QB CH-2 Questions

2.1 DEMAND ANALYSIS

  1. One which of the following the Effective Demand for a thing depends?
  • Desire
  • Means to purchase (Ability to Buy)
  • Willingness to use those means
  • All of these
  1. Demand arises in respect of –
  • Socially desirable goods, e.g. food, clothing
  • Harmful goods, e.g. liquor, cigarettes, etc.
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. Individual demand shows the quantities of demand for a commodity at various prices by –
  • A particular consumer
  • The entire market
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. Industry demand is also called –
  • Household demand
  • Market demand
  • Individual demand
  • All of the above
  1. If A = household demand and B = Market Demand, then –
  • A > B
  • A < B
  • A = B = 0
  • None of the above
  1. If household demand and market demand are equal in a situation, it means that –
  • There is only one producer
  • There is only one consumer
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. If market demand and Firm’s Demand are equal in a situation, it means that –
  • There is only one producer
  • There is only one consumer
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. If Individual Demand = Market Demand = Firm’s Demand, it means that –
  • There is only one producer
  • There is only one consumer
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. Demonstration Effect is generally found in respect of
  • Necessary Goods
  • Luxury and quasi-Luxury Goods
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. Goods covered by Demonstration Effect can be best described as –
  • Necessities of Life
  • Conspicuous Necessities
  • Absolute Luxuries
  • All of the above
  1. In which of the following will the Demonstration Effect be high?
  • Water
  • Rice
  • Cellphone
  • Plant and machinery
  1. If an increase in the price of Blue jeans leads to an increase in the demand for Tennis Shoes, then Blue Jeans and Tennis Shoes are-
  • Complements
  • Inferior Goods
  • Normal Goods
  • Substitutes
  1. In case of Complementary goods, decrease in price of a product will-
  • Decrease the demand for the other product
  • Increase the price of the other product
  • Increase the demand for the other product
  • Not affect the demand for the other product
  1. If X and Y are Complementary Goods, if there is an increase in price of X, then –
  • Demand of X will decrease and Demand of Y will increase.
  • Demand of X will increase and Demand of Y will decrease.
  • Demand of X and Y will increase.
  • Demand of X and Y will decrease.
  1. In case of Substitute Goods, increase in price of a product will –
  • Decrease the demand for the other product.
  • Increase the price of the other product.
  • Increase the demand for the other product.
  • Not affect the demand for the other product.
  1. If X and Y are Substitute goods, the price of X and the demand of Y are –
  • Directly related.
  • Inversely related.
  • Proportionally related.
  • Any of these.
  1. If Tea and Coffee are Substitutes, a fall in the Prices of Tea leads to –
  • Rise in the demand for Tea
  • Fall in the supply of Coffee
  • Fall in the demand for coffee
  • Rise in the supply of Tea
  1. Which of the following Statements is not true about Individual Demand?
  • The Decision to purchase is always influenced by the Income Constraint.
  • Selection of products and services are based on the opportunity cost
  • Consumers measure their Opportunity cost in terms of the price they pay for the products and services they forego.
  • Decision to purchase is never influenced or concerned with the income constraint.
  1. The Giffen Effect in respect of Inferior Goods was observed in the case of –
  • Rice and Wheat
  • Wheat and meat
  • Bread and Meat
  • Bread and Rice
  1. If Income levels increase, and the demand for goods increase by less than proportionate extent, such goods will be –
  • Inferior Goods
  • Necessary Goods
  • Luxury Goods
  • Nothing can be said
  1. If Income Levels increase, and the demand for goods increase by more than proportionate extent, such goods will be –
  • Inferior Goods
  • Necessary Goods
  • Luxury Goods
  • Nothing can be said
  1. In case of unequal distribution of income in the country, the propensity to consume will be ….., and demand for consumer Goods will be …
  • Higher, Lower
  • Higher, higher
  • Lower, higher
  • Lower, lower
  1. All but one of the following are assumed to remain the same while drawing an individual’s Demand curve for a product. Which one is it?
  • Preference of the individual
  • His monetary income
  • Price
  • Price of related goods
  1. What is the other name given to the Demand Curve?
  • Profit Curve
  • Average Revenue Curve
  • Average Cost Curve
  • Indifference Curve
  1. Why is the Demand curve otherwise known as the Average Revenue Curve?
  • Price paid for each unit by the Consumer, is the Average Revenue per unit for the seller.
  • Price paid for each unit by the Consumer, is the total paid by the seller.
  • Price paid by consumer is equal to the seller’s willingness to sell the product
  • All of the above
  1. Which of these is not depicted in typical demand curve?
  • Quantity Demanded
  • Price of the product
  • Income levels of consumer
  • None of the above
  1. The law of Demand refers to –
  • Price – Supply relationship
  • Price – cost relationship
  • Price – Demand relationship
  • Price – Income relationship
  1. The law of Demand is –
  • A quantitative statement
  • A qualitative statement
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. The term “Ceteris paribus” in the law of Demand denotes –
  • All factors remaining constant
  • All factors except one remaining constant
  • All factors being variable
  • All of the product
  1. Why does the law of Demand operate?
  • Income effect
  • Substitution effect
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. When we say that the demand for a commodity depends upon the money income of the consumer, we are referring to –
  • Income effect
  • Substitution effect
  • Demonstration effect
  • Utility effect
  1. …… refers to the effect of a change in the price of a product on the Consumer’s purchasing power.
  • Law of Equi- Marginal utility
  • Income effect
  • Substitution effect
  • Consumer surplus
  1. When increase in his real income induces a consumer to buy more of a Commodity whose prices has fallen, it is called –
  • Inducement effect
  • Substitution effect
  • Income effect
  • Utility effect
  1. When the price of a Reynolds pen falls, ceteris paribus, Buyers substitute  Reynolds pen for other pens that are now relatively more expensive. This is called-
  • Price effect
  • Substitution effect
  • Income effect
  • Veblen effect
  1. …….refers to the Consumer’s Reaction to a change in the relative prices of two products, keeping the total utility constant.
  • Consumer surplus
  • Income effect
  • Substitution effect
  • Law of Diminishing Marginal Utility
  1. Which of the following statement best describes the substitution effect?
  • When the price of a product rises, Consumers stop consuming the product.
  • When the price of a product rises, Consumers tend to substitute it with a relatively inexpensive product
  • When the price of a product rises, consumers tend to substitute it with a relatively inexpensive product
  • When the price of a product fails, consumers tend to substitute in with a more expensive product
  1. In normal circumstances, if the Government increase the tax on any product, the demand for the product….. in the short run
  • Increases
  • Decreases
  • Remain unchanged
  • Tax has nothing to do with the demand for any product
  1. The segregation between Income effect and substitute effect is adequately explained by –
  • Cardinal Approach
  • Ordinal Approach
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. When the price of a product falls, its Demand increase because –
  • New consumers start buying the product
  • Existing consumers buy more quantities of the product
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. Under the law of Diminishing Marginal Utility, Consumers continue buying till price equals Marginal utility. Hence at lower prices –
  • Higher quantities will be demanded
  • Lower quantity level
  • At zero quantity level
  • All of the above
  1. Conspicuous Goods –
