Micro

MCQ
1) when price of a good falls, the impact on demand curve of its substitute good is indicated
by:
A) a shift in demand curve to the right
B) A shift in demand curve to the left
C) An upward movement along the curve
D) A downward movement along the demand curve

2) when own price of a commodity rises, the impact on demand curve is indicated by:
A) a shift in demand curve to the right
B) A shift in the demand curve to the left
C) An upward movement along the curve
D) A downward movement along the curve

3) Change in quantity demanded of a commodity due to change in real income of the consumer
caused by change in own price of the commodity is called:
A) cross price effect
B) Price effect
C) Income effect
D) Substitution effect

4) An increase in the price of the computer will cause the demand for internet services to:
A) Rise
B) Remain the same
C) Fall
D) None of these

5) When income Of the consumer rises in case of a normal good:

A) demand curve shifts to the left
B) Demand curve shifts to the right
C) There is upward movement along the demand curve
D) There is downward movement along the demand curve

6) In case of inferior goods:

A) income effect is negative
B) Income effect is positive
C) Income effect is zero
D) None of these
Very short answers( one mark each)
7) Ceteris Paribus,if the government provides subsidies on electricity bills, what would be the
likely change in the market demand for desert coolers?

8)State any two problems under problem of allocation of resources?

9) Define Giffen goods?

10) when does increase in demand take place?

11) When does change in demand takes place?

Short Answers (3 marker each)

12) How is Price elasticity of demand affected by:
a) Availability of substitutes
b) Multiple uses of a commodity

13) Price elasticity of demand of Good X is -2 and of Good Y is -3. Which of the goods is more
price elastic and why?

14) What will be the effect of 10% rise in price of a good on its demand if the price elasticity of
demand is
a) zero
b) -1
c) -2

Short answers (4 marks each)

15) Income effect is generally positive,but not always.comment with an illustration.

16) state whether the following statements are True or False.justify your statement.
A) In the case of inferior goods substitution effect does not prevail
B) Giffen goods are different from inferior goods

17) Define demand .Name the factors affecting market demand.

18) A consumer buys 10 units of a commodity at a price of Rs.10 per unit.He incurs Expenditure
of Rs.400 on buying 40 units. Calculate price elasticity of demand by the percentage method.
Comment upon the likely shape of demand curve based on this information.
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