Economics MCQs

Page No. 346

An increase in income should ?


aShift demand for an inferior product outward


b shift demand for an inferior product inward


cshift supply for an inferior product outward


dShift supply for an inferior product inward



According to the law of diminishing utility ?


aUtility is at a maximum with the first unit


b Increasing units of consumption increase the marginal utility


cMarginal product will fall as more units are consumed


dTotal utility will rise at a falling rate as more units are consumed



A fall in price ?


aWill cause an inward shift of demand


bWill cause an outward shift of supply


c May be caused by a fall in demand


d Leads to a higher level of production



When the market operates without interference, price increases will distribute what is available to those who are willing and able to pay the most. This process is known as ?


a Quantity setting


b price fixing


cprice rationing


dquantity adjustment.


View Answer price rationing

If the cross-price elasticity of demand between two goods is negative, then the two goods are ?


anormal goods


b unrelated goods


cSubstitutes.


dComplements


View Answer Complements

The price of burgers increase by 22% and the quantity of burgers demanded falls by 25% This indicates that demand for burgers is ?


aelastic


bperfectly elastic


cunitarily elastic


d inelastic.


View Answer elastic

The price of apples falls by 5% and quantity demanded increases by 6% This means that demand is ?


azero elastic


belastic


cperfectly elastic


dinelastic


View Answer elastic

A movement along the demand curve to the left may be caused by ?


aa decrease in supply.


ba rise in income


ca fall in the number of substitute goods


da rise in the price of inputs


View Answer a decrease in supply.

An increase in aggregate demand if aggregate supply is totally inelastic will ?


aincrease price but not output


b increase output but not price


cincrease output and price


d decrease output and price



When excess demand occurs in an unregulated market, there is a tendency for ?


aprice to fall


b quantity supplied to decrease.


c price to rise


d quantity demanded to increase


View Answer price to rise

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