Q. An individual demand curve slopes downward to the right because of the: Working of the law of diminishing marginal utility substitution effect of decrease in price income effect of fall in Price All of the above Answer: All of the above
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Q. If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to: Increase B Decrease Remain the same Become zero Answer: Increase
Q. Demand for a commodity refers to: Need for the commodity Desire for the commodity Amount of the commodity demanded at a particular price and at a particular time Quantity demanded of that commodity Answer: Amount of the commodity demanded at a particular price and at a particular time
Q. Which of the following is a demand function? Q + 4P = 20 Q = 35 + 3P Q – 2P – 15 = 0 5P – Q = 4 Answer: Q + 4P = 20
Q. If demand is unitary elastic, a 25% increases in price will result in: 25% change in total revenue No change in quantity demanded 1% decrease in quantity demanded 25% decrease in quantity demanded Answer: 25% decrease in quantity demanded
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Q. Other things equal, if a good has more substitutes, its price elasticity of demand is: Larger Smaller Zero Unity Answer: Larger
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Q. When demand is perfectly inelastic, an increase in price will result in: A decrease in total revenue An increase in total revenue No change in total revenue A decrease in quantity demanded Answer: An increase in total revenue
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Q. Under free exchange markets the rate of foreign exchange is determined by: Balance of Payments theory Mint par theory Purchasing power parity theory None of the above Answer: Balance of Payments theory
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Q. For measuring the changes in the price level of the country, which among the following index number is used Cost of living index number Production index number Security Price index number Whole sale price index number Answer: Whole sale price index number
Q. The new world Trade organization (WTO), which replaced the GATT came into effect from____ 1ST January 1991 1st January 1995 1st April 1994 1st May 1995 Answer: 1st January 1995
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