Economics M.C.Q (1 Marks)

4. All of the above.

2. Price of the good falls, expenditure on it falls.

2. Downward sloping concave.

2. Complements.

4. Maximum.

1. Elastic.

3. Decrease in expenditure on it.

2. Goes on falling.

1. Shifts to the right.

4. Downward sloping straight line.

4. 1.5.

1. Consumer's real income increases.

2. Indifference set.

1. Some factors are constant.

3. Constant marginal utility of money.

2. Coffee and tea.

2. Tea and coffee.

1. It is convex to the origin.

3. Indifference curve is concave to origin.

1. Law of Marginal Utility does not operate.

Explanation:

Law of diminishing marginal utility operates which implies that marginal utility must decline as more of a commodity is consumed by consumer. So, the consumer compares its satisfaction with monetary payment for getting maximum satisfaction.

4. All of the above.

4. All of the above.

Explanation:

These commodities are included in veblen goods which are demanded more even at very high prices, i.e. where law of demand does not operate.

2. Marginal utility is zero.

1. Decreasing.

3. Zero.

1. Greater than unity.

4. Price effect.

1. Zero price elasticity.

1. Increase in demand.

1. Increase in demand.

1. Perfectly elastic demand.

2. Steeper.

1. Flatter.

3. More than unitary elastic demand.

2. Elastic.

4. less than unitary elastic.

1. Law of variable proportions.

3. Maximum.

1. Shifts to the right.

1. Shifts to the right.

3. The satisfaction gained from consuming the good.

2. Contraction of demand.

1. Unity.

1. Negative.

2. Greater than average product.

1. Total output will begin to fall.

2. Zero.

4. Infinity.

3. Increasing.

2. Unity.

1. MU becomes zero.

2. Total Utility.

3. TR = TC

3. Fall in the price of complementary good.

4. All of the above.

4. Both (a) and (b).

3. Ed > 1

3. AR = MR = MC and MC must be rising.

1. Marginal utility is zero.

2. Zero and infinity.

2. Marginal rate of substitution.

2. Marginal rate of substitution.

3. Law of diminishing utility.

1. MRS.

3. Substitutes.

1. X and Y are substitutes.

2. Quantity demanded to a change in price.

2. The percentage increase in the quantity demanded of hamburger when the price of hamburger falls by 1 percent per rupee.

2. Unattainable points.

2. Price of goods and the quantity demanded.

3. Market demand curve.

4. Both (b) and (c).

3. Is tangent to an indifference curve.

1. Zero to infinity.

2. Shift towards right.

3. Change in demand due to factors other than the change in own price of the commodity.

4. Total utility.

2. Inversely related.

3. Infinity.

1. Zero.

4. Perfectly inelastic.

1. Perfectly elastic.

4. 20%

Explanation:

Price elasticity of demand:

= __________________________

= ___________________

% change (fall) in price = ______ =

2. Increase; decreases.

2. Average product.

1. Equal to unity.

2. Price elasticity of demand.

1. Move to a higher demand curve.

1. Zero.

3. begins to decrease.

2. Giffen goods.

2. Qualitative statement.

2. Qualitative statement.

4. All of the above.

3. Consumer's budget.

1. Cardinal utility analysis .

1. Minimum difference between TR and TC.

2. A cardinal concept.

2. Constant.

1. Less elastic.

1. Negative.

1. Constant Marginal Rate of Substitution.

3. Equal satisfaction.

Explanation:

Indifference curve is a curve showing different combinations of two goods, each combination offering the same level of satisfaction.

2. An indifference set.

3. ₹ 12

1. A negative slope.

2. Reduce the demand.

2. Positive.

4. Upward-sloping to the right.

4. Both(a) and (c).

2. 1

1. X and Y are equally preferred.

1. Substitutes.

1. Substitutes.

2. Fall in demand for the other.

4. Coke and 7-UP will decrease.

1. Demand curve shifts to left.

1. Shift rightward.

Explanation:

Due to increase in income, purchasing power of the consumer will increase, as a result his budget line will shift rightward.

2. MUx = Px

2. Vertical.

1. Decrease.

2. Downward sloping concave.

2. Downward sloping concave.

4. Downward sloping straight line.

4. Downward sloping straight line.

4. Downward sloping straight line.

3. MRS is constant.

2. Complements.

2. Complements.

2. Price elasticity of demand is less than unity.

1. Perfectly elastic.

4. More than unitary elastic.

Explanation:

The demand for commodities having more close substitutes is more than unitary elastic as whenever their price increases, people will start buying their substitute goods.

2. Law of Equi-marginal Utility.

2. Its low price.

3. Smaller than one.

1. Decrease because both the goods are complementary.

1. DX = f (PX), ceteris paribus.

1. Substitute goods.

3. both at optimal level.

1. Higher level of satisfaction.

1. The demand for good Y will decrease and for Z it will increase.

1. Giffen goods.

1. Convex to the origin.

1. Law of Demand.

1. All of the above.

4. All of the above.

2. Downward movement on the demand curve.

3. Change in the taste and preference of the buyer.

4. Perfect competition.

1. Elastic demand.

2. Normal goods.

4. Essentials.

3. Shift rightwards.

2. MR = MC

1. Indifference curve.

4. All of these.

4. All of the above.

2. It is necessity.

3. It has many uses.

4. Quantity of the commodity demanded at a certain price during any particular period of time.

2. Increase in the price of goods concerned.

2. Ordinal utility approach.

1. Right angled triangle formed by the budget line with the axes.

1. Price ratio.

3. 1

1. Constant.

2. Goes on falling.

1. Increases less than in proportion, reaches a maximum and then falls.

1. Shifts to the left.

3. Inferior good.

1. Strictly preferred bundle.

4. All of the above.

1. Same satisfaction.

1. Choice and preferences of the consumer.

3. A change in quantity demanded.

2. The same total expenditure.

2. Quantity supplied.

3. Price.

2. Marginal utility.

2. 4

4. Does not shift.

4. Does not shift.

2. Less than the consumption of first slice.

1. There exists negative relationship between quantity demanded and price of a commodity.