BHARAT DHINGRA [A Stand-up Academics Conveyer] ECONOMICS, BST, APPLIED MATHEMATICS CLASS XI & XII

Contact: 8700823727
TEST 7/ Economics (030)/Unit 2 & 3/ Chapter 3,4&5/Demand, Elasticity of Demand & Production Function/2024-25
M.M. 30 Time Allowed: 1 Hour
Q. No. Questions Marks
1. Which of the following statements is valid with respect to “Law of Demand & Elasticity of Demand”? 1
(a) Law of demand expresses a relationship between income of the consumer and quantity demand of
a commodity whereas elasticity of demand measures the responsiveness for the same.
(b) Law of demand expresses the quantitative relationship whereas elasticity of demand expresses the
qualitative relationship.
(c) The elasticity of demand expresses magnitude as demand diminishes much or little for a given rise
in price whereas the law of demand can be compared with seesaw swing. As seesaw one side comes
down, other side goes up.
(d) The elasticity of demand expresses direction merely as demand diminishes for a given rise in price
whereas the law of demand can state direction as well as magnitude.
2. Match the following under column A with the correct options given under column B: 1
Column A Column B
(A) TP is maximum (i) MP is Negative
(B) MP = AP. (ii) AP is maximum
(C) Point of Inflexion. (iii) MP is zero
(D) TP is decreasing (iv) MP is Maximum

(a) A(iii), B(ii), C(iv), D(i) (b) A(iv), B(iii), C(i) D(ii) (c) A(iii), B(iv), C(i), D(ii) (d) None
3. Assertion (A): If the price elasticity of demand for some good is estimated to be 4, then a 1% increase 1
in price will lead to a 4% increase in quantity demanded.
Reason (R): A negative sign with coefficient of price elasticity of demand denotes Inverse relation
between price and quantity demanded.
(a) Assertion A is true and Reason (R) is the correct explanation of Assertion (A).
(b) Assertion (A) is true, but Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion is True, Reason is false
(d) Assertion A is false, Reason (R) is true
4. Identify the correct statement: 1
(a) Marginal product of labour refers to the output per unit of fixed factor.
(b) Marginal product of labour refers to the additional unit of output is produced when one more fixed
factor is employed.
(c) Marginal product of labour refers to the output per unit of variable factor.
(d) Marginal product of labour refers to the additional unit of output is produced when one more
variable factor is hired.
5. Statement 1: Fixed factors are those factors which can be changed during short run 1
Statement II: An example of variable factor can be raw material.
(a) Statement I is true and Statement II is false.
(b) Statement II is true and Statement I is false.
(c) Both the Statements are true.
(d) Both the Statements are false.
6. Jane considers tofu a normal good and peanut butter an inferior good. We can predict that with an 1
increase in her income she will consume:
(a) more of both goods. less of both goods
(b) she will not change her consumption of peanut butter
(c) more peanut butter and less tofu
(d) more tofu and less peanut butter

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BHARAT DHINGRA [A Stand-up Academics Conveyer] ECONOMICS, BST, APPLIED MATHEMATICS CLASS XI & XII
Contact: 8700823727
7. If the area under each and every coordinate on a demand curve is the same, then 1
(a) the ped is zero (b) the ped is one (c) the ped is infinity (d) none of the above

8. An increase in subway fares in New York City will boost your expenditures on subway rides if: 1
(a) your demand for subway rides is elastic
(b) the supply of subway rides is elastic
(c) your demand for subway rides is inelastic
(d) the supply of subway rides is inelastic
9. In 2005 there were 200,000 gas grills demanded at a price of 500. In 2006 there were more than 200,000 1
gas grills demanded at the same price. This increase could be the result any of the following EXCEPT:
(a) an increase in income if gas grills are a normal good
(b) an increase in the supply of gas grills
(c) a fall in the price of natural gas, a complement for a gas grill
(d) an increase in population
10. For a perfectly Elastic demand curve, which of the following holds true? 1
(a) There is no change in the price irrespective of change in the demand.
(b) There is no change in the demand and respect of change in the price.
(c) Demand cover will be vertical and parallel to Y axis.
(d) Both (a) and (c)
11. (A) Differentiate between Contraction in Demand & Decrease in demand on the basis of meaning, 3
schedule, diagram, alternative name.
OR
(B) Differentiate between Individual Demand & Market Demand with the help of diagram. Which of
them will have a steeper curve and why?
12. (A) A firm is currently selling 10,000 units of its product per month. The firm plans to reduce the retail 3
price from ₹1 to ₹0.99. From the previous experience, the firm knows that the price elasticity of
demand for the product is (-) 1.5. Assuming no other changes, how much the firm can now expect
the sales?
OR
(B) Explain any 3 Factors affecting price elasticity of demand.
13. Fill the missing figures: 4

14. With air pollution levels escalating to alarming levels in Delhi and the National Capital Region, the 4
sale of air purifiers and masks have surged significantly, according to traders in the city. Delhi's air
quality plummeted to the 'severe plus' category on Monday, with the Air Quality Index (AQI) soaring
to 484 - its worst reading this season, according to the Central Pollution Control Board (CPCB).
Interpret this using demand tool as basic analysis of Economics. Also state which determinant of
demand is fostering this.
Read more at: https://economictimes.indiatimes.com/news/india/air-purifier-mask-sales-up-as-delhi-ncr-grapples-with-severe-air-
pollution/articleshow/115418522.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

15. (a) Calculate the price elasticity of demand if the price reduced by half amount and quantity demand 6
roses by double amount.
(b) “An increase in the price of the related good will surely decreases the demand for the given good.”
Justify with valid reason and diagram.
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