Economics MCQs

Page No. 345

An increase in the costs of production will ?


aShift demand outwards

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bShift demand inwards

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

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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

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b A price elasticity of supply equal to one

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cA price elasticity of supply less than one

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dA positive price elasticity of supply

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


a Supply is price elastic

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b Supply is income elastic

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c Price elasticity of demand is -2

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dPrice elasticity of supply is -2

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For a normal good ?


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

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

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

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

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if demand is price inelastic ?


aAn increase in price must raise profits

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b An increase in price decrease revenue

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cAn increase in price increase revenue

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d A decrease in price reduces sales

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


aDemand is price elastic

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bDemand is price inelastic

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cThe demand curve is downward sloping

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dAn increase in income will reduce the quantity demanded

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If the cross elasticity of demand is -2 ?


aThe products are substitutes and demand is cross price elastic

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b The products are substitutes and demand is cross price inelastic

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cThe products are complements and demand is cross price elastic

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dThe products are complements and demand is cross price inelastic

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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

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bThe good is inferior

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cIncome elasticity is + 0.5

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dIncome elasticity is + 2

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If a product is an inferior good ?


aDemand is inversely related to income

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b Demand in inversely related to price

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c Demand is directly related to price

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dDemand is inversely related to the price of substitutes

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An increase in price all other things unchanged leads to ?


aShift demand outwards

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bShift demand inwards

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cA contractions of demand

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dAn extension of demand

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