MCQs - Theory Of Demand Commerce Notes | EduRev

Crash Course of Micro Economics -Class 12

Commerce : MCQs - Theory Of Demand Commerce Notes | EduRev

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Q.1 Among the following pairs of goods, choose the inconsistent or odd one out:

(a) Bread & butter
(b) Coke and Pepsi
(c) Tea and sugar
(d) Car & Petrol
Ans: B

Q.2 
Which of the following statements is correct with reference to the statement given ? With a fall in the price of outgoing calls in mobile
(a) Demand for mobile phones will decrease  

(b) Quantity demanded for outgoing calls will expand.

(c) Demand for land line phones will expand

(d) All of the above.
Ans: B

Q.3 
Income effect in case of inferior quality goods will be

(a) Positive
(b) Negative
(c) Zero
(d) One
Ans: B

Q.4 
With a fall in temperature, the demand of cotton shirts may, generally ______

(a) Increase
(b) Decrease
(c) No change
(d) None of the above
Ans: A

Q.5 What will be the likely value of price elasticity of demand if demand for Good-X doubles due to a 25% fall in price.

(a) Unity
(b) More than unity
(c) Less than unity
(d) Zero
Ans: B

Q.6 
In case of normal goods, the relationship between income and quantity demanded is:

(a) Negative
(b) Positive
(c) Zero
(d) Infinite
Ans: B

Q.7 
In case of a normal good, the relationship between own price of the commodity and its quantity demanded is:

(a) Constant
(b) Inverse
(c)  Positive
(d) None of these
Ans: B

Q.8 
There is a mass campaigning against the consumption of tobacco in the country. What is likely to be its impact on its market demand ? (Choose the correct alternative)

(a) Increase
(b) Fall
(c) Remain constant
(d) None
Ans: C

Q.9 
Goods X and Y are complementary while goods X and Z, are substitutes.  What will happen to goods Y and Z if price of good X increases:
(a)The demand for good Y will decrease and for Z it will increase
(b)The demand for both goods Y and Z will decrease

(c)The demand for both goods Y and Z will increase

(d) The demand for good Y will increase and for Z it decrease
Ans: A

Q.10 
How will the demand of sugar change if price of tea rises?

(a) Decrease because both the goods are complementary

(b) Increase because both the goods are substitutes

(c) Not change unless the price of sugar changes

(d) None of the above
Ans: A

Q.11 
The price of good X and the quantity demanded of Y bear a positive relationship between each other.  What could be the reason behind that ?
(a) X and Y are substitutes

(b) X and Y are complementary goods

(c) Y is an inferior good while X is an normal good
(d) None of the above
Ans: A


Q.12 Suppose the demand for meals at a medium priced restaurant is elastic. If the management of the restaurant is considering raising prices, it can expect a relatively :

(a) large fall in demand
(b) small fall in quantity demanded

(c) small fall in demand
(d) large fall in quantity demanded
Ans: D

Q.13 
From the given demand schedule, determine the effect on demand curve:

Price Rs.          20    20

Demand (Units)    100   70

(a) Rightward Shift in demand curve
(b) Leftward Shift in Demand curve

(c) Upward Movement along the demand curve
(d) Downward Movement
Ans: B

Q.14 
There is a sudden change in climatic conditions resulting in hot weather.  Assuming no change in the price of the cold drinks, it will lead to:

(a) Rightward Shift in demand curve
(b) Leftward Shift in Demand curve

(c) Upward Movement along the demand curve
(d) Downward Movement
Ans: A

Q.15 
The demand function of a product X is given as: Dx = 12 – 2 Px, where Px stands for price. The demand at price of Rs. 2 will be:

(a) 6
(b) 8
(c) 5
(d) 10
Ans: B

Q.16 
The demand function of a product X is given as: Dx = 20 – 3 px, where px stands for price. If an individual Y has a demand of 8 units, then market price of the product is:

(a) Rs. 4
(b) Rs. 5
(c) Rs. 3
(d) Rs. 4.5
Ans: A

Q.17 
Which will change only the quantity demanded of pizza?  

(a) an increase in the population
(b) a change in the price of pizza
(c) a change in the price of burger
(d) a decrease in the income of consumers
Ans: B

Q.18 
Which of following is a demand function ?

(a) D = f(P)
(b) S = f(P)
(c) C = f(Q)
(d) None of these
Ans: A

Q.19 
Law of demand must fail in case of :

(a) normal goods
(b) Giffen goods

(c) inferior goods
(d) none of these
Ans: B

Q.20 
As a result of rise in consumer’s income, demand curve for coarse grain (inferior good):
(a) becomes a horizontal straight line
(b) becomes a vertical straight line
(c) shifts to the right
(d) shifts to the left
Ans: D

Q.21 
An increase in the price of electricity will cause the demand for electric appliances to:
(a) rise
(b) fall
(c) remain the same
(d) none of these
Ans: B

Q.22 
Law of demand is violated when:

(a) income effect is negative
(b) substitution effect is negative

(c) negative income effect is greater than substitution effect

(d) negative income effect is less than substitution effect.
Ans: C

Q.23 
A fall own price of the commodity leads to:

(a) increase in real income of the consumer

(b) decrease in real income
(c) increase in purchasing power of the consumer

(d) both (a) and (c)
Ans: D


Q.24 
Substitution effect takes place when price of the commodity becomes:
(a) relatively cheaper
(b) relatively dearer
(c) stable
(d) bothe (a) and (b)
Ans: D

Q.25 
Suppose an excise tax is imposed on good X.  We would expect this tax to:

(a) Increase the demand for complementary good Y & decrease the demand for substitute good Z.

(b) Decrease the demand for complementary good Y & increase the demand for substitute good Z.

(c)  Increase the demand for both complementary good Y and substitute good Z.

(d) Decrease the demand for both complementary good Y and substitute good Z.
Ans: B

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