Nature, Scope & the Theory of Demand and Supply — Practice

Question 1

The opportunity cost of a decision is

Accepted Answer

B

Question 2

An increase in consumer income causes, for a normal good

Accepted Answer

B

Question 3

If a 10% fall in price causes a 25% rise in quantity demanded, demand is

Accepted Answer

C

Question 4

The cross elasticity of demand between two goods is −0.8. The goods are

Accepted Answer

B

Question 5

A Giffen good is one for which

Accepted Answer

B

Question 6

A firm cuts its price and finds that total revenue falls. Demand for its product is

Accepted Answer

B

Question 7

Total utility is maximum when marginal utility is

Accepted Answer

B

Question 8

Indifference curves are convex to the origin because

Accepted Answer

B

Question 9

If demand increases and supply simultaneously decreases, then

Accepted Answer

B

Question 10

A point lying inside the production possibility curve indicates

Accepted Answer

B

Question 11

Demand for a good is most likely to be elastic when

Accepted Answer

B

Question 12

Consumer surplus is

Accepted Answer

B

Question 13

A government wishes to raise revenue from a commodity tax. It should tax a good whose demand is

Accepted Answer

B

Question 14

Along a straight-line downward-sloping demand curve, elasticity at the midpoint is

Accepted Answer

B

Question 15

Which statement about an inferior good is correct?

Accepted Answer

B

Practice — Nature, Scope & the Theory of Demand and Supply