1st Year Principles of Economics Chapter 3 TestDemand And Supply

Q1. Multiple choice questions (Attempt all · 10 × 1 = 10)

1. According to the law of supply there is relation in price and supply:

   1. Inverse

   2. Increasing

   3. Negative

   4. Indirect

2. When supply curve shifts leftward or up, it is called:

   1. Rise of supply

   2. Fall of supply

   3. Extension of supply

   4. Contraction of supply

3. When supply decreases due to other factors besides price, it is called:

   1. Extension of supply

   2. Contraction of supply

   3. Rise of supply

   4. Fall of supply

4. Market equilibrium is attained when there exists in the market:

   1. Perfect competition

   2. Imperfect competition

   3. Monopoly

   4. Large quantity of commodity comes in the market

5. If the total expenditure of the consumer does not change due to increase or decrease (change) in price, then nature of elasticity of demand will be:

   1. Equal to unity

   2. Less than unity

   3. More than unity

   4. Elasticity of demand=Zero

6. Example of complementary demand is:

   1. Petrol and Car

   2. Petrol and CNG

   3. Tea and Coffee

   4. Inkpot and Book

7. In functional equation of demand, Q=a-bP a and b are:

   1. Constants

   2. Variables

   3. Continuous variables

   4. Discontinuous variables

8. If supply goes on increasing due to a slight increase in price then elasticity of supply is called:

   1. Zero

   2. Infinite

   3. Equal to unity

   4. More than unity

9. The goods on which law of demand does not apply, are called:

   1. Services

   2. Goods and services

   3. Giffin goods

   4. Capital goods

10. what is meant by demand for a commodity in economics:

    1. To desire for a commodity

    2. To have power to buy

    3. To have power to buy a commodity with desire

    4. Quantity of a commodity