Demand and Supply-4

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109. Seawater, fresh air etc are regarded in economics as–
(A) Giffen goods
(B) Inferior goods
(C) Free goods
D) Normal goods
Ans. (C)

110. If the price of tea falls, demand for coffee will–
(A) Increase
(B) Decrease
(C) Remain same
D) None of these
Ans. (B)

111. If the main objective of the government is to raise revenue, it should tax commodities with–
(A) High elasticity of demand
(B) Low elasticity of supply
(C) Low elasticity of demand
(D) High income elasticity of demand
Ans. (C)

112. Bread and butter, car and petrol are Examples of goods which have–
(A) Composite demand
(B) Joint demand
(C) Derived demand
(D) Autonomous demand
Ans. (B)

113. In the law of demand, the statement “Other things remain constant” means–
(A) Income of consumer should not change
(B) Price of other goods should not change
(C) Taste of consumer should not change
(D) All of the above
Ans. (D)

114. The functional relationship between income and consumption expenditure is explained by-
(A) Consumer surplus
(B) Law of demand
(C) Law of supply
(D) Keynes’s psychological law of consumption
Ans. (D)

115. According to Keynesian theory of income determination, at full employment a fall in aggregate demand causes–
(A) A fall in prices of output and resources
(B) A fall in real gross National product and employment
(C) A rise in real gross National product and investment
(D) A rise in prices of output and resources
Ans. (A)

116. If the price of an inferior good falls its demand–
(A) Rises
(B) Falls
(C) Remains constant
D) Can be any of the above
Ans. (A)

117. Demand of commodity mainly depends upon–
(A) Purchasing will
(B) Purchasing power
(C) Tax policy
(D) Advertisement
Ans. (B)

118. When there is a change in demand leading to a shift of the demand curve to the right at the same price as before, the quantity demanded will–
(A) Decrease
(B) Increase
(C) Remain the same
(D) Contract
Ans. (B)

119. Movement along the same demand curve is known as–
(A) Extension and contraction of demand
(B) Increase and decrease of demand
(C) Contraction of supply
(D) Increase of supply
Ans. (A)
120. The income elasticity of demand being greater than one, the commodity must be–
(A) A necessity
(B) A luxury
(C) An inferior good
(D) None of the above
Ans. (B)

121. If the change in demand for a commodity is at a faster rate than change in the price of the commodity, the demand is–
(A) Perfectly inelastic
(B) Elastic
(C) Perfectly elastic
(D) Inelastic
Ans. (B)

122. The demand for which of the following commodity will not rise in spite of a fall in its price?
(A) Television
(B) Refrigerator
(C) Salt
(D) Meat
Ans. (C)

123. If the price of Pepsi decreases relative to the price of Coke and 7-Up, the demand for–
(A) Coke will decrease
(B) 7-Up will decrease
(C) Coke and 7-Up will increase
(D) Coke and 7-Up will decrease
Ans. (D)

124. Which one of the following is an Example of joint supply?
(A) Petrol and Bus
(B) Ink and Fountain pen
(C) Sugar and Coffee
(D) Wool and Cotton
Ans. (B)

125. A refrigerator operating in a chemist’s shop is an xample of–
(A) Free good
(B) Final good
(C) Producer’s good
(D) Consumer’s good
Ans. (B)

126. Which among of the following is necessary for demand.
(A) Production
(B) Cost
(C) Income
(D) Import
Ans (C)

127. In which of the following case, law of demand fails?
(A) Giffen goods
(B) Normal goods
(C) Inferior goods
(D) Both Giffen and Inferior goods
Ans. (A)

128. The ________ curve represents the demand of all consumers in the market taken together at different levels of the price of the good.
(A) Monotonic
(B) Indifferent
(C) Market demand
(D) Diminishing
Ans. (C)

129. Who gave the ‘General Equilibrium Theory’?
(A) J. M. Keynes
(B) Leon Walras
(C) David Ricardo
D) Adam Smith
Ans. (B)

130. In a market system, the central problems regarding how much and what to produce are solved through thecoordination of economic activities brought about by ________ signals.
(A) Supply
(B) Demand
(C) Price
(D) Stock Market
Ans. (C)

131. The demand for a normal good increases with ________ in the consumer’s income.
(A) Increase
(B) Decrease
(C) Constant
(D) Double
Ans. (A)

132. The demand for a inferior good increases with ________ in the consumer’s income.
(A) Increase
(B) Decrease
(C) Constant
(D) Double
Ans. (B)

133. Demand curve will shift forward, when ______.
(A) Price of complementary good falls
(B) Price of substitute goods decreases
(C) Income of the consumer falls
(D) Price of complement good increases
Ans. (A)

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