Theory of Demand and Supply 0 Theory of Demand and Supply 1 / 26 Q.30 In an indifference map, higher IC indicates: lower level of satisfaction same level of satisfaction higher level of satisfaction either same or higher level of satisfaction 2 / 26 Q.29 A locus of constant utility is called the expansion path utility function indifference curve demand function 3 / 26 Q.27 If MUx >Px , then consumer- is not at equilibrium he will buy more of X good he will buy less of X good both 'a' and 'b' 4 / 26 Q.26 MU curve of a consumer is also his _____ indifference curve total utility curve supply curve Deman curve 5 / 26 Q.25 Total Utility is _____, when marginal utility ispositive maximum diminishing increasing minimum 6 / 26 Q.24 If the price elasticity of demand is ZERO, it on the commodity may _____ with the change in price of the commodity. increase decrease increase or decrease remain constant 7 / 26 Q.23 The devaluation of currency would increase the export earnings only when demand for the nation's exports in foreign market is- Elastic Inelastic Perfectly Inelastic Unitary Elastic 8 / 26 Q.22 The demand for common salt has low price elasticity because- it has no close substitute it is necessity it constitutes only a small proportion of consumer's expenditure all the above 9 / 26 Q.21 Which curve is called rectangular hyperbola? Highly Elastic Demand Curve Less Elastic Demand Curve Unitary Elastic Demand Curve None of the above 10 / 26 Q.18 When same quantity of a good is demanded at a lower price, it is known as- Extension of Demand Increase in Demand Contraction of Demand Decrease in Demand 11 / 26 Q.17 The market demand curve in case of Snob Effect is _____. flatter steeper less elastic both ‘b’ and ‘c’ 12 / 26 Q.16 . When the quantity of a commodity that an individual buyer demand falls in response to the growth of purchases by other buyers, such an effect is called _____. Bandwagon Effect Snob Effect Veblen Effect None of the above 13 / 26 Q.15 A relative price is- price expressed in terms of money what you get paid for babysitting your cousin the ratio of one price to another equal to a money price 14 / 26 Q.14 When demand of any good reacts immediately to price changes, income changes, etc. it is said to have _____ demand. short-run long-run very short run very long run 15 / 26 Q.13 The goods which cannot be consumed more than once, like milk are known as _____ goods. non-durable consumer goods producer's inferior durable consumer goods 16 / 26 Q.12 _____ goods are those goods which are used for the production of other goods. Durable Producer's Non-Durable Consumer's 17 / 26 Q.11 Indirect demand of a good is also known as _____ demand. direct derived joint competitive 18 / 26 Q.10 An increase in the supply of a good is caused by Improvements in its technology Fall in the prices of other goods Fall in the price of factors of production All the above 19 / 26 Q.9 A vertical supply curve parallel to Y axis implies that the elasticity of supply is Greater than zero but less than infinite Equal to one Infinite Zero 20 / 26 Q.8 Given the following four possibilities ,which one results in an increase in total consumer expenditure ? Demand is unitary elastic & price falls Demand is elastic & price rises Demand is inelastic & price falls Demand is inelastic & price rises 21 / 26 Q.7 Which assumptions implies the consumer aims at utility maximization ? a rationality ordinarily cardinality None of these 22 / 26 Q.6 When MU is zero , TU is minimum maximum rising falling 23 / 26 Q.5 Convex indifferent curve is explained by increasing MRS diminishing MRS diminishing MRS None of these 24 / 26 Q.4 What kind of goods has elastic demand inferior goods normal goods luxury goods necessity goods 25 / 26 Q.3 When the no.of uses of the purchase goods is less price elasticity of demand is High low infinity zero 26 / 26 Q.2 If there is no change in quantity demanded to any charge in price then elasticity of demand is & shape of demand curve is infinity elastic; horizontal demand curve zero, vertical demand curve less than one, downward sloping demand curve zero than one horizontal downward sloping demand curve Your score is LinkedIn Facebook Twitter VKontakte