  • Are an exception the law of Demand
  • Follow the law of the Demand
  • Either (a) or (b)
  • Neither (a) nor (b)
  1. When Consumers feel that if the commodity is expensive, that it has got more utility, we are referring to –
  • Inferior Goods
  • Normal Goods
  • Conspicuous Goods
  • Giffen Goods
  1. If the demand for petrol remains the same even after the increase in petrol prices, it means Petrol is a –
  • Normal Good
  • Necessity
  • Luxury Good
  • Inferior Good
  1. Under which of the following situations the law of Demand will not operate?
  • Price change expected by consumer
  • Consumer’s lack of knowledge about prices
  • Irrational purchasing pattern by Consumer
  • All of the above
  1. Rise in quantity demanded of a product as a result of reduction in price is know as –
  • Change in Demand
  • Contraction of Demand
  • Expansion of Demand
  • Alternation of Demand
  1. A movement along the Demand curve for soft drinks is best described as –
  • Increase in Demand
  • Decrease in demand
  • Change in quantity demanded
  • Change in demand
  1. Expansion of Demand is associated with –
  • Rise in price, rise in quantity demanded
  • Fall in price, fall in quantity demanded
  • Fall in price, rise in quantity demanded
  • Rise in price, fall in quantity demanded
  1. An increase in Demand can result from –
  • Decline in Market price
  • Increase in income
  • Reduction in the price of substitutes
  • Increase in the price of complements
  1. Which of the factors does not cause increase in Demand?
  • Rise in the price of Substitute goods
  • Fall in price of this product
  • Increase in population
  • Increase in income levels of buyers
  1. The concept of Elasticity of Demand was developed by –
  • Alfred marshall
  • Edwin cannon
  • Paul Samuelson
  • Fredric Bonham
  1. Two important factors which make difference in the Elasticity of Demand for different commodities are
  • Preferences and Income
  • Income and Expenditure
  • Quantity and price of the commodity
  • Tax rates and level of income
  1. Elasticity of Demand is attributed to –
  • Changes in prices
  • Change in incomes
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. Which of the following statements regarding Elasticity of Demand is true?
  • Elasticity can be positive or negative
  • Elasticity always has a negative value
  • Elasticity always has a positive value
  • Elasticity can never be zero
  1. Which of the following statements is true with regard to the elasticity of demand?
  • The elasticity of demand remains same, both in short run and in long run
  • Demand is more elastic in the short run than in long run
  • Demand is more inelastic in the long run than tin short run
  • Demand is more elastic in the long run than in short run
  1. Usually, the demand for Necessities is –
  • Highly Elastic
  • Highly Inelastic
  • Slightly Elastic
  • Slightly Inelastic
  1. Amongst the following which item has highest price Elasticity?
  • Salt
  • Petrol
  • Indian Oil’s Petrol
  • Rice
  1. Goods which have more close or perfect substitutes are –
  • Less Elastic
  • Unit Elastic
  • More Elastic
  • Zero Elastic
  1. Goods which have fewer substitutes are –
  • Less Elastic
  • Unit Elastic
  • More Elastic
  • Zero Elastic
  1. Necessary Goods are considered ….. than luxury goods.
  • Less Elastic
  • Unit Elastic
  • More Elastic
  • Zero Elastic
  1. Goods in respect of which the Consumers have more time to adjust or modify their consumption pattern are –
  • Less Elastic
  • Unit Elastic
  • More Elastic
  • Zero Elastic
  1. Medicines have less elastic demand since –
  • They have alternative uses
  • They have to be used immediately, and their purchase and use cannot be delayed
  • There are fewer substitutes available
  • All of the above
  1. If the demand for a commodity is …….., entire burden of indirect will fall on the consumer.
  • Relatively inelastic
  • Perfectly inelastic
  • Perfectly elastic
  • Relative elastic
  1. If the demand for the good is perfectly inelastic, which of the following is correct?
  • Quantity does not change at all
  • Quantity decreases and price falls
  • Quantity increases and price increases
  • Quantity increases and price falls
  1. If a product has perfectly inelastic demand, and there is a change in its price, which of the following is correct?
  • Percent change in quantity demanded will be greater than percent change in price
  • Percent change in quantity demanded will be lesser than percent change in price
  • Percent change in quantity demanded will be equal to percent change in price
  • Quantity demanded will not change at all
  1. Price Elasticity of Demand for addictive products like cigarettes and alcohol would be –
  • Greater than 1
  • Less than 1
  • Infinity
  • One
  1. If the demand for the good is less elastic, and E is the measure of Elastic, which of the following is true?
  • E = 0
  • 0 < E < 1
  • E = 1
  • E > 1
  1. If the demand of the good is less elastic, the Demand curve will be –
  • Horizontal line
  • Vertical line
  • Downward sloping to the right, flatter
  • Downward sloping to the right, steeper
  1. For goods with unitelastic demand –
  • q > p
  • q = p
  • q < p
  • q = 1
  1. Rectangular Hyperbola is also called –
  • Equilateral Hyperbola
  • Vertical line
  • Square
  • Horizontal line
  1. If a product has less elastic demand, and there is a change in its price, which of the following is correct?
  • Percent change in Quantity demanded will be greater than percent change in price
  • Percent change in Quantity demanded will be lesser than percent change in price
  • Percent change in Quantity demanded will be equal to percent in price
  • Quantity demanded will not change at all
  1. Price Elasticity of Demand would be higher for those products which have –
  • A higher number of substitutes
  • Fewer substitutes
  • No substitutes
  • Fewer complementary goods
  1. If the Elasticity of Demand for a commodity is perfectly inelastic, then which of the following is incorrect?
  • The commodity must be essential to those who purchase it.
  • The commodity must have many substitutes
  • The commodity will be purchased regardless of increase in its price
  • The elasticity of demand for this commodity must be equal to zero.
  1. If the demand for a product reduces by 5% as a result of an increase in the price by 25%. What is the price Elasticity of Demand?
  • -0.2
  • -0.5
  • -0.25
  • 2
  1. If price of coffee decreases from Rs. 5 to Rs. 4.50, and as a result the Consumer’s demand for coffee increase from 60 grams to 75 grams, the absolute price elasticity of demand of Coffee is –
  • 5
  • 0
  • 0
  • 5
  1. If the demand of a product reduces by 2% as a result of an increase in the price by 10% , what is the price Elasticity of Demand for the product?
  • +0.20
  • -0.40
  • -0.20
  • +0.40
  1. If the Demand for Cricket Balls increases from 50 to 55 because of fall in price from Rs. 25 to Rs. 24, what is the price Elasticity of Demand for Cricket Balls?
  • (1.0)
  • (2.5)
  • (2)
  • (5)
  1. What is the price Elasticity of Demand for a product, if an increase in the price of the good by 2% leads to fall in demand by 3%?
  • +1.5
  • -1.5
  • 1
  • 0
  1. If a shop raises the price of a product from Rs. 60 to Rs. 100 and Quantity demanded falls from 400 units to 300 units, the price Elasticity of Demand is –
  • 667
  • 500
  • 000
  • 375
  1. A book seller estimates that if the price of a book is increased from Rs. 60 to Rs. 67, the quantity of books demanded will decrease from 2,035 to 1,946. The Book’s price Elasticity of Demand is approximately –
  • 4
  • 8
  • 0
  • 5
  1. Point Elasticity is useful for which of the following situations –
  • The bookstore is considering doubling the price of notebooks
  • A restaurant is considering lowering the price of its most expensive dishes by 50%
  • An automobile producer is interested in determining the response of consumers to the price of cars being lowered by Rs. 50,000
  • None of the above
  1. Which of the following statements regarding Elasticity of Demand is true?
  • Elasticity of demand decreases as one goes down a Straight line demand curve
  • Elasticity of demand increases as one goes down a straight line demand curve
  • Elasticity of demand is constant throughout the straight line demand curve
  • None of the above
