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1. |
Normally a demand curve will have the shape: |
A. |
Horizontal |
B. |
Vertical |
C. |
Downward sloping |
D. |
Upward sloping |
Answer: Option C
Explanation:
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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 |
Answer: Option B
Explanation:
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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 |
Answer: Option D
Explanation:
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4. |
If quantity demanded is completely unresponsive to changes in price, demand is: |
A. |
Inelastic |
B. |
Unit elastic |
C. |
Elastic |
D. |
Perfectly inelastic |
Answer: Option D
Explanation:
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5. |
Other things equal, if a good has more substitutes, its price elasticity of demand is: |
Answer: Option A
Explanation:
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6. |
Price of a product falls by 10% and its demand rises by 30%. The elasticity of demand is: |
Answer: Option C
Explanation:
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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 |
Answer: Option A
Explanation:
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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 |
Answer: Option B
Explanation:
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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 |
Answer: Option B
Explanation:
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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 |
Answer: Option D
Explanation:
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