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.
191. An increase in supply means:
A. Movement down given supply curve
B. Movement upward given supply curve
C. Leftward shift in supply curve
D. Rightward shift in supply curve
Answer:A
192. At prices above the equilibrium price:
A. Quantity supplied exceeds quantity demanded
B. Quantity demanded exceeds quantity supplied
C. There is shortage
D. All of the above is possible
Answer:A
193. An increase in market supply, demand remaining the same causes:
A. Increase in equilibrium price
B. Decrease in equilibrium quantity
C. Decrease in equilibrium price and increase in equilibrium quantity
D. Both equilibrium price and quantity rises
Answer:C
194. An increase in market demand, supply remaining the same results in:
A. Decrease in equilibrium price
B. Decrease in equilibrium quantity
C. Decrease in equilibrium price and increase in equilibrium quantity
D. Both equilibrium price and quantity rises
Answer:C
195. A fall in the market demand, supply remaining the same results in:
A. Increase in equilibrium price
B. Increase in equilibrium quantity
C. Increase in equilibrium price and decrease in equilibrium quantity
D. Both equilibrium price and quantity falls
Answer:D
196. Which one of the following elasticities takes the average of prices and quantities:
A. Point elasticity of demand
B. Arc elasticity of demand
C. Income elasticity of demand
D. Cross elasticity of demand
Answer:B
197. As a result of a fall in the price total expenditure on the commodity decreases, the coefficient of elasticity will be:
A. Equal to one
B. Greater than one
C. Less than one
D. Cannot say
Answer:C
198. If a small change in price leads to infinitely large change in quantity demanded, then the demand is:
A. Perfectly elastic
B. Perfectly inelastic
C. Elastic
D. Inelastic
Answer:B
199. When demand curve is rectangular hyperbola, the value of price elasticity of demand will be:
A. Zero
B. One
C. Greater than one
D. Infinity
Answer:B
200. On a linear demand curve, the coefficient of price elasticity is unity, then the value of MR will be:
A. Positive
B. Zero
C. Negative
D. One
Answer:B
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