  1. At a price Rs. 300 per month, there are 30,000 subscribers to Cable TV in a small town. If the Cable company raises its price to Rs. 400 per month, the number of subscribers will fall to 20,000. Using the mid-point method for calculating the elasticity, what is the price Elasticity of Demand for cable TV?
  • 4
  • 66
  • 75
  • 0
  1. Under total outlay method, if a result of the decrease in price of a product, the total expenditure on the product rises, we say that price Elasticity of Demand is –
  • Equal to unity
  • Greater than unity
  • Less than unity
  • Zero
  1. If the demand for a product is elastic, an decrease in its price will cause the Total Expenditure of the Consumers to –
  • Remain the same
  • Increase
  • Decrease
  • Any of these
  1. Under Total Outlay Method, if price and Consumer’s Total Expenditure on the product move in the same direction, then, price elasticity of demand is –
  • Equal to unity
  • Greater than unity
  • Less than unity
  • Zero
  1. An increase in price will result in an increase in Total Revenue if –
  • Percentage change in quantity demanded is less than the percentage change in price
  • Percentage change in quantity demanded is more than percentage change in price
  • Demand is elastic
  • Consumer is operating along a linear demand curve at a which the price is very high and the quantity demanded is very low
  1. Which of the following statements regarding Elasticity of Demand is true?
  • If the demand for the product is inelastic, an increase in price will have a positive effect on the total revenue of the firm
  • If the demand for the product is elastic, an increase in price will have a positive effect on the total revenue of the firm
  • If the demand for the product is inelastic, an increase in price will have a negative effect on the total revenue of the firm
  • If the demand for the product is inelastic, a decrease in price will have a positive effect on the total revenue of the firm
  1. If a good has price elasticity greater than one then –
  • Demand is unit elastic and a change in price does not affect seller’s revenue.
  • Demand is elastic and change in the opposite direction.
  • Demand is inelastic and change in price causes seller’s revenue to change in the same direction
  • None of the above is correct
  1. Ceteris paribus, what would be the impact on foreign exchange earnings for a given falling export prices, if the demand for the country’s exports is inelastic?
  • Foreign exchange earning decrease
  • Foreign exchange earning increase
  • No effect on foreign exchange earning
  • Foreign exchange earning increase for a brief period and decrease drastically later on
  1. If the railways are making losses on the passenger traffic, they should lower their fares. The suggested remedy would only if the demand for rail travel had a price elasticity of –
  • Zero
  • Greater than zero but less than one
  • One
  • Greater than one
  1. If Cinema halls are making losses they should lower the ticket fares. This suggestion would only work if the demand for watching movies in cinema halls and a price elasticity of –
  • Zero
  • Greater than zero less than one
  • One greater than one
  1. Price elasticity of demand for a product is zero. If the firm increases the price of the product by 10%, total revenue of the firm will –
  • Not change
  • Increase to infinity
  • Fall to zero
  • Decrease by 10%
  1. Positive income Elasticity implies that as income rises, demand for the commodity –
  • Rises
  • Falls
  • Remains unchanged
  • Becomes zero
  1. For what type of goods does demand fall with rise in income level of households?
  • Inferior goods
  • Substitutes
  • Luxuries
  • Necessities
  1. What type of goods does a consumer eventually stop buying, when his income rises?
  • Goods with positive income elasticity
  • Goods with negative income elasticity
  • Goods with zero income elasticity
  • No relationship exists between the type of the goods brought and rise in income
  1. In Demand – supply analysis, if the income of the consumer increases, the demand curve for an inferior good –
  • Shifts upward to the right
  • Shifts downward to the left
  • Shifts upward to the left
  • Shifts downward to the right
  1. If quantity demanded does not change as income changes, then income Elasticity of Demand is –
  • Below 1
  • Above 1
  • Zero
  • Between -1 and 0
  1. If an increase in consumer Incomes leads to a increase in the demand for Product X, then Product X is –
  • A normal good
  • A substitute good
  • An inferior good
  • None of the above
  1. The Income of a Household rises by 20%, the demand for computer rises by 25%, this means computer (in Economics) is a/an
  • Inferior good
  • Luxury good
  • Necessity
  • Nothing can be said
  1. If income Elasticity = 1, it means that proportion of Income spent on goods …….., as income of the Consumers increases.
  • Increase
  • Decrease
  • Remains constant
  • Nothing can be said
  1. If consumers always spend 15% of their income on food, then the Income Elasticity of Demand for food is –
  • 50
  • 15
  • 00
  • 15
  1. Which of the following is not an income – elastic product / service?
  • Air travel
  • Entertainment in an Amusement park
  • Life – saving drugs
  • Meals in a costly restaurant
  1. Which of the following is not a determinant of the Advertising Elasticity of Demand?
  • Effect of time
  • Stages of Product
  • Advertising by Competitors
  • Income levels of the consumers
  1. If the quantity of CD demanded increases from 260 to 290 in response to an increase in income from Rs. 9,000 to Rs. 9,800, then Income Elasticity of Demand is approximately –
  • 4
  • 01
  • 3
  • 3
  1. Concerned about the poor state of the economy, a Car Dealer estimates that if income decreases only Consequently, the Income Elasticity of Demand for cars is approximately –
  • -1.2
  • 01
  • 4
  • 2
  1. Income of a household increases by 10%, and the demand for TV rises by 20%. This means that TV is an example of –
  • Normal goods
  • Luxurious goods
  • Inferior goods
  • Economic Goods
  1. If Goods X and Y are complementary, their cross Elasticity is –
  • Infinity
  • Greater than zero but less than infinity
  • Zero
  • Negative
  1. What will be the slope of demand curve when it shows the cross elasticity between two complementary goods?
  • Negative
  • Positive
  • Horizontal
  • None of the these
  1. Cross elasticity between Tea and Sugar is –
  • Less than 0
  • Greater than 1
  • Zero
  • Greater than 0, but less than 1
  1. Goods having negative cross elasticity are –
  • Mostly complementary goods
  • Always complementary goods
  • Mostly substitute goods
  • Always substitute goods
  1. Negative cross elasticity always implies that the goods are complementary in nature. This statement is –
  • True
  • False
  • Partially true
  • Nothing can be said
  1. If the co-efficient of cross elasticity of Demand of X for Y is 3, it means that X and Y are –
  • Complementary goods
  • Substitute goods
  • Inferior Goods
  • Normal goods
  1. When Cola companies coke and pepsi, introduced colas in mini bottles at a low price, the demand for Tea and coffee is small tea stalls declined drastically. The cross elasticity between the colas and Tea / Coffee is –
  • Negative
  • Positive
  • Zero
  • Infinite
  1. Positive cross Elasticity always implies that the goods are substitute goods. This statement is –
  • True
  • False
  • Partially true
  • Nothing can be said
  1. If cross Elasticity of demand is infinity, it means that the goods are –
  • Perfect complementary goods
  • Perfect substitute goods
  • Inferior goods
  • Normal goods
  1. If the quantity demanded of Tea increases by 5% when the price of Coffee increases by 20%, the Cross Elasticity of demand between Tea and coffee is –
  • -0.25
  • 25
  • -4
  • 4
  1. The cross Elasticity of monthly demand for ink pen, when the price of gel pen increases by 25% and demand for ink pen increases by 50% is equal to –
  • +2.00
  • -2.00
  • 09
  • +2.09
  1. If the quantity demanded of product X increases from 8 to 12 units in response to an increase in the price of product Y from Rs. 23 to Rs. 27, the cross Elasticity of Demand for X with respect to price X and Y is approximately –
  • 35 and X and Y are complements
  • 35 and X and Y are substitutes
  • 5 and X and Y are complements.
  • 5 and X and Y are substitutes.

