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Test: Market Equilibrium - 2


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20 Questions MCQ Test Economics Class 12 | Test: Market Equilibrium - 2

Test: Market Equilibrium - 2 for Commerce 2022 is part of Economics Class 12 preparation. The Test: Market Equilibrium - 2 questions and answers have been prepared according to the Commerce exam syllabus.The Test: Market Equilibrium - 2 MCQs are made for Commerce 2022 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Market Equilibrium - 2 below.
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Test: Market Equilibrium - 2 - Question 1

Deficient demand occurs when

Detailed Solution for Test: Market Equilibrium - 2 - Question 1

Deficient demand refers to the situation when aggregate demand (AD) is less than the aggregate supply (AS) corresponding to full employment level of output in the economy.

Test: Market Equilibrium - 2 - Question 2

At Equilibrium price

Test: Market Equilibrium - 2 - Question 3

The equilibrium price is determined by

Test: Market Equilibrium - 2 - Question 4

Market equilibrium is a situation when

Test: Market Equilibrium - 2 - Question 5

The factor that causes a change in quantity demanded is

Test: Market Equilibrium - 2 - Question 6

The factor that causes a change in quantity supplied is

Test: Market Equilibrium - 2 - Question 7

The factor that causes a change in demand is

Test: Market Equilibrium - 2 - Question 8

The factor that causes a change in supply is

Detailed Solution for Test: Market Equilibrium - 2 - Question 8

Supply is not constant over time. It constantly increases or decreases. Whenever a change in supply occurs, the supply curve shifts left or right. There are a number of factors that cause a shift in the supply curve: input prices, number of sellers, technology, natural and social factors, and expectations

Test: Market Equilibrium - 2 - Question 9

A rise in the price of the complementary good leads to

Detailed Solution for Test: Market Equilibrium - 2 - Question 9

Complementary good or complement is a good with a negative cross elasticity of demand, in contrast to a substitute good. This means a good's demand is increased when the price of another good is decreased. ... When two goods are complements, they experience joint demand.
A complementary good is a good whose use is related to the use of an associated or paired good. Two goods (A and B) are complementary if using more of good A requires the use of more of good B. For example, the demand for one good (printers) generates demand for the other (ink cartridges).

Test: Market Equilibrium - 2 - Question 10

An imposition of tax on a good leads to

Detailed Solution for Test: Market Equilibrium - 2 - Question 10

The correct option is C.

Supply of goods are inversely related with cost of production. This means higher the cost of production , lower will be supply of goods as the profits will reduce. Increase in taxes will increase cost of production and reduce the profits for the firms  , so they will supply less goods .Hence the supply curve will shift towards the left. Also since the prices of the goods will increase, demand for goods will decrease. Hence the demand curve will shift towards the left.

Test: Market Equilibrium - 2 - Question 11

A fall in the price of the good for a seller leads to

Detailed Solution for Test: Market Equilibrium - 2 - Question 11

Price is what the producer receives for selling one unit of a good or service. A rise in price almost always leads to an increase in the quantity supplied of that good or service, while a fall in price will decrease the quantity supplied.

Test: Market Equilibrium - 2 - Question 12

Unfavorable change in the taste for a good leads to

Detailed Solution for Test: Market Equilibrium - 2 - Question 12

The demand curve contracts due to changes in price.The correct option is D.

Test: Market Equilibrium - 2 - Question 13

Market for a good is in equilibrium. An increase in demand for the good will

Detailed Solution for Test: Market Equilibrium - 2 - Question 13

The correct option is A.

Market for a good is in equilibrium . This means that demand for good is equal to supply of good at a given price. So if the demand increases then the supply fails to meet the whole demand, as a result the supply is less than demand. So the prices will increase so that demand decreases and demand is met by supply.

Test: Market Equilibrium - 2 - Question 14

Market for a good is in equilibrium. A decrease in demand for the good will

Test: Market Equilibrium - 2 - Question 15

Market for a good is in equilibrium. An increase in supply for the good will

Detailed Solution for Test: Market Equilibrium - 2 - Question 15

According to basic economic theory, the supply of a good will increase when its price rises. Conversely, the supply of a good will decrease when its price decreases. There's also price elasticity of demand. This measures how responsive the quantity demanded is affected by a price change.

Test: Market Equilibrium - 2 - Question 16

Market for a good is in equilibrium. A decrease in supply for the good will

Detailed Solution for Test: Market Equilibrium - 2 - Question 16

A decrease in demand and an increase in supply will cause a fall in equilibrium price, but the effect on equilibrium quantity cannot be determined. ... For any quantity, consumers now place a lower value on the good, and producers are willing to accept a lower price; therefore, price will fall.

Test: Market Equilibrium - 2 - Question 17

Market for a good is in equilibrium. An increase in demand for the good will

Detailed Solution for Test: Market Equilibrium - 2 - Question 17

Increases in demand are shown by a shift to the right in the demand curve. This could be caused by a number of factors, including a rise in income, a rise in the price of a substitute or a fall in the price of a complement.

Test: Market Equilibrium - 2 - Question 18

Market for a good is in equilibrium. An increase in supply for the good will

Test: Market Equilibrium - 2 - Question 19

Market for a good is in equilibrium. An increase in the price of the good will

Detailed Solution for Test: Market Equilibrium - 2 - Question 19

Test: Market Equilibrium - 2 - Question 20

Market for a good is in equilibrium. A decrease in price for the good will

Detailed Solution for Test: Market Equilibrium - 2 - Question 20

When only price will decrease or increase then moment will occur and other factors being constant.

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