Deck 17: Economics Questions on Demand and Supply

Question 1

The demand curve for Giffen's goods:

A)Vertical
B)Horizontal
C)Negative slope
D)Positive slope

Answer 1

Positive slope

Question 2

Income elasticity of demand for inferior goods is:

A)Negative
B)Positive
C)Zero
D)Unity

Answer 2

Negative

Question 3

The change in demand is due to the change in :

A)Income
B)Own price
C)Prices of related products
D)Expectations

Answer 3

Own price

Question 4

A market:

A)Necessarily refers to a meeting place between buyer and sellers
B)Does not necessarily refers to a meeting place between buyer and sellers
C)Extends over the entire country
D)Extends over a city

Question 5

A fall in the price of the commodity holding everything else constant results in:

A)Increase in demand
B)Decrease in demand
C)Increase in quantity demanded
D)Decrease in quantity demanded

Question 6

When both the price of a substitute and the price of complement of X rises, the demand for X:

A)Rises
B)Falls
C)Remains unchanged
D)All of the above is possible

Question 7

If the percentage increase in the quantity demanded of a commodity is smaller than the percentage fall in its price, the coefficient of price elasticity:

A)Greater than one
B)Equal to one
C)Smaller than one
D)Zero

Question 8

A fall in the price of the commodity whose demand curve is a rectangular hyperbola causes total expenditure on the commodity:

A)Increases
B)Decreases
C)Remains unchanged
D)None of the above

Question 9

An increase in the price of the commodity when demand is inelastic causes the total expenditure of consumers of the commodity to:

A)Increase
B)Decrease
C)Remains unchanged
D)Any of the above

Question 10

A negative income elasticity of demand for a commodity indicates that as income falls, the amount of the commodity purchased:

A)Rises
B)Falls
C)Remains unchanged
D)None of the above

Question 11

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:

A)Positive
B)Negative
C)Zero
D)One