 

Use the following data for the next 6 questions.

A grocery shop used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre.

Following are the consequences:

  • Only 200 litres of milk was sold every month.
  • The number of boxes of crereal customers bought went down from 200 to 140
  • The number of packets of powered milk customers bought went up from 90 to 220 per month.
  1. The price Elasticity of Demand when fresh milk’s price increase from Rs. 20 per litre to Rs. 30 per litre is equal to –
  • 5
  • 0
  • 66
  • 66
  1. What can be said about the price Elasticity of Demand for fresh milk?
  • It is perfectly elastic
  • It is elastic
  • It is perfectly inelastic
  • It is inelastic
  1. The cross elasticity of demand for powered milk, when the price of fresh milk increases from Rs. 20 to Rs. 30 per litre is equal to –
  • +1.05
  • -1.05
  • -2.89
  • +2.89
  1. What can be said about fresh milk and powered milk?
  • They are complementary goods
  • They are substitute goods
  • They are unrelated goods
  • Nothing can be said
  1. If income of the consumers increases by 50% and the quantity of fresh milk demanded increases by 30%. What is income Elasticity of Demand for fresh milk?
  • 5
  • 6
  • 25
  • 50
  1. We can say that fresh milk in economics sense is an example of –
  • Luxury goods
  • Inferior goods
  • Normal goods
  • Nothing can be said

 

Use of the following data for the next 8 questions.

