CSS :: Market Equilibrium
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1. |
A decrease in demand causes the equilibrium price to: |
A. |
Rise |
B. |
Fall |
C. |
Remain constant |
D. |
Indeterminate |
Answer: Option B
Explanation:
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2. |
When price is below equilibrium level, there will be: |
A. |
Surplus commodity in the market |
B. |
Shortage of commodity in the market |
C. |
Supply curve will shift |
D. |
Demand curve will shift |
Answer: Option B
Explanation:
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3. |
If equilibrium price rises but equilibrium quantity remains unchanged, the cause is: |
A. |
Supply and demand both increase equally |
B. |
Supply and demand both decrease equally |
C. |
Supply decreases and demand increases |
D. |
Supply increases and demand decreases |
Answer: Option C
Explanation:
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4. |
Price of a product is determined in a free market: |
A. |
By demand for the product |
B. |
By supply of the product |
C. |
By both demand and supply |
D. |
By the government |
Answer: Option C
Explanation:
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5. |
An increases in the price of mutton provides information which: |
A. |
Tells consumers to buy more mutton |
B. |
Tells consumers to buy more chicken |
C. |
Tells producers to produce more mutton |
D. |
Provides no information |
Answer: Option C
Explanation:
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6. |
In market equilibrium, supply is vertical line. The downward sloping demand curve shifts to the rights. Then: |
A. |
Price will fall |
B. |
Price remains same |
C. |
Price will rise |
D. |
Quantity rises |
Answer: Option C
Explanation:
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7. |
Equilibrium: |
A. |
Is a state that can never be achieved in economics |
B. |
Is an important idea for predicting economic changes |
C. |
Is a stable condition |
D. |
Is an unstable condition |
Answer: Option B
Explanation:
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8. |
Ten rupees is the equilibrium price for good X. If government fixes price at Rs. 5, there is: |
A. |
A shortage |
B. |
A surplus |
C. |
Excess supply |
D. |
Loss |
Answer: Option A
Explanation:
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9. |
A rise in supply and demand in equal proportion will result in: |
A. |
Increase in equilibrium price and decrease in equilibrium quantity |
B. |
Decrease in equilibrium price and increase in equilibrium quantity |
C. |
No change in equilibrium price and increase in equilibrium quantity |
D. |
Increase in equilibrium price and no change in equilibrium quantity |
Answer: Option C
Explanation:
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10. |
The price and sales of sugar both increase. What could be the cause of this? |
A. |
A decrease in the incomes of the consumers |
B. |
A decrease in the tax on sugar |
C. |
An increase in the wages of workers in the sugar industry |
D. |
An increase in the price of sugar substitutes |
Answer: Option D
Explanation:
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