B. An increase in total revenue

C. A decrease in total revenue

D. A decrease in quantity demanded

Demand and Supply Mcqs Test 01 Preparation Online

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