Economics MCQs

Page No. 345

An increase in the costs of production will ?


aShift demand outwards


bShift demand inwards


cShift supply outwards so more is supplied at each and every price, all other things unchanged


dShift supply inwards


View Answer Shift supply inwards

A supply curve that starts at the origin has ?


a A price elasticity of supply greater than one


b A price elasticity of supply equal to one


cA price elasticity of supply less than one


dA positive price elasticity of supply



If a 4% increase in price leads to a increase in the quantity supplied of 8% ?


a Supply is price elastic


b Supply is income elastic


c Price elasticity of demand is -2


dPrice elasticity of supply is -2



For a normal good ?


aThe price elasticity of demand is negative the income elasticity of demand is negative


bThe price elasticity of demand is positive the income elasticity of demand is negative


cThe price elasticity of demand is negative the income elasticity of demand is positive


dThe price elasticity of demand is positive; the income elasticity of demand is positive



if demand is price inelastic ?


aAn increase in price must raise profits


b An increase in price decrease revenue


cAn increase in price increase revenue


d A decrease in price reduces sales



The price elasticity of demand is a negative number this means ?


aDemand is price elastic


bDemand is price inelastic


cThe demand curve is downward sloping


dAn increase in income will reduce the quantity demanded



If the cross elasticity of demand is -2 ?


aThe products are substitutes and demand is cross price elastic


b The products are substitutes and demand is cross price inelastic


cThe products are complements and demand is cross price elastic


dThe products are complements and demand is cross price inelastic



The price decrease from Rs 2,000 to Rs 1,800 Quantity demanded per year increases 5000 to 6000 units. Which of the following is correct ?


aThe price elasticity of demand is -2


bThe good is inferior


cIncome elasticity is + 0.5


dIncome elasticity is + 2



If a product is an inferior good ?


aDemand is inversely related to income


b Demand in inversely related to price


c Demand is directly related to price


dDemand is inversely related to the price of substitutes



An increase in price all other things unchanged leads to ?


aShift demand outwards


bShift demand inwards


cA contractions of demand


dAn extension of demand



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