Multiple Choice Questions (MCQs) 1. Which of the following is an example of complementary goods? {b) Coke and Pepsi (a) Tea and Coffee (c) Rice and Wheat (d) None of these 2. The demand for normal good with an increase in income of the consumer. (a) Increases (0) Decreases (c) Remains same (d) Either increases or decreases 3. Increase in price of substitute good leads to: (b) Increase in Demand (a) Expansion in Demand (d) Contraction in demand (c) Decrease in Demand A, Band Care three commodities, where A and B are complementary; whereas A and C are substitutes > With increase in price of commodity A: (a) Demand of all the commodities A, B and C will fall{p) Demand of commodities A and B wil fll, whereas demand of C will ise {c) Demand of commodities A and C wil fal, whereas demand of B wil rise (6) Demand of commodities B and C wilfal, whereas demand of A wil rise 5. When two or more goods are demanded simultaneously, itis known as: (a) Joint Demand (b) Alternate Demand {@) Dect Demand (a) Composite Demand 6, There willbe a_inthe demand curve of cars with an increase in the price of petrol: (a) Rightward Sit (b) Upward Movement {c) Leftward Shift (d) Downward Movement “The demand curve fo @ commodity is generally drawn on the assumption that: (a) Pics of subst. te goods do not change. fp) Tastes and preierences of he consumer remain the same. fo) Inoome ofthe consumer remains the same. (@) Allofthese ', Which one of these is not an example of substitute goods? (a) Teaand coffee (0) Coke and Pepsi {c) Inkpen and Ball pen (6) Bread and Butter 9, Law of Demand states the {elationship between price and quantity demanded. (a) Inverse (b) Positive {¢) Proportional (d) None of these 40, Expansion in demand leads to: {a) ightward Shitt in demand curve (0) Oownward Movement along the demand curve (c) Upward Movement along the demand curve (a) None of these +14. Which one of these is a determinant of Individual demand? (a) Size and composition of population (b) Season and weather {c) Distribution of Income (d) None of these 12, From the given demand schedule, determine the effect on demand curve: Price @) 20 20 Demand (Units) 100-70 2} Rightward Shit in demand curve (b) Leftward Shit in Demand curve (o) Upward Movement along the demand curve _{d) Downward Movement along the demand curve 13, Expansion in demand occurs due to: 2) Risen price ofthe given commaclty {(b) Fallin price ofthe given commodity (c) Rise nprice of substitute goods (a) Fallin price of complementary goods 4, There is @ sudden change in climatic conditions resulting in hot weather. Assuming no change in the price ofthe cold drinks, it will ead to: 12}, Upward movement along the same market demand curve 'b) Downward movement along the same market demand curve Rightward shit in the market demand curve (3) Leftward shiftin the market demand curve45. Amoverent along the demand curve for soft drinks is best described at = (a) Increase in demand (b) Decrease in demand fe). Change in quantity demanded () Change in demand 46. ltmore is demanded atthe same price or same quantity ata higher price this fact of demang as isk, {a}. Extension of demand ~ {e) Contraction of demand 17. Cross demand states the relationship between: ia) Demand of given commadiy and price of related goods. {b) Demand of given commodity and income of the consumer {c)_ Demand of given commodity and taste and preferences. (6) None of these. 118, Which ofthe folowing is not an assumption of aw of demand? (a). Pnce of substitute goods do not change {o) Income ofthe consumers remain same (ey There fs no change in tastes and preferences ofthe consumers {0} Price of he ven commodity does not change. 419. ifchange in price of good A atfects the demand for good B, then: (b) Aisa complement of good 8. a) Aisa substitute of good B. {c)_ Both (a) and (&) (d) Either (a) or (6) 120. ina typical demand schedule, quantity demanded: (a) Varies directly with price {o) Varies proportionately with price {c)_ Varies inversely ith price {¢) Isindependent of price. 21. Which ofthe following is a determinant of market demand? (a). Income of the consumers (b) Season and weather {e)_ Price of elated goods (¢) Allofthe above +22. Which ofthe folowing factors willead to leftward siftin the demand curve {a)_ Increase in income in case of inferior goods normal goods. (0) tnerease in demand (@) Decrease in demand (0). Increase in income in case of {c)_Inerease in Population (@) Expectation of future increase in price 123. Decrease in the price of the complementary goods lead {@)_Upward movement along the same demand curve {o), Downward movement long the same demand cue {c)_ Rightward shiftin he demand curve (@)_ Leftward shit in the demand curve ‘24, {price of good ses and itTeads to alin demand for good Ye the two goods are: {(p) Complementary goods Js to: (a) Substitute goods (e) Normal goods (6) Inferior goods 25. Market demand curve is obtained by. summation ofthe individual demand curves. (a) Vertical (©) Horizontal (c) Both (a) and (b) {@) Neither (a) nor (b) 26. Ceteris paribus means: a) Holding supply constant {o) Holding demand constant {) Other factors being constant fe) Price being constant7. An increase in real income of a consumor The demand function of a product X is gen as: Dx SEE Induces him to buy more of a commodity wrase prices (a) Inducement Effect fees creel (b) Substiution EMect (6) Uni Ett 3. Expansion of Demand is associated with: (a) Rise in Price, Rise in quantity demanded {b) Fallin Price, Fallin quantity demandod (6) Fallin Price, Rise in quantity demanded (¢), Fise in Price, Fallin quantity demanded . IX and ¥ are Comple-nentary Goods, then with increase in price of X (a), Demand of X w'. decrease and demand of wilnreace (b} Demand of x vi increase and demand of will dacrease, (6) Demand of X and wit increase. (6), Demand of X and wit decrease, Tea and Cotes are substutes, a alin th Inthe pics of Tea eads to: (i) Rise in the demand for Tea cara ¥) Faint domand of Tea ii) Fall in the demand for Coffee . F (iv) Rise in the demand of cottes {a}, Both ip and iv) (b) Both and a) (6) Both (i) ana (a) (6) Both i) and (iy |. All except one of the following are assumed to remain same while drawing an individual's demand curve for a product. Which one is it? (a) Tastes and Preferences of the individual (©) Monetary income (e) Price of the given product (8) Price of related goods With fallin price of a commodity, demand of the commodity incteasesas it becomes relatively cheaper in comparison to other commodities. Tis effect is known as: (a) Substitution Effect (} Income Etoct (c) Law of Demand (6) Law of Diminishing Returns '2-2Px, where Px stands forprice. The demand The demand function of a product X is given as: D at price of €2 willbe: @ 6 8 8 (a 10 The demand function ofa product Xis given as: x =20-3Px, where Pxstands for price. tan Individual Y has a demand of 8 units, then market price ofthe product is (a) 4 (@) 5 (©) 23 (a) 845 = 12-2Px, where Px stands for price. fthere are 5,000 customers forthe product, then market demand for the product at market price of 9 wil be: (a) 40,000 (b) 30,000 (c} 20,000 (@) 16000 Two commodities A and B can be inferred as close substitutes of each other i (a). Rison price of one leads o an increase in demand of other and vice-versa fo). Risen price of one leads o a decrease in demand of other and vicewersa() Fallin price of one lead to fll in demand of other one, but not the other way round (@}_ Rise in price of one lead to rise in demand of other one, but not the other way round ‘37. Agoods can be considered a normal good ian increase in income of the consumer causes _ in demand of the given good: — (2) Increase (b) No change (6) Decrease (6) less than proportionate increase ‘38. Expansion and contraction in demand are caused by: (2) Change in price of the given good (b) Change in income (©) Change in prices of related goods (a) Change in population 39. When income of the consumer falls, the impact on price-demand curve ofan inferior Goods: (hg, the correct alternative) {CBSE, Det 2 (@) Shits tothe right (0) Shifts tothe let (©) There is upward movement along the curve _(d) There is downward movement along theo 40. If due to fallin the price of good X, demand for good Y rises, the two goods are: (Choose the aternatie) (CBSE, Al naa (a) Substitutes (b) Complements (c) Notrelated (d) Competitive 41. If with the rise in price of good ¥, demand for good X rises, the two goods are: (Choose the conay alternative) (CBSE, Foreign ays, (2) Subsiutes (©) Complements (©) Notretates (@) dont demanded 42, The demand curve of a good shifts from DD’ to da. (CBSE, Deihi Compt 2015, Y \' oot ‘OF Demand unisy ~ * ‘This shit canbe caused by: (Choose he corectattematv) (@) fallin the price ofthe good (0) fsein the pice of he good (6 tis inthe price of substitute goods (@) sein epi of complementary goods 43. An increase in the price of Coffee will have the following effect on the demand curve of Tea y s s, o €F = Flom 3" ™ 5 5" . & i [poe é é Noo Dicey on m a a, Demand ea Doran Duman ans) iri) a) to)“The folowing movernentin the demand curve is because ot y i {a) Increase in price of given comedy eh {p) Decrease in pie of gvon commodity z {c) Increase in price of substitute good ge—t {@) Decrease in pice of complementary good = i D a, onne aman few) 445, What does the following diagram represent? y a0 Oo end won) {@)_ Change in Demand {b) Change in Quanty Demanded {¢), Both (a) and (6) (a) Neither (a) nor (b) 48, itch ofthe folowing represents market demand curve? pak i INS % 5 ‘OT quantity Demand . fa) 0,0, {b) D303. © D0 {@) None of he above 47. Which of the folowing diagram represents the situation of Expansion in Demand’? y x x ee i ge-S. : oe | Nov, ao ot aa* ot aa, 7x cumand font) andr) Darang (ees) «i a @ 48. The slope of demand curve is generally (a) Negative (0) Positive (0) Constant (a) Either (a) oF (0)Y13. 25, 26. (d); 27. (c); 28. (c); 29. (d); 30. (b); 31. (©); 32. (@) : 38. (0:36 37. (a); 38. (a); 39. (a); 40. (6); 44. (2); 42. (©); 43. (A); 44. (2); 45. (B); 46. (0); 47. (aha A 12. Ans. 1. (d); 2. (a); 3. (6); 4. (6); 5. (a); 6. (0); 7. (d); 8. (A); 9. (a); 10. VA. (c); 15. (©); 16. (6); 17. (a); 18. (d); 19. (a); 20. (c);, 21. (