Demand and Supply MCQs

Q. ______ leads to an increase in the supply of a commodity without a change in its price. Rise in supply Contraction in supply Expansion in supply Fall in supply Answer: Rise in supply

Q. Which of the following scenarios will not lead to a change in demand for a product? A change in the tastes of its consumers A change in the price of that product An increase in the income of its consumers None of the above Answer: None of the above

Q. A firm’s supply curve is on an upward slope because ______. The production costs of additional units of output will rise beyond a point Consumers see a positive relationship between price and quality Expansion of production leads to the use of inferior inputs None of the above Answer: The production costs of additional units

Q. Which of the following scenarios will not shift the demand curve for a particular product? A change in the income of the consumers of that product Effective advertising campaign by producers of a substitute good A reduction in the price of the raw material for that product A widely publicised study that says the

Q. If the market supply curve for a product shifts rightwards, what is the best possible explanation for this shift? Increase in the price of raw materials Introduction of a tax on that product by the government Introduction of a new technique that makes the production of that commodity cheaper An advertising campaign that is

Q. In May 2019, a firm was providing 5000 kg of sugar at a market price of Rs. 30 per kg. But in June 2019, the supply of sugar decreased to 4500 kg at a market price of Rs. 20 per kg. This change shows that the supply of sugar is _____. More elastic Less

Q. When the demand for a product is perfectly inelastic, a price increase will result in __________. A decrease in quantity demanded of the product No change in the total income from a product An increase in the total income from a product A reduction in the total income from a product Answer: An increase

Q. In a particular year, the farmers experienced dry weather. If all other factors remain the same, the supply curve of wheat for farmers will shift to the ________ direction. Downward Rightward Leftward None of the above Answer: Leftward

Q. If the elasticity of supply is greater than one, the supply curve would be _______. Touching y-axis Passing through the origin Vertical Horizontal Answer: Touching y-axis

Q. Would an increase in demand for a product cause the supply curve to shift in any direction? No effect on supply Change in the slope of a supply curve The supply curve will move to the right The supply curve will move to the left Answer: No effect on supply