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61.

If the demand for a commodity is inelastic, an increase in its price will cause the total expenditure of the consumers of the commodity to:

A.	Remain the same	B.	Increase
C.	Decrease	D.	Any of the above

62.

If regardless of changes in its price, the quantity demanded of a commodity remains unchanged, then the demand curve for the commodity will be:

A.	Horizontal	B.	Vertical
C.	Positively sloped	D.	Negatively sloped

63.

In the case of a Giffen good, the demand curve will be:

A.	Horizontal	B.	Downward-slping to the right
C.	Backward falling to the left	D.	Upward-slopping to the right

64.

The budget-line is also known as the:

A.	Iso-utility curve	B.	Production possibility line
C.	Isoquant	D.	Consumption possibility line

65.

Which one is not a assumption of the theory of demand based on analysis of indifference curves?

A.	Given scale of preferences as between different combinations of two goods	B.	Diminishing marginal rate of substitution
C.	Constant marginal utility of money	D.	Consumers would always prefer more of a particular good to less of it, other things remaining the same

66.

The elasticity of substitution between two perfect substitutions is:

A.	Zero	B.	Greater than zero
C.	Less than infinity	D.	Infinity

67.

The consumer is in equilibrium at a point where the budget line:

A.	Is above an indifference curve	B.	Is below an indifference curve
C.	Is tangent to an indifference curve	D.	Cuts an indifference curve

68.

An indifference curve slopes down towards right since more of one commodity and less of another result in:

A.	Same satisfaction	B.	Greater satisfaction
C.	Maximum satisfaction	D.	Decreasing Expenditure

69.

The Revealed Preference Theory deduces the inverse price-quantity relationship from:

A.	Assumption of indifference	B.	Postulate of utility maximization
C.	Observed behaviour of the consumer	D.	Introspection

70.

Which of the following statements is incorrect?

A.	An indifference curve must be downward sloping to the right	B.	Convexity of a curve implies that the slope of the curve diminishes as one moves from left to right
C.	The elasticity of substitution between two goods to a consumer is zero	D.	The total effect of a change in the price of a good on its quantity demanded is called the price effect