Economics MCQs – Chapter 2 – Theory of Demand MCQ

Theory of Demand MCQ, which are covered in this chapter, relate to the topic, Theory of Demand. Theory of Demand MCQ Test contains 10 questions. Answers to Theory of Demand MCQ are available at the end of the last question.




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.

2. In case of an inferior good, the income elasticity of demand is:

(a)    Positive

(b)    Zero

(c)     Negative

(d)    Infinite

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

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

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

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




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

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

9. In case of a straight line demand curve meeting the two axes, the price elasticity of demand at the mid-point of the line would be:

(a)    0

(b)    1

(c)     1.5

(d)    2

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

 

ANSWERS

1.(d) Quantity of the commodity demanded at a certain price during any particular period of time.

2. (c) Negative

3. (a) Inferior goods

4. (b) Reduce the demand

5. (c) Expansion and contraction of demand

6. (a) Elastic

7.  (c) Curve named after Lord Engels

8. (b) Its low price

9. (b) 1

10 (b) An increase in income

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