CSS :: Demand and Supply

1.  Normally a demand curve will have the shape:
A. Horizontal B. Vertical
C. Downward sloping D. Upward sloping

2.  Law of demand shows relation between:
A. Income and price of commodity B. Price and quantity of a commodity
C. Income and quantity demand D. Quantity demanded and quantity supplied

3.  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

4.  If quantity demanded is completely unresponsive to changes in price, demand is:
A. Inelastic B. Unit elastic
C. Elastic D. Perfectly inelastic

5.  Other things equal, if a good has more substitutes, its price elasticity of demand is:
A. Larger B. Smaller
C. Zero D. Unity

6.  Price of a product falls by 10% and its demand rises by 30%. The elasticity of demand is:
A. 10% B. 30%
C. 3 D. 1?3

7.  If elasticity of demand is very low it shows that the commodity is:
A. A necessity B. A luxury
C. Has little importance in total budget D. (a) and (c) above

8.  The following are causes of shift in demand EXCEPT the one:
A. Change in income B. Change in price
C. Change in fashion D. Change in prices of substitutes

9.  When demand is perfectly inelastic, an increase in price will result in:
A. A decrease in total revenue B. An increase in total revenue
C. No change in total revenue D. A decrease in quantity demanded

10.  If demand is unitary elastic, a 25% increases in price will result in:
A. 25% change in total revenue B. No change in quantity demanded
C. 1% decrease in quantity demanded D. 25% decrease in quantity demanded

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