A shopkeeper sells gel pen at Rs. 10 per pen. At this price he can sell 120 units per month. After some time, he raises the price to Rs. 15 per pen. Following the price rise-raises the price to Rs. 15 per pen. Following the price rise –

  • Only 50 pens were sold every month
  • The number of refills bought went down from 200 to 150.
  • The number of ink pen customers bought went up from 90 to 150 per month.
  1. Price Elasticity of demand when gel pen’s price increases from Rs. 10 to Rs. 15 per pen is –
  • 5
  • 0
  • 16
  • 16
  1. What can be said said about the price elasticity of demand for Gel pens?
  • It is perfectly elastic
  • It is elastic
  • It is perfectly inelastic
  • It is inelastic
  1. The cross elasticity of demand for refills when the price of Gel pen increases from Rs. 10 to Rs. 15 is –
  • -0.50
  • +0.25
  • -0.19
  • +0.38
  1. What can be said about Gel pen and Refills?
  • They are complementary goods
  • They are substitute goods
  • They are unrelated goods
  • Nothing can be said
  1. Cross Elasticity of Demand for Ink pen when the price of Gel pen increases from Rs. 10 to Rs. 15 is equal to-
  • +1.33
  • -1.05
  • -2.09
  • +2.09
  1. What can be said about Gel pen and ink pens?
  • They are complementary goods
  • They are substitute goods
  • They are unrelated goods
  • Nothing can be said
  1. If income of the residents of locality increase by 50% and the quantity of Gel pens demanded increases by 20%. What is income elasticity of demand for gel pen?
  • 4
  • 6
  • 25
  • 50
  1. We can say that Gel pen in economics sense is an example of-
  • Luxury goods
  • Inferior goods
  • Normal goods
  • Nothing can be said

 

Use the following data for the next 6 questions.

X, Y and Z are three commodities where X and Y are complementary whereas X and Z are substitutes.

A Shopkeeper sells commodity X at Rs. 20 per piece. At this price, he is able to sell 100 pieces of X per month. After some time, he decreases the price of X to Rs. 10 per piece. Consequently –

  • He is able to sell 150 pieces of X per month
  • Demand for Y increases from 25 to 50 units
  • Demand for Z decreases from 75 to 50 units.
  1. Price Elasticity of Demand (using Arc method) when price of X decreases from Rs. 20 per piece to Rs. 10 per piece will be –
  • 6
  • 6
  • 5
  • 5
  1. What can be said about the price Elasticity of Demand for commodity X?
  • Demand is unit elastic
  • Demand is highly elastic
  • Demand is inelastic
  • Demand is perfectly elastic
  1. Cross Elasticity of Demand for commodity Y when the price of X decreases from Rs. 20 per piece to Rs. 10 per piece will be –
  • -1.5
  • +1.5
  • +1
  • -1
  1. Cross Elasticity of demand for commodity Z when the price of X decreases from Rs. 20 per piece to Rs. 10 per piece will be –
  • +1.66
  • +0.66
  • -1.66
  • -0.66
  1. If income of the consumers increase by 50% and the demand for X increases by 20% what will be the Income Elasticity of Demand for X?
  • 04
  • 4
  • 00
  • -4.00
  1. We can say that Commodity X in economic sense is an example of –
  • Inferior goods
  • Giffin goods
  • Normal goods
  • Luxury goods

 

2.2 UTILITY ANALYSIS AND CONSUMER BEHAVIOUR

 

 

