Top 350+ Solved Micro Economics 1 MCQ Questions Answer
Q. From the position of stable equilibrium, the market supply of a commodity decreases, while the market demand remains unchanged, then:
a. Equilibrium price falls
b. Equilibrium quantity rises
c. Both equilibrium price and equilibrium quantity decreases
d. Equilibrium price rises, but equilibrium quantity falls
Q. If the percentage increase in the quantity demanded of a commodity is smaller than the percentage fall in its price, the coefficient of price elasticity:
a. Greater than one
b. Equal to one
c. Smaller than one
d. Zero
Q. A fall in the price of the commodity whose demand curve is a rectangular hyperbola causes total expenditure on the commodity:
a. Increases
b. Decreases
c. Remains unchanged
d. None of the above
Q. If the quantity demanded remains unchanged as the price of the commodity falls, the coefficient of price elasticity of demand is
a. Greater than One
b. Equal to one
c. Smaller than one
d. Zero
Q. An increase in the price of the commodity when demand is inelastic causes the total expenditure of consumers of the commodity to:
a. Increase
b. Decrease
c. Remains unchanged
d. Any of the above
Q. A negative income elasticity of demand for a commodity indicates that as income falls, the amount of the commodity purchased:
a. Rises
b. Falls
c. Remains unchanged
d. None of the above
Q. If the income elasticity of demand is greater than one, then the commodity is:
a. Necessity
b. Luxury
c. Inferior
d. Non-related commodity
Q. If the income elasticity of demand for a commodity is found to be 0.4, then the commodity concerned is
a. Luxury
b. Necessity
c. Giffen’s goods
d. Independent good
Q. Elasticity of supply for a positively sloped straight line supply curve that intersects the price axis is:
a. Equal to zero
b. Equal to one
c. Greater than one
d. Constant
Q. If a positively sloped linear supply curve crosses the quantity axis, the elasticity of supply is:
a. Inelastic
b. Elastic
c. Unitary elastic
d. Perfectly elastic
Q. If a positively sloped linear supply curve passes through the origin, the elasticity of supply is:
a. Inelastic
b. Elastic
c. Unitary elastic
d. Perfectly elastic
Q. The horizontal supply curve parallel to quantity axis represents:
a. Elastic supply
b. Inelastic supply
c. Perfectly elastic supply
d. Perfectly inelastic supply
Q. A fall in income of the consumer, other things being equal, causes:
a. Increase in demand
b. Decrease in demand
c. Increase in quantity demanded
d. Decease in quantity demanded
Q. Which of the following causes an increase in supply:
a. Fall in price of inputs
b. Increase in number of producers
c. Decrease in the price of production substitutes
d. All of the above