Assuming Other Things To Be Equal

Assuming other things to be equal, if a
good has more substitutes, its price

elasticity of demand is _____________.
Question 1Answer
a.
Larger
b.
Smaller
c.
Zero
d.
Unity
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Question 2
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Supply curve will shift when
_______________.
Question 2Answer
a.
Price falls
b.
Price rises
c.
Demand shifts
d.
Technology changes
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Question 3
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How does managerial economics
contribute to the development of decision-
making skills?
Question 3Answer
a.
By providing a rigid set of rules for every
business situation.
b.
By ignoring the complexities of real-world
business environments.
c.
By helping managers identify key factors
and relationships.
d.
By eliminating the need for critical thinking
and analysis.
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Question 4
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Normally a demand curve will be
_____________.
Question 4Answer
a.
Horizontal
b.
Vertical
c.
Downward sloping
d.
Upward sloping
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Question 5
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Normally a supply curve will be
_________________.
Question 5Answer
a.
Horizontal
b.
Vertical
c.
Downward sloping
d.
Upward sloping
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Question 6
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Law of demand shows the relationship
between ________________.
Question 6Answer
a.
Income and price of commodity
b.
Price and quantity of a commodity
c.
Income and quantity demand
d.
Quantity demanded and quantity supplied
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Question 7
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When cross elasticity of demand is a large
positive number, it can be concluded that
_________________.
Question 7Answer
a.
The good is normal
b.
The good is inferior
c.
The good is a substitute
d.
The good is a complement
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Question 8
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If the quantity demanded is completely
unresponsive to changes in price, demand
is ______________.
Question 8Answer
a.
Inelastic
b.
Unit elastic
c.
Elastic
d.
Perfectly inelastic
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Question 9
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Which of the following is an assumption of
law of demand?
Question 9Answer
a.
Price of the commodity should not change
b.
Quantity should not change
c.
Supply should not change
d.
Income of consumer should not change
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Question 10
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Which of the following is the most direct
determinant of individual demand?
Question 10Answer
a.
Income
b.
Tastes and preferences
c.
Price
d.
Population
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Question 11
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In May 2023, a firm was supplying 500kg
of sugar of market price of Rs. 30/- per kg.
During June 2023, the firm's supply of
sugar had decreased to 450kg at price Rs.
20/- per kg. These changes show that
supply of sugar is _________.
Question 11Answer
a.
Perfectly elastic
b.
Perfectly inelastic
c.
Relatively Elastic Demand
d.
Relatively Inelastic Demand
Clear my choice
Question 12
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If price changes by 1% and supply changes
by 2%, then supply is said to be
__________________.
Question 12Answer
a.
Elastic
b.
Inelastic
c.
Indeterminate
d.
Static
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Question 13
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In ______________, a large change in price
leads to less proportionate change in
demand.
Question 13Answer
a.
Perfectly Elastic Demand
b.
Perfectly Inelastic Demand
c.
Relatively Elastic Demand
d.
Relatively Inelastic Demand
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Question 14
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When a government imposes a tax on a
product with inelastic demand, the burden
of the tax is primarily borne by:
Question 14Answer
a.
The government
b.
The producers
c.
The consumers
d.
Both producers and consumers equally
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Question 15
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An increase in the price of a key input
used in production will likely:
Question 15Answer
a.
Shift the supply curve to the right
b.
Shift the supply curve to the left
c.
Cause a movement along the supply curve
d.
Have no effect on the supply curve
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Question 16
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If a producer decides to increase
production due to higher prices, this is
represented by:
Question 16Answer
a.
A shift in the supply curve to the left
b.
A movement along the supply curve
c.
a rightward shift in the supply curve
d.
a leftward shift in the supply curve
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Question 17
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Price elasticity of demand can be a useful
tool for businessmen in: 1. Wage
determination 2. Monopoly price
determination 3. International trade
Question 17Answer
a.
1 and 2 only
b.
2 and 3 only
c.
1, 2 and 3
d.
1 and 3 only

Assuming Other Things To Be Equal

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Assuming Other Things To Be Equal

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Assuming other things to be equal, if a

good has more substitutes, its price

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