"Session 1 - Chapter 1 & 2 - Introduction to Microeconomics, Demand and Supply Analysis.pdf"
Multiple Choice Questions (MCQs):
- What is economics primarily concerned with?
a) Studying the behavior of animals
b) Analyzing how individuals and nations use scarce resources
c) Managing natural disasters
d) Predicting the weather - Opportunity cost is defined as:
a) The total cost of production
b) The cost of availing one opportunity in terms of the loss of another
c) The cost of labor
d) The cost of raw materials - The Law of Demand states that, all other factors being held constant:
a) As the price of a good increases, the quantity demanded will also increase
b) As the price of a good increases, the quantity demanded will fall
c) Price and quantity demanded are unrelated
d) Quantity demanded always remains constant - What is a demand schedule?
a) A list of all producers in the market
b) A table representing different quantities of commodities consumers are willing to purchase at specific prices
c) A schedule of production times
d) A list of government regulations on trade - Which of the following is NOT a determinant of demand?
a) Price of a commodity
b) Income of consumers
c) Cost of production
d) Tastes and preferences of consumers - What does the Law of Supply state?
a) An inverse relationship between price and supply
b) A direct relationship between price and supply
c) No relationship between price and supply
d) Supply remains constant regardless of price - Market equilibrium occurs when:
a) Quantity demanded is greater than quantity supplied
b) Quantity supplied is greater than quantity demanded
c) Quantity demanded equals quantity supplied
d) Prices are at their highest point - What is expansion of demand?
a) A decrease in demand due to an increase in price
b) An increase in demand due to a decrease in price
c) A shift in the demand curve
d) No change in demand - Giffen goods are an exception to the law of demand because:
a) They are luxury goods
b) An increase in price actually increases the quantity of the good demanded
c) They are always cheap
d) They are always in high supply - What does a shift in the supply curve indicate?
a) A change in price
b) A change in quantity supplied due to factors other than price
c) No change in supply
d) A change in demand - What is contraction of supply?
a) An increase in supply due to a decrease in price
b) A decrease in supply due to an increase in price
c) A shift in the supply curve
d) No change in supply - What is a numerical demand function for ball pens DX = 1000 - 25PX used for?
a) calculating total revenue
b) Predicting Quantity demanded based on price.
c) determining supply level
d) Analyzing profit margins - When the price of eggs falls from ₹60 per dozen to ₹50 per dozen, and the quantity demanded rises from 6 dozens to 9 dozens, this is an example of:
a) Contraction of demand
b) Expansion of demand
c) Shift in demand curve
d) No change in demand - In the demand function DX = 1000 - 25PX, if the price (PX) is Rs 20, what is the quantity demanded (DX)?
a) 750
b) 625
c) 500
d) 375 - According to the Demand Analysis for Air Purifier in India caselet, the demand for air purifiers increased by almost how much in November 2017 compared to the previous month?
a) 13%
b) 25%
c) 90%
d) 50% - According to the document, what is a key factor to define demand for a commodity or service?
a) Profit of the seller
b) The quantity to be purchased, the price, and the time period
c) Availability of substitutes
d) Government regulations - Individual and market demand schedules are examples of:
a) Supply determinants
b) Tabular representations of quantities at specific prices
c) Production quotas
d) Economic theories - Which of these is a determinant of demand?
a) Cost of production
b) Income of consumers
c) Taxation policies
d) Natural conditions - In the given numerical example, if the price of ball pens is Rs 15, what is the quantity demanded using the function DX = 1000 - 25PX?
a) 750
b) 625
c) 500
d) 375 - What does the market demand curve show?
a) Supply at different price levels
b) Quantities all consumers are willing to purchase at different price levels
c) Government regulations
d) Production costs - What causes movement along the demand curve?
a) Change in price
b) Change in tastes and preferences
c) Change in income
d) Change in price of substitute goods - Expansion and contraction of demand are due to:
a) Change in the price of the product
b) Change in consumer income
c) Change in technology
d) Change in input costs - Which of the following is an exception to the Law of Demand?
a) Normal Goods
b) Giffen Goods
c) Complementary Goods
d) Substitute Goods - In economics, supply refers to:
a) The quantity of a product available for sale at a specific price and time
b) The demand for a product
c) The cost of production
d) The government's policies - Which of the following is a determinant of supply?
