Micro Economics MCQ
Micro Economics MCQ Definition: Microeconomics is the study of individuals, households and firms’ behavior in decision making and allocation of resources. It generally applies to markets of goods and services and deals with individual and economic issues.
171. From the position of stable equilibrium, the market supply of a commodity decreases, while the market demand remains unchanged, then:
A. Equilibrium price falls
B. Equilibrium quantity rises
C. Both equilibrium price and equilibrium quantity decreases
D. Equilibrium price rises, but equilibrium quantity falls
Answer:D
172. If the percentage increase in the quantity demanded of a commodity is smaller than the percentage fall in its price, the coefficient of price elasticity:
A. Greater than one
B. Equal to one
C. Smaller than one
D. Zero
Answer:C
173. A fall in the price of the commodity whose demand curve is a rectangular hyperbola causes total expenditure on the commodity:
A. Increases
B. Decreases
C. Remains unchanged
D. None of the above
Answer:C
174. If the quantity demanded remains unchanged as the price of the commodity falls, the coefficient of price elasticity of demand is
A. Greater than One
B. Equal to one
C. Smaller than one
D. Zero
Answer:D
175. An increase in the price of the commodity when demand is inelastic causes the total expenditure of consumers of the commodity to:
A. Increase
B. Decrease
C. Remains unchanged
D. Any of the above
Answer:C
176. A negative income elasticity of demand for a commodity indicates that as income falls, the amount of the commodity purchased:
A. Rises
B. Falls
C. Remains unchanged
D. None of the above
Answer:A
177. If the income elasticity of demand is greater than one, then the commodity is:
A. Necessity
B. Luxury
C. Inferior
D. Non-related commodity
Answer:A
178. If the amount of the commodity purchased remains unchanged when the price of another commodity changes, the cross elasticity of demand between them will be:
A. Positive
B. Negative
C. Zero
D. One
Answer:C
179. If the income elasticity of demand for a commodity is found to be 0.4, then the commodity concerned is
A. Luxury
B. Necessity
C. Giffen’s goods
D. Independent good
Answer:B
180. Elasticity of supply for a positively sloped straight line supply curve that intersects the price axis is:
A. Equal to zero
B. Equal to one
C. Greater than one
D. Constant
Answer:C
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