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Eco MCQ

This document contains questions from 8 sections on economics topics: 1. Business economics and key economic thinkers 2. Demand, determinants of demand, and the demand curve 3. Elasticity of demand and supply 4. Forecasting methods like trend analysis and expert surveys are used to predict future demand.

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Vishesh Bhatia
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51 views

Eco MCQ

This document contains questions from 8 sections on economics topics: 1. Business economics and key economic thinkers 2. Demand, determinants of demand, and the demand curve 3. Elasticity of demand and supply 4. Forecasting methods like trend analysis and expert surveys are used to predict future demand.

Uploaded by

Vishesh Bhatia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

Economic Analysis

Q1) Business economics is also known_______


a. Decisional Economics
b. Analytical Economics
c. Managerial Economics
d. Decision Science
Answer: c

Q2) ________ is considered the father of modern economics.

a. Adam Smith
b. J M Keynes
c. Karl Marx
d. Warren Buffet
Answer: a

Q3) _________ is the study of economics actions of individuals and small group of individuals
a. Microeconomics
b. Macroeconomics
c. Social Economics
d. Business Economics
Answer: a

Q4) Microeconomics focuses on all of the following EXCEPT


a. The effect of increasing the money supply on inflation.
b. The purchasing decisions that an individual consumer makes.
c. The effect of an increase in the tax on cigarettes on cigarette sales.
d. The hiring decisions that a business makes.
Answer: a
Q5) In economics the central problem is:
a. Money.
b. Scarcity
c. Allocation.
d. Production.
Answer: b

2. Demand
Q1) Movement in demand curve is caused due to ______
a. Price of the own commodity
b. Income of the consumer
c. Future price expectations
d. Price of related goods
Answer: a

Q2) ______ is a tabular representation that shows quantity demanded of a particular commodity at
different price levels.

a. Line Graph
b. Demand curve
c. Demand schedule
d. Elasticity of demand
Answer: c

Q3) Increase in demand due to decrease in price leads to _______


a. Upward movement along the demand curve
b. Downward movement along the demand curve
c. Rightward shift of demand curve
d. Leftward shift of demand curve
Answer: a
Q4) Demand curve is negatively sloped due to ______
a. Exceptions to law of demand
b. Income of consumer
c. Bandwagon effect
d. Inverse relationship of price and quantity demanded
Answer: d

Q5) What causes the demand curve to shift?


a. Price of own commodity
b. All determinants of demand except price of own commodity
c. Giffen goods
d. Emergencies
Answer: b

3. Determinants of Demand, Demand Function


Q1) California is a major immigration centre for Russians. Over 10,000 Russians are living in
California now. What demand does this determine?

a. Change in Consumer Income


b. Change in Consumer Tastes
c. Change in Consumer Price Expectations
d. Change in Number of Consumers in the Market
Answer: d

Q2) Cookies of brand A are now extremely expensive to purchase. Instead of buying Brand A
cookies, people now want to buy cookies of Brand B. What determinant of demand does this likely
fall under?
a. Change in Price of Complementary Good
b. Change in Price of Substitute Good
c. Change in Consumer Price Expectations
d. Change in Number of Consumers in the Market
Answer: b
Q3) The government is giving every individual of age 18 and above an extra $1,000 this year. What
determinant of demand does this likely fall under?
a. Change in Consumer Tastes
b. Change in Consumer Price Expectations
c. Change in Number of Consumers in the Market
d. Change in Consumer Income
Answer: d

Q4) I know that the iPhone 14 is coming out next year but really need a phone badly. I'm thinking
about buying an iPhone 13 when the new iPhone comes to the market because it will be much cheaper
than today's price. What determinant of demand does this suggest?
a. Change in Price of Complementary Good
b. Change in Future Price Expectations
c. Change in Number of Consumers in the Market
d. Change in Consumer Income
Answer: b

Q5) Determinants of demand include income, expectations, taste and


a. Consumer Preference
b. Taxes
c. Marginal equity
d. Unit Elasticity
Answer: a

4. Law of Demand
Q1. The law of demand states, with increase in price there is
a. decrease in quantity demanded
b. increase in quantity demanded
c. decreased demand
d. increased demand
Answer: a
Q2. The following would cause a direct change in the quantity demanded for a product?
a. Changing prices of related products
b. Changing consumer tastes
c. Increasing consumer income
d. Decreasing price of product
Answer: d

Q3. Increase in demand can occur due to:


(a) Increase in income of the consumer
(b) Decrease in price of the complementary good
(c) Increase in price of the substitutes
(d) All of these
Answer: d

