2018

1. Which of the following factor has a direct

relationship with supply, other things remaining
constant?
A. Material Quality B. Substitute material
C. Material abundance D. Material price
Ans: D
2. The quantity of demand by virtue of which it
changes (increases or decreases) when ______
changes (decreases or increases) is called
Elasticity of Demand.
A. Marginal utility B. Output
C. Desire D. Price
Ans: D
3. The demand curve normally has a _______
slope.
A. Positive B. Zero
C. Undefined D. Negative
Ans: D
4. Supply is said to be ______ when a given
percentage change in price leads to a larger
change in quantity supplied.
A. Unit elastic B. Inelastic
C. Elastic D. Perfectly Elastic
Ans: C
5. Goods whose demand varies inversely with
income are called _____ goods.
A. Inferior B. Superior
C. Normal D. Necessary
Ans: A
6. The law of ____ states that, other things
remaining the same, the quantity supplied of a
commodity is directly or positively related to its
price.
A. Demand B. Diminishing utility
C. Supply D. Diminishing returns
Ans: C
7. ______ have an income elasticity of demand of
between 0 and +1.
A. Inferior goods B. Normal goods
C. Giffen goods D. Luxury goods
Ans: B
8. _______ refers to the willingness and ability of
consumers to purchase a given quantity of a good
or service at a given point in time or over a period
in time.
A. Demand B. Estimation
C. Consumption D. Desire
Ans: A
9. When even a negligible fall in the price of the
commodity leads to an infinite extension in the
demand for it, it is called _______.
A. Less elastic demand B. Perfectly inelastic demand
C. Infinite elastic demand. D. Unit elastic demand
Ans: C
10. ________ products have a zero cross elasticity.
A. Unrelated B. Complementary
C. Substitute D. Rival
Ans: A

2017
Q A situation when demand curve shifts to the
right is described under the following situation:
1) extension in demand 2) increase in demand
3) contraction in demand 4) decrease in demand

Q Suppose the demand function for a commodity

is given as Q= 1000 – 10P where ‘Q’ denotes
quantity of demand and ‘P’ denotes price of the
commodity. The Point Price elasticity of
demand at price Rs 20 will be:
1) – 0.50 2) – 0.20 3) – 0.25 4) – 5
Correct Answer: – 0.25
Q “Supply creates its own demand” is a ______.
1) Pareto principle 2) Martian
3) Say’s law 4) Keynes law
Correct Answer: Say’s law
Q In the case of Veblen goods, demand curve will
slope:
1) Upwards 2) Downwards
3) Straight 4) Negative
Correct Answer: Upwards
Q Increase in the price of a competing product
will lead to:
1) contraction of supply 2) increase in supply
3) decrease in supply 4) extension of supply
Correct Answer: decrease in supply

Q Es< 1, when positively sloped supply curve

starts from ______.
1) x-axis 2) y-axis
3) the point of origin 4) None of these
Correct Answer: x-axis
Q Price elasticity of supply of a good is 2. By
what percentage should its price rise so that its
supply rises by 40 percent?
1) 20 2) 10
3) 50 4) 80
Correct Answer: 20
Q ______ refers to different possible quantities of
a commodity that the consumer is ready to buy at
different possible prices of that commodity.
1) desire 2) demand
3) quantity demanded 4) None of these
Correct Answer: demand