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MCQs

Total Questions : 874 | Page 5 of 88 pages
Question 41. An economic theory is
  1.    An axiom
  2.    A proposition
  3.    A hypothesis
  4.    A tested hypothesis
 Discuss Question
Answer: Option D. -> A tested hypothesis
Question 42. What is the shape of the average fixed cost (AFC) curve?
  1.    U-shape
  2.    Horizontal up to a point and then rising
  3.    Sloping down towards the right
  4.    Rectangular hyperbola
 Discuss Question
Answer: Option D. -> Rectangular hyperbola
Question 43. Price of a product falls by 10% and its demand rises by 30%. The elasticity of demand is
  1.    10%
  2.    30%
  3.    3
  4.    1
 Discuss Question
Answer: Option C. -> 3
Question 44. A decrease in demand causes the equilibrium price to
  1.    Rise
  2.    Fall
  3.    Remain constant
  4.    Indeterminate
 Discuss Question
Answer: Option B. -> Fall
Question 45. Identify the aspect of taxation which is related to normative economics
  1.    Incidence of tax
  2.    Effect of tax on the capacity willingness to work
  3.    Equity of tax
  4.    None of the above
 Discuss Question
Answer: Option C. -> Equity of tax
Question 46. If elasticity of demand is very low, it shows that the commodity is
  1.    A necessity
  2.    A luxury
  3.    Has little importance in total budget
  4.    a' and 'c' above
 Discuss Question
Answer: Option D. -> a' and 'c' above
Question 47. When price is below equilibrium level, there will be
  1.    Surplus commodity in the market
  2.    Shortage of commodity in the market
  3.    Supply curve will shift
  4.    Demand curve will shift
 Discuss Question
Answer: Option B. -> Shortage of commodity in the market
Question 48. The following are causes of shift in demand EXCEPT
  1.    Change in income
  2.    Change in price
  3.    Change in fashion
  4.    Change in prices of substitutes
 Discuss Question
Answer: Option B. -> Change in price
Question 49. An increase in the supply of a commodity is caused by
  1.    Improvements in technology
  2.    Fall in the prices of other commodities
  3.    Fall in the prices of factors of production
  4.    All of the above
 Discuss Question
Answer: Option D. -> All of the above
Question 50. Demand for a commodity refers to a
  1.    Desire for the commodity
  2.    Need for the commodity
  3.    Quantity demanded of that commodity
  4.    Quantity of the commodity demanded at a certain price during any particular period of time
 Discuss Question
Answer: Option D. -> Quantity of the commodity demanded at a certain price during any particular period of time

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