11.
Irrespective of price, Sofia always spends Rs. 100 a week on ice cream, we conclude that:
A.
Elasticity of demand is 0
B.
Elasticity of demand is 1
C.
Elasticity of demand is infinite
D.
The law of demand has been violated
Answer: Option B
Explanation:
12.
When cross elasticity of demand is a large positive number, one can conclude that:
A.
The good is normal
B.
The good is inferior
C.
The good is a substitute
D.
The good is a complement
Answer: Option C
Explanation:
13.
If demand is inelastic, a change in the price:
A.
Will change the quantity in same direction
B.
Will change total revenue in same direction
C.
Will change total revenue in the opposite direction
D.
Will not change quantity
Answer: Option B
Explanation:
14.
Which one is the assumption of law of demand?
A.
Price of the commodity should not change
B.
Quantity demanded should not change
C.
Prices of substitutes should not change
D.
Demand curve must be linear
Answer: Option C
Explanation:
15.
Which of the following is a demand function?
A.
Q + 4P = 20
B.
Q = 35 + 3P
C.
Q - 2P - 15 = 0
D.
5P - Q = 4
Answer: Option A
Explanation:
16.
Zubair has a special taste for college canteen is hotdogs. The owner of the canteen doubles the prices of hotdogs. Zubair did not respond to the increase in prices and kept on demanding the same quantity of hotdogs. His demand for hotdogs is:
A.
Perfectly elastic
B.
Perfectly inelastic
C.
Elastic
D.
Less elastic
Answer: Option B
Explanation:
17.
Price and demand are positively correlated in case of:
A.
Necessities
B.
Comforts
C.
Giffen goods
D.
Luxuries
Answer: Option C
Explanation:
18.
The elasticity of demand of durable goods is:
A.
Less than unity
B.
Greater than unity
C.
Equal to unity
D.
Zero
Answer: Option B
Explanation:
19.
The elasticity of demand of durable goods is:
A.
More elastic
B.
Less elastic
C.
Zero elastic
D.
Infinite elastic
Answer: Option A
Explanation:
20.
Mr. Raees Ahmad bought 50 litres of petrol when his monthly income was Rs. 25,000. Now his monthly income has risen to Rs. 50,000 and he purchases 100 litre of petrol. His income elasticity of demand for petrol is:
A.
1
B.
100%
C.
Less than one
D.
More than one
Answer: Option A
Explanation:
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