Q.4 The Law of Demand is measured from the perspective of


a. Consumer
b. Shopkeeper
c. Wholesaler
d. Manufacturer
Answer: a

Q.5 Goods for which demand goes down when income goes up are called
a. Public Goods
b. Inferior Goods
c. Normal Goods
d. Private Goods
Answer: b

5. Elasticity of Demand

Q1) Price elasticity of demand is best defined as:

a. Change in the tastes of consumers at different prices.


b. Change in demand when income of the consumer increases
c. The rate of response of demand to a change in price
d. The rate of response of demand to change in price of related goods
Answer: c

Q2) A negative sign with coefficient of price elasticity of demand denotes:

a. Direct relation between price and quantity demanded


b. Inverse relation between price and quantity demanded
c. No relation between price and quantity demanded
d. None of these

Answer: b

Q3) Factors determining price elasticity of demand include:

I. Nature of the commodity


II. Number of substitutes
III. Goods having several uses
IV. Durable Goods and perishable goods
V. Price Level, Income Level
VI. Consumer’s Loyalty

a. (I) (III) and (V) only


b. (III) (IV) and (V) only
c. All of the above
d. None
Answer: c

Q4) Demand is inelastic if


a. A large change in quantity demanded results in a small change in price.
b. The price elasticity of demand is greater than 1.
c. The quantity demanded is very responsive to changes in price.
d. The price elasticity of demand is less than 1
Answer: d

Q5) Which of the following will have elastic demand?


a. Medicine
b. Books
c. Vegetables
d. Washing Machine
Answer: d

6. Supply
Q1) Which of the following is not a determinant of supply?
a. Price of the goods
b. Time
c. Government Policy
d. Income of buyer
Answer: d

Q2) What happens when supply of a product is decreased?


a. Upward movement along the supply curve
b. Downward movement along the supply curve
c. Demand curve shifts to the right
d. Demand curve shifts to the left
Answer: d

Q3) An increase in quantity supplied is caused by


a) Decrease in price
b) Increase in price
c) Decrease in income of buyer
d) Increase in income of buyer
Answer: b
Q4) Which of the following statements are false?
a) Supply is a timeless concept
b) Supply is a flow concept
c) Number of producers can determine the quantity supplied
d) Objectives of firm can determine the quantity supplied
Answer: a

Q5) Price of a normal good = 100, supply = 100. If price increases to 120, which of the following
cannot be the quantity supplied, given that other factors are constant?
a) 120
b) 115
c) 95
d) 110
Answer: c

7. Elasticity of Supply

Q1) What is the formula for elasticity of supply?


a. Percentage change in Quantity Supplied / Percentage change in Price
b. Change in Price / Change in Quantity Supplied
c. Percentage change in Price / Percentage change in Quantity Supplied
d. Percentage change in Quantity Demanded / Percent change in Price
Answer: a

Q2) Slope of supply curve measures the rate at which


a. Quantity demanded changes with respect to its price
b. Quantity supplied changes with respect to its price
c. Quantity produced changes with respect to its price
d. None of the above
Answer: b
Q3) Government decided to increase the excise duty on the production of a given good. What will be
its impact on the supply of the given good?
a. Supply of good will increase
b. Supply of good will decrease
c. There will be no impact on the supply of good
d. Can’t say
Answer: b

Q4) All the supply curves which pass through the origin are _______
a. Highly elastic
b. Perfectly elastic
c. Unitary elastic
d. Perfectly inelastic
Answer: c

Q5) Which one of the following is not an essential element that impacts the elasticity of supply?
a. Price of commodity
b. Period of time
c. Willingness to buy
d. Quantity
Answer: c

8. Demand Forecasting

Q1) ________ method takes the opinions of the experts regarding the demand and its determinants in
future.
a. Market Experiment
b. Trend Projection
c. Delphi
d. Regression Analysis
Answer: c
Q2) What are the steps of demand forecasting?
a. Specifying the objectives
b. Determining the perspective
c. Collection of data by adjustment
d. All of the above
Answer: d

Q3) What are the methods of demand forecasting?


a. Market experiment
b. Collection of data
c. Trend projection
d. Both (a) and (c)
Answer: d

Q4) In ________ method of demand forecasting, the opinion of the sales force is taken regarding the
demand in the future.
a. Delphi
b. Data Collection
c. Market Experiment
d. Sales Polling
Answer: d

Q5) What is the need for demand forecasting?


a. Planning
b. Scheduling
c. Inventory Control
d. All of the above
Answer: d

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