  1. Which of the following statements regarding utility is not true?
  • Utility is the psychological satisfaction that a consumer derives by using a particular product
  • Utility helps to understand how consumer make choices
  • Utility is always measureable
  • Utility is a purely subjective issue.
  1. Utility is a-
  • Subjective concept
  • Objective concept
  • Irrelevant concept
  • Indeterminate concept
  1. Utility is applicable-
  • Only for socially desirable goods (food, etc.)
  • Only for harmful goods like liqour, cigarettes, etc.
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. Utility is ethically neutral. This statement is-
  • True
  • False
  • Partially True
  • Nothing can be said about Utility
  1. Cardinal Utility Approach is also known as-
  • Indifference curve Analysis
  • Hicks and allen Approach
  • Marginal utility Analysis
  • All of the Above
  1. Cardinal Measure of utility is required in-
  • Marginal utility Theory
  • Indifference curve Theory
  • Revealed preference Theory
  • None of the above
  1. Which of the approaches uses Money Measurement Concept for utility?
  • Cardinal Approach
  • Ordinal Approach
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. Which of the theories is applicable under Cardinal Approach to Utility?
  • Law of Diminishing Marginal Utility
  • Law of Equi-Marginal Utility
  • Both (a) and (b) and consumer surplus theory
  • Neither (a) nor (b)
  1. Which one of the following assumptions is not necessary for the Cardinal Utility Theory?
  • Rationality of the consumer
  • Constant Marginal Utility of Money
  • Perfectly Competitive Market
  • Additivity of Utility
  1. Which of the following is nor an assumption under Cardinal Approach to Utility Analysis?
  • Utilities of goods are independent of one another
  • Marginal Utility of Money is constant
  • Utility is comparable across goods
  • Utility cannot be measured but only ranked
  1. The Cardinal approach to Utility assumes marginal utility of money is-
  • Zero
  • Constant
  • Increasing Trend
  • Decreasing Trend
  1. Marginal Utility always show –
  • Increasing trend
  • Decreasing trend
  • Both (a) and(b)
  • Neither (a) nor (b)
  1. The total utility derived by Ram by consuming 10 cups of coffee is 99, whereas the total utility on consumption of 11 cup is 95. What is the marginal utility for 11 cup of coffee?
  • -4
  • 4
  • 9
  • -3
  1. Which of the following laws states that the more a consumes a product, the lesser the utility he derives from the additional consumption?
  • Law of equal – Marginal utility
  • Law of ordinal utility
  • Law of cardinal utility
  • Law of diminishing marginal utility
  1. After reaching a saturation point, consumption of additional units of the commodity cause –
  • Total Utility to fall and marginal Utility to increase.
  • Total utility & Marginal Utility both to increase.
  • Total Utility to fall and Marginal Utility to become negative.
  • Total Utility to become negative and Marginal Utility to fall.
  1. Marginal Utility of a commodity depends on its quantity and is-
  • Inversely proportional to its quantity
  • Not proportional to its quantity
  • Independent of its quantity
  • None of the above.
  1. Which of the following is an assumption of Law of the Law of Diminishing Marginal Utility?
  • Perfect competition
  • Cardinal approach to utility
  • Cardinal demand
  • Constant marginal utility of money
  1. Which of the following is an assumption of law of the law of diminishing marginal utility?
  • No effect of consumer’s personal Tastes and Prefeneces
  • Cardinal approach to utility
  • Different units consumed should be identical in all aspects.
  • All of the above.
  1. The law of diminishing marginal utility does not apply to ………. , where personal preferences are dominant.
  • Music
  • Hobbies like stamp and coin collection
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. If customer’s taste or liking for an item increases with additional consumption, then the law of diminishing marginal utility will still hold good. This statement is-
  • True
  • False
  • Partially true
  • Nothing can be said
  1. As per the assumptions to the law of diminishing marginal utility, in case of money, gold, etc. a greater quantity may-
  • Increase the lust and utility thereof
  • Decrease the lust and utility thereof
  • Not affect utility at all
  • Nothing can be said
  1. Which of the following laws say “If a person has a product which can be put to several uses lie will distribute it among these uses in such a way that it has the same marginal utility”?
  • Law of Equi-Marginal Utility
  • Law of Diminishing Marginal Utility
  • Law of Utility
  • Law of Diminishing Marginal Returns
  1. The Consumer will attain maximum satisfaction, and will be in equilibrium when MU of money spent on various goods that he buys, are-
  • Zero
  • Decreasing
  • Increasing
  • Equal
  1. The Consumer will attain maximum satisfaction, and will be in equilibrium when …… that he buys, are equal.
  • MU of different goods
  • MU of money as such
  • MU of money spent on various goods
  • All of the above
  1. If MU of money spent on Commodity A is greater than the MU of money spent on commodity B, the Consumer will withdraw some money from the purchase of B, and will spend it on A, till the MU of money in the two cases becomes equal. Which theory says so?
  • Theory of Total Utility
  • Theory of Diminishing Marginal Utility
  • Theory of Equi-Marginal Utility
  • Theory of Diminishing Marginal Returns
  1. The Law of Equi-Marginal Utility applies because-
  • The Consumer will try to maximize his satisfaction
  • There may be substitute available in the market for every product
  • Consumer will substitute one item for the other such that his MU > Price.
  • All of the above
  1. As per the Ordinal Approach –
  • Measurement of utility is not possible through money
  • Measurement of Utility is possible but it can not be ranked
  • Measurement of Utility is not possible in Cardinal Numbers but it can be ranked
  • Measurement and ranking of Utility is possible
  1. Ordinal Utility Approach is also called –
  • Indifference Curve Approach
  • Hicks and Allen Approach
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. Which of the approaches helps to explain the Law of Demand?
  • Cardinal Approach
  • Ordinal Approach
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. A Rational person does not act unless –
  • The action is ethical.
  • The action leads to Marginal Costs that exceed Marginal Benefits.
  • The action produces Marginal Benefits that exceed Marginal Costs.
  • The action makes money for the person
  1. The Consumer will be willing to purchase an item, so long as the Marginal utility (additional satisfaction) derived is equal to the price of the commodity. This principle is called-
  • Consumer Equilibrium
  • Consumer Surplus
  • Consumer Advantage
  • Consumer Exploitation
  1. Consumer is in equilibrium and he keeps purchasing till the point –
  • Marginal Utility = Price
  • Marginal Utility = Zero
  • Marginal Utility = Negative
  • Marginal Utility = Quantity
  1. Consumer Surplus is the area –
  • Below the Demand Curve and above the price
