Chapter Demand and Supply. Part -1
1. The natural shape of the demand curve is?
A. Horizontal
B. Vertical
C. Downward
D. Upward
2. Law of demand shows the relation between ---
A. Income and the price of the commodity
B. Price and quantity of a commodity
C. Supply and income
D. Price and savings
3. When there is a huge availabity of substitute product the elasticity of price will be
A. Larger
B. Lower
C. Similar
D. 1
4. The elasticity of Necessity commodity is
A. Very low
B. very high
C. Equal to 0
D. Either High or Low
5. When there is perfect elasticity in the market, a decrease in price will result in?
A. Increase in Demand of the commodity
B. Decrease in the Demand
C. Both 1 and 2
D. either 1 or 2
6. RAJU buys spends ₹5000 on a product, no matter what is the price the product he will spend ₹5000 only. The elasticity of demand is—
a. More Than 1
b. Less than 1
c. Equals to 1
d. 0
7. Which of the following is the assumption to the law of demand?
A. The price of the substitute product is fixed.
B. The demand of the product is fixed
C. The price of the product is fixed
D. the product is for free
8. Which one of the following is the substitute of Tea
A. Sugar
B. Water
C. Coffee
D. oil
9. Income elasticity of normal goods is
A. Negative
B. Positive
C. none of these
D. 0
10. Demand is a function of
A. Goods
B. Demand
C. supply
D. price
ANSWER KEY: 1-c, 2-b, 3-a, 4-a, 5-a, 6-c, 7-a, 8-c, 9-b, 10-d
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