MCQs on Law of Demand

Law of demand is a fundamental principle of Economics, it states that quantity demanded is always inversely related to the price of the goods. In other words, with increase in price, quantity demanded will be less and vice versa.

Following are some of the law of demand multiple choice questions and answers that will help the students in brushing up their understanding of the concept of law of demand.

1. An individual’s demand for goods is:
   1. The amount he will buy at any given price.
   2. The total amount he is able to buy.
   3. His willingness to buy a given quantity at market price.
   4. His ability to buy a given quantity.

Answer:- a

1. In the typical demand schedule, quantity demanded:
   1. Varies directly with price.
   2. Varies proportionately with price.
   3. Varies inversely with price.
   4. Is independent of price.

Answer:- c

1. The law of demand states that:
   1. When price rises demand rises.
   2. When price rises demand falls.
   3. When income rises demand rises.
   4. When income rises demand falls.

Answer:- b

1. The law of demand indicates:
   1. The relationships between the price of the commodity and its quantity demanded.
   2. The relationships between the income of consumer and its quantity demanded.
   3. The relationships between the price of the substitute of a commodity and its quantity demanded.
   4. The relationships between the price of the complimentary of a commodity and its quantity demanded.

Answer:- a

1. A rise in the price of a commodity leads to:
   1. A shift in Demand
   2. A rise in Demand
   3. A fall in consumer’s real income
   4. A rise in consumer’s real income

Answer:- c 

1. In case of a Giffen good like Maize, a fall in its price tends to :
   1. Make the demand remain constant.
   2. Increase the demand
   3. Reduce the demand
   4. Change the demand

Answer:- c 

1. Which of the following pairs of commodities is an example of substitutes :
   1. Coffee and Milk
   2. Diamond and soap
   3. Pen and ink
   4. Mustard oil and coconut oil

Answer:- d 

1. When the price of a substitute of commodity X rises, the demand for X :
   1. Rises
   2. Falls
   3. Remains Constant
   4. Any of the above.

Answer:- a 

1. Other things being equal a rise in demand can be caused by :
   1. A rise in the price of the commodity.
   2. A fall in the price of the commodity.
   3. A rise in the income of the consumer.
   4. A fall in the income of the consumer.

Answer:- c

1. There is decrease in demand when :
   1. More is demanded at the same price.
   2. More is demanded at the higher price.
   3. Less is demanded at the same price.
   4. Less is demanded at the higher price.

Answer:- c