  • Above the supply curve and below the price
  • Above the Demand curve and below the price
  • Below the supply curve and above the price
  1. Consumer Surplus can be best represented as –
  • What a consumer is ready to pay less what he actually not pays
  • What a producer actually produces less what he actually pays
  • What a consumer is ready to pay less what he actually pays
  • What a consumer is ready to pay willingly less what he is forced to pay
  1. The Concept of Consumer Surplus arises since for all earlier units purchased (i.e. prior to equilibrium point) –
  • MU < Price
  • MU = Price
  • MU > Price
  • MU = Zero
  1. The concept of consumer surplus arises due to the reason that –
  • MU is initially higher than price
  • MU is always equal to price
  • MU is initially lower than price
  • MU is always equal to zero
  1. If MU, is the Marginal Utility of product X and Px is the price of product X, a Rational Consumer will consume the Product X until –
  • MUx > Px
  • MUx < Px
  • MUx ≤ Px
  • MU x = Px
  1. At the point of Consumer’s Equilibrium –
  • Consumer’s Surplus is positive
  • Consumers’ surplus is zero
  • Consumers’ surplus is Negative
  • Any of these
  1. In the concept of consumer’s equilibrium and consumer’s surplus, for the quantity purchased at the equilibrium level-
  • Consumers’ surplus is positive
  • Consumers’ surplus is zero
  • Consumers’ surplus is negative
  • Any of these
  1. In the concept of consumer’s Equilibrium and Consumer’s Surplus, for the quantity purchased at the equilibrium level, Marginal utility is –
  • Positive
  • Zero
  • Negative
  • Equal to price
  1. For the quantity purchased at the consumer’s Equilibrium level, is –
  • Marginal Utility = Price
  • Consumers’ surplus is zero
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. A consumer consumed 3 units of a product. Marginal utilities derived from the first two units are Rs. 500 and Rs. 400. If the price of the product is Rs. 300 per unit and the consumer is in equilibrium at 3 units, the consumer surplus will be –
  • 300
  • 400
  • 500
  • Cannot be determined
  1. Consumer surplus is highest in the case of –
  • Necessities
  • Luxuries
  • Comforts
  • All of the above
  1. _____ consumer surplus indicates higher level of efficiency in the economy.
  • Higher
  • Lower
  • Balanced
  • Negative
  1. While analyzing Marshall’s measure of Consumer’s surplus, we assume –
  • Imperfect Competition
  • Perfect Competition
  • Monopoly
  • Monopsony
  1. Suppose that the price of a new bicycle is Rs. 3,000. Nathan values a new bicycle at Rs. 5,000. What is the value of Total Consumer Surplus if he buys a new bi-cycle?
  • 5,000
  • 3,000
  • 2,000
  • Nill
  1. Consumer’s surplus left with the consumer under price Discrimination is –
  • Maximum
  • Minimum
  • Zero
  • Not predictable
  1. Under which of the following market types will consumer’s surplus be generally minimum –
  • Perfect competition
  • Monopoly
  • Monopolistic competition
  • All of the above
  1. A monopolistic will try to consumer’s surplus to his advantage by adopting –
  • Price Rigidity
  • Price Exploitation
  • Price Discrimination
  • Price Equilibrium
  1. If the prices of ice-cream and chocolate are Rs. 40 and Rs. 30 respectively, and the Marginal Utility of chocolate is 150, what is the Marginal utility of ice-cream assuming that consumer is at equilibrium?
  • 5
  • 125
  • 200
  • 225
  1. Which among the following is the drawback of consumer surplus (as explained in Marginal Utility analysis)?
  • It is highly hypothetical and imaginary
  • It ignores interdependence between goods
  • It can not be measured in terms of money because marginal utility of money changes
  • All of the above
  1. In case of necessaries, the Marginal Utilities of the first few units are –
  • Infinite
  • Zero
  • There is no Marginal utility at all
  • Nothing can be said
  1. The consumer’s surplus derived from a product is …….. by the availability of substitutes.
  • Not affected
  • Affected
  • Nothing can be said
  • Substitutes are not available at all
  1. The concept of consumer’s surplus fails in case of articles which are used for their prestige value, e.g. Diamonds, etc. this statement is –
  • True
  • False
  • Partially true
  • Nothing can be said
  1. The concept of consumer’s surplus is based on the assumption that Marginal utility of money is
  • Zero
  • Negative
  • Constant
  • Any of the above
  1. The concept of consumer’s surplus adopts –
  • Cardinal approach only
  • Ordinal approach only
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. If we make the assumption that utility cannot be expressed in monetary terms, the concept of Consumer’s surplus –
  • Will still apply
  • Will not apply
  • Only producers’ surplus will arise
  • Nothing can be said
  1. The general assumption in consumer behavior under Indifference curve Analysis is that more goods are preferred to less of them. This statement is-
  • True
  • False
  • Partially true
  • Nothing can be said
  1. MRS is indicated by –
  • Slope of an IC at a particular point
  • Angle between IC and X axis
  • Angle between IC and Y axis
  • None of the above
  1. MRS indicates movement –
  • From lower IC to higher IC
  • From higher IC to lower IC
  • Along an IC
  • Any of the above
  1. Why does the Indifference Curve analysis approach operate?
  • MRS decrease as we go down the curve
  • MRS remains constant
  • MRS increases
  • Consumer surplus decreases
  1. Price line is also called –
  • Budget line
  • Budget constraint line
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. A point above the price line will be ….. the reach of the consumer, at his present levels of income and spending.
  • Beyond
  • Within
  • Either (a) or (b)
  • Neither (a) nor (b)
  1. As per indifference curve analysis, to maximize his satisfaction, a Consumer will try to –
  • Remain in the same IC
  • Reduce to a lower IC
  • Reach the highest possible IC
  • Reach the origin Point
  1. A consumer is at equilibrium when –
  • Slope of the price line is equal to indifference curve
  • He saves 30% of his income
  • Borrows an amount equal to his income from the bank
  • None of the above
  1. MUx of X is 40 and MUy of Y is 30. It the price of Y is Rs. 9 what will be the price of X at equilibrium?
  • 9
  • 30
  • 15
  • 12
  1. What will be the Marginal Utility of Product A, if the prices of A and B are Rs. 10 respectively, and the Marginal Utility of Product B is 50, assuming that the consumer is at equilibrium?
  • 100
  • 25
  • 250
  • 4
  1. The marginal utilities of Product A and Product B are 300 and 450 at equilibrium respectively. If the price of the product B is Rs. 60, what is the price of product A at equilibrium level?
  • 45
  • 90
  • 40
  • 50
  1. Under Income effect, the Consumer –
  • Moves along the original Indifference curve
  • Moves to higher or lower indifference curve
  • Always purchases higher quantities of both the commodities of both the commodities
  • None of the above.
  1. In consumer Equilibrium analysis under Indifference Curve approach, the consumer is assumed to spend his income …… on two goods.
  • Partly
  • Wholly
  • Either (a) or (b)
  • Nothing can be said

