Economics Mcqs
The price decrease from Rs 2,000 to Rs 1,800 Quantity demanded per year increases 5000 to 6000 units. Which of the following is correct ?

A. The price elasticity of demand is -2
B. The good is inferior
C. Income elasticity is + 0.5
D. Income elasticity is + 2

If the cross elasticity of demand is -2 ?

A. The products are substitutes and demand is cross price elastic
B. The products are substitutes and demand is cross price inelastic
C. The products are complements and demand is cross price elastic
D. The products are complements and demand is cross price inelastic

A fall in price ?

A. Will cause an inward shift of demand
B. Will cause an outward shift of supply
C. May be caused by a fall in demand
D. Leads to a higher level of production

According to the law of diminishing utility ?

A. Utility is at a maximum with the first unit
B. Increasing units of consumption increase the marginal utility
C. Marginal product will fall as more units are consumed
D. Total utility will rise at a falling rate as more units are consumed

A movement along the demand curve to the left may be caused by ?

A. A decrease in supply.
B. A rise in income
C. A fall in the number of substitute goods
D. A rise in the price of inputs

If the cross-price elasticity of demand between two goods is negative, then the two goods are ?

A. Normal goods
B. Unrelated goods
C. Substitutes.
D. Complements

When excess demand occurs in an unregulated market, there is a tendency for ?

A. Price to fall
B. Quantity supplied to decrease.
C. Price to rise
D. Quantity demanded to increase