MCQ on Theory of Demand Analysis with Answers
Theory of Demand MCQ, which are covered in this chapter, relate to the topic, Theory of Demand. Theory of Demand MCQ Test contains 20 questions. Answers to Theory of Demand MCQ are available after clicking on the answer.
1.Demand for a commodity refers to:
(a)Desire for the commodity
(b)Need for the commodity
(c)Quantity demanded of that commodity
(d)Quantity of the commodity demanded at a certain price during any particular period of time.
Answer
Answer: (d) Quantity of the commodity demanded at a certain price during any particular period of time.
2.In case of an inferior good, the income elasticity of demand is:
(a)Positive
(b)Zero
(c)Negative
(d)Infinite
Answer
Answer: (c) Negative
3.For what type of good does demand fall with a rise in income levels of households?
(a)Inferior goods
(b)Substitutes
(c)Luxuries
(d)necessities
Answer
Answer: (A) Inferior goods
4.In case of Inferior goods like bajra, a fall in its price tends to:
(a)Make the demand remain constant
(b)Reduce the demand
(c)Increase the demand
(d)Change the demand in an abnormal way
Answer
Answer: (b) Reduce the demand
5.Movement along the same demand curve shows:
(a)Expansion of demand
(b)Expansion of supply
(c)Expansion and contraction of demand
(d)Increase and decrease of demand
Answer
Answer: (c) Expansion and contraction of demand
Theory of Demand MCQ
6.The price of hot – dogs increase by 22% and the quantity demanded falls by 25% this indicates that demand for hot dogs is:
(a)Elastic
(b)Inelastic
(c)Unitary elastic
(d)Perfectly elastic
Answer
Answer: (A) Elastic
7.What is an Engels curve?
(a)Another name of demand curve
(b)Curve showing both demand & supply curves
(c)Curve named after Lord Engels
(d)All
Answer
Answer: (c) Curve named after Lord Engels
8.Which factor generally keeps the price – elasticity of demand for a good low:
(a)Variety of uses for that good
(b)Its low price
(c)Close substitutes for that good
(d)High proportion of the consumer’s income spent on it
Answer
Answer: (d)High proportion of the consumer’s income spent on it
9.In case of a straight line demand curve meeting the two axes, the price elasticity of demand at the midpoint of the line would be:
(a)0
(b)1
(c)1.5
(d)2
Answer
Answer: (b) 1
10.An increase in demand can result from:
(a)A decline in the market price
(b)An increase in income
(c)A reduction in the price of substitutes
(d)An increase in the price of complements
Answer
Answer: (b) An increase in income
Theory of Demand MCQ
11.Compute income elasticity if demand increases by 5% and income by 1%
(a)5
(b)1/5
(c)0
(d)None
Answer
Answer: (A) 5
12.For a commodity with a unitary elastic demand curve if the price of the commodity rises, then the consumer’s total expenditure on this commodity would:
(a)Increase
(b)Decrease
(c)Remains constant
(d)Either increase or decrease
Answer
Answer: (c) Remains constant
13.What is the value of elasticity of demand if the demand for the good is perfectly elastic?
(a)0
(b)1
(c) Infinity
(d)Less than 0
Answer
Answer: (c) Infinity
14.What is the original price of a commodity when price elasticity is 0.71 and demand changes form 20 units to 15 units and the new price is ` 10?
(a)5.4
(b)18
(c)20
(d)8
Answer
Answer: (A) 15.4
15.If the price of any complement goods rises :
(a)Demand curve shifts to left
(b)Demand curve shifts to right
(c)Demand curve moves downwards
(d)Demand curve moves upward
Answer
Answer: (A) Demand curve shifts to left
Theory of Demand MCQ
16.Cross elasticity of demand in Monopoly market is:
(a)Elastic
(b)Zero
(c)Infinite
(d)One
Answer
Answer: (b) Zero
17.What is income elasticity of demand, when income changes by 20% and demand changes by 40%
(a)1/2
(b)2
(c)0.33
(d)None
Answer
Answer: (b) 2
18.Giffen Paradox is an exception of
(a)Demand
(b)Supply
(c)Production
(d)Utility
Answer
Answer: (A) Demand
19.Law of demand is a ______________
(a)Quantitative Statement
(b)Qualitative Statement
(c)Both a & b [point elasticity]
(d) hypothetical
Answer
Answer: (b) Qualitative Statement
20.When the total expenditure incurred by the consumers on a commodity due to a change is its price remains the same, then the elasticity of demand for that commodity will be:
(a)Zero
(b)One
(c)More than one
(d)Less than one
Answer
Answer: (b) One
10 thoughts on “Theory of Demand MCQ Demand Analysis Economics Class 11”
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