 

2.3 SUPPLY ANALYSIS AND EQUIIBRIUM PRICE

 

 

  1. Supply quantity is the same as Sales Quantity. This statement is –
  • True
  • False
  • Partially true
  • None of the above
  1. Supply refers to what firms offer for sale, and not necessarily to what they succeed in selling. This statement is –
  • True
  • False
  • Partially true
  • None of the above
  1. Stock is potential supply.
  • True
  • False
  • Partially true
  • None of the above
  1. Stock refers to quantity ____ into the market, whereas supply refers to quantity ____ into the market.
  • Actually brought, actually brought
  • Can be brought, actually brought
  • Can be brought, actually brought
  • Can be brought, can be brought
  1. Generally, supply of a product X will be _____ if the prices of goods other than X increase.
  • Equal
  • Lower
  • Greater
  • Zero
  1. Inventions and Innovations lead to –
  • Lower Cost of Production in existing products
  • Production of more or better goods
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. Generally, if there is an increase in commodity taxes (Excise Duty, Customs Duty, VAT, etc.) leading to increase in their cost of production, the supply quantity will-
  • Increase
  • Decrease
  • Remain constant
  • Become zero
  1. Which of the following is the determinant in the law of supply?
  • Technology
  • Price of related goods
  • Price of the product
  • None of the these
  1. What would be the shape of the supply Curve of the toys, if a seller offers to sell any number of toys as Rs. 100?
  • Vertical
  • Downward slopping
  • Horizontal
  • Upward sloping
  1. When there is a movement on the supply curve, we are referring to-
  • Change in supply
  • Change in quantity supplied
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. Change in Quantity supplied –
  • A movement on the same supply curve
  • Shift of the supply curve
  • Both (a) and (b)
  • Neither (a) nor (b)
  1. Given the Market Demand, the burden of specific tax that will be borne by the Consumer (Buyer) depends on the-
  • Price Elasticity of Supply
  • Price Elasticity of Demand
  • Consumer’s ability
  • Type of the Product
  1. If Price is Rs. 15, Quantity supplied is 150 units. If price is Rs. 25, quantity supplied is 300 units. Compute price Elasticity of Supply using Arc Method.
  • -1.09
  • +1.09
  • -0.98
  • +0.98
  1. When chance in the quantity supplied is proportionate to the change in the price, the product is said to have-
  • Unitary Elastic supply
  • Perfectly Elastic supply
  • Relatively Elastic Supply
  • Perfectly Inelastic supply
  1. If q = change in Quantity supplied, p = change in price, when supply is relatively inelastic, it means
  • q = zero
  • = p
  • q < p
  • p = zero
  1. Other things being equal, as Demand increase, Equilibrium price –
  • Decreases
  • Increases
  • Does not change at all
  • Cannot be commented upon.
  1. Other things being equal, as Demand increases, Quantity at the Equilibrium price level –
  • Increases
  • Decreases
  • Does not change at all
  • Cannot be commented upon
  1. Other things equal, as Demand decreases-
  • Equilibrium price and Quantity both increase.
  • Equilibrium price and Quantity both decrease.
  • Equilibrium price increase and quantity decreases.
  • Equilibrium price decreases and quantity increase.
  1. Other things being equal, as supply increases, quantity at the Equilibrium price level –
  • Increases
  • Decreases
  • Does not change at all
  • Cannot be commented upon
  1. Other things being equal, as Supply decrease.
  • Equilibrium price and Quantity both decrease.
  • Equilibrium price increases and Quantity decreases.
  • Equilibrium price decreases and quantity increases.
  • None of the above
  1. If decrease is demand is greater than decrease in supply, then the quantity at the Equilibrium price level –
  • Increases
  • Decreases
  • Does not change at all
  • Cannot be commented upon
  1. If increase in demand is equal to the increase in supply, then –
  • Equilibrium price and Quantity both increase.
  • Equilibrium price and quantity both decrease.
  • Equilibrium price remains the same but Quantity Increase.
  • Equilibrium Price remains the same but Quantity increases.
  1. If decrease in demand is equal to the decrease in supply, then –
  • Equilibrium price and Quantity both increase.
  • Equilibrium price and Quantity both decrease.
  • Equilibrium Price remains the same but Quantity increases
  • Equilibrium price remains the same but Quantity increases.
  1. If decrease in demand is less than the decrease in supply, then –
  • Equilibrium price and Quantity both increase.
  • Equilibrium price and Quantity both decrease.
  • Equilibrium price increase and Quantity decreases.
  • Equilibrium price decreases and Quantity increases.
  1. Which of the following situation does not lead to an increase in Equilibrium price?
  • A increase in demand, without a change in supply.
  • A decrease in supply accompanied by an increase in demand
  • A decrease in supply without a change in demand
  • An increase in supply accompanied by a decrease in demand.
  1. If the supply of a commodity is perfectly elastic, an increase in Demand will result in –
  • Decrease in both price and Quantity at equilibrium
  • Increase in both price and quantity at equilibrium
  • Increase in Equilibrium Quantity, Eq P unchanged
  • Increase in Equilibrium price, Eq Q unchanged
  1. If the supply of a commodity is perfectly elastic, a decrease in Demand will result in –
  • Decrease in both price and Quantity at equilibrium
  • Increase in both price and Quantity at equilibrium.
  • Decrease in Equilibrium Quantity, Eq P unchanged
  • Decrease in equilibrium price, equilibrium price, Eq Q unchanged.
  1. If the supply of a commodity is perfectly inelastic, an increase in Demand will result in –
  • Decrease in both price and quantity at equilibrium
  • Increase in both price and quantity at equilibrium
  • Increase in equilibrium Quantity, Eq P unchanged
  • Increase in equilibrium price, Eq Q unchanged
  1. If the supply of a commodity is perfectly inelastic, a decrease in demand will result in –
  • Decrease in both price and quantity at equilibrium
  • Increase in both price and quantity at equilibrium
  • Decrease in equilibrium Quantity, Eq P unchanged
  • Increase in equilibrium price, Eq Q unchanged
  1. If the demand of a commodity is perfectly elastic, an increase in supply will result in –
  • Decrease in both price and quantity at equilibrium
  • Increase in both price and quantity at equilibrium
  • Increase in equilibrium Quantity, Eq P unchanged
  • Increase in equilibrium price, Eq Q unchanged
  1. If the demand of a commodity is perfectly elastic, an decrease in supply will result in
  • Decrease in both price and quantity at equilibrium
  • Increase in both price and quantity at equilibrium
  • decrease in equilibrium Quantity, Eq P unchanged
  • decrease in equilibrium price, Eq Q unchanged
  1. if the Demand of a commodity is perfectly inelastic, an increase in supply will result in –
  • decrease in both price and quantity at equilibrium
  • increase in both price and quantity at equilibrium
  • increase in equilibrium quantity, Eq P unchanged
  • increase in equilibrium price, Eq Q unchanged
  1. if the demand of a commodity is perfectly inelastic, a decrease in supply will result in –
  • decrease in both price and quantity at equilibrium
  • increase in both price and quantity at equilibrium
  • decrease in equilibrium quantity, Eq P unchanged
  • decrease in Equilibrium price, Eq Q unchanged
  1. If a fisherman must sell all of his daily catch before it spoils for whatever price he is offered once the fish are caught. The fisherman’s price Elasticity of supply for fresh fish is –
  • Zero
  • Infinity
  • One
  • Cannot be determined

 


 

The below 4 Questions are based on the demand and supply diagrams below. S1 and D1 are the original demand and supply curves. D2, D3, S2 and S3 are possible new demand and supply curves. Starting from initial equilibrium point (1) what point on the graph is most likely to result from each change?

  1. Assume X is a Normal good. Holding everything else constant, assume that income rises and the price of a factor of production also increase. What point in figure 1 is most likely to the new equilibrium price and quantity?
  • Point 9
  • Point 5
  • Point 3
  • Point 2
  1. We are analyzing the market for good Z. The price of a complement good, good Y, declines. At the same time, there is a technological advance in the production of good Z. What point in Figure 1 is most likely to be the new equilibrium price and quantity?
  • Point 4
  • Point 5
  • Point 8
  • Point 7
  1. Heavy rains in Maharashtra during 2005 and 2006 caused havoc with the rice crop. What point in Figure 1 is most likely to be the new equilibrium price and quantity?
  • Point 6
  • Point 3
  • Point 7
  • Point 8
  1. The market of computers is not in equilibrium, then which of the following statements is definitely true?
  • The prices of computer will rises
  • The prices of computer will fall
  • The prices of computers will change, but not enough information is given to determine the direction of the change.
  • None of the above

 

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