a) Consumer income
b) Tastes and preferences
c) Cost of production
d) Price of related goods - The Law of Supply states:
a) An inverse relationship between price and supply
b) A direct relationship between price and supply
c) Supply is constant
d) No relationship between price and supply - Expansion or extension of supply is when:
a) Larger quantities of a good are supplied at higher prices
b) Smaller quantities of a good are supplied at higher prices
c) Supply remains constant
d) Supply decreases - A shift in the supply curve is caused by:
a) Change in input costs
b) Change in price of the product
c) Change in quantity demanded
d) Expansion of supply - Market equilibrium is defined as:
a) Quantity demanded equals quantity supplied
b) Quantity demanded is greater than quantity supplied
c) Quantity supplied is greater than quantity demanded
d) Prices are always high
a) ₹25,000
b) ₹35,000
c) ₹40,000
d) ₹55,000
set 2mcq-
- According to the text, what does 'scarcity' imply in economics?
a) Abundance of resources
b) Limited resources in relation to unlimited wants
c) Resources that are free
d) Resources that are always available - What does the term 'opportunity cost' refer to?
a) The cost of labor in production
b) The direct cost of purchasing a good
c) The cost of the next best alternative forgone
d) The total cost of all inputs - Which of the following is NOT mentioned as a basic economic question?
a) What to produce?
b) How to produce?
c) When to produce?
d) For whom to produce? - According to the document, economics studies the behavior patterns of:
a) Animals only
b) Plants only
c) Human beings
d) Weather patterns - Which data release in November 2017 listed nine Indian cities in the top twenty most polluted cities?
a) Centre for Science and Environment (CSE)
b) World Health Organisation (WHO)
c) Research and Markets
d) CISION - What was the current annual growth rate of the air purifier market from 2012 to 2015 mentioned in the document?
a) 13%
b) 25%
c) 50%
d) 90% - Which three key factors define the demand for a commodity or service?
a) Profit, cost, and time
b) Desire, want, and need
c) Quantity, price, and time period
d) Production, consumption, and distribution - What is the mathematical expression for the Law of Demand as given in the text?
a) D = P + f
b) D = f(P)
c) D = P - f
d) P = f(D) - A market demand schedule is a consolidation of:
a) Supply schedules
b) Individual demand schedules
c) Production schedules
d) Government regulations - In the demand function DX = 1000 - 25PX, if the price (PX) is Rs 30, what is the quantity demanded (DX)?
a) 750
b) 500
c) 375
d) 250 - What does the market demand curve graphically show?
a) Supply at different prices
b) Quantities consumers are willing to purchase at different prices
c) Production costs
d) Government policies - Expansion of demand is a result of:
a) Increase in income
b) Decrease in price
c) Increase in the price of substitutes
d) Change in tastes and preferences - Contraction of demand is a result of:
a) Increase in price
b) Decrease in income
c) Decrease in the price of complements
d) Change in technology - 'Veblen Goods' are an exception to the law of demand because they are associated with:
a) Inferior goods
b) Prestige and status
c) Basic necessities
d) Goods with readily available substitutes - In economics, 'supply' refers to:
a) Quantity available for sale at a specific price and time
b) The desire for goods
c) The need for resources
d) The total production capacity - According to the Law of Supply, there is a ______ relationship between price and supply.
a) Inverse
b) Direct
c) No
d) Fluctuating - Expansion of supply occurs when:
a) Larger quantities are supplied at higher prices
b) Smaller quantities are supplied at higher prices
c) Supply remains constant
d) Supply decreases - A shift in the supply curve can be caused by a change in:
a) Price of the product
b) Quantity demanded
c) Input costs
d) Expansion of supply - Market equilibrium is the point where:
a) Supply exceeds demand
b) Demand exceeds supply
c) Quantity demanded equals quantity supplied
d) Prices are at their highest - According to the numerical example for market equilibrium of computers, at what price is the quantity supplied 80,000 and the quantity demanded 80,000?
a) ₹25,000
b) ₹35,000
c) ₹40,000
d) ₹55,000 - If D = 10p + 8 and S = 12p - 5, what is the equilibrium price (p)?
a) 5.50
b) 6.50
c) 7.50
d) 8.50 - In the fruitseller example, with demand functions D1=25-1P, D2=20-0.5P, and D3=15-0.5P, and a total supply of 20kgs, what is the price (P) at which all apples can be sold?
a) 10
b) 20
c) 30
d) 40 - A shift in the demand curve to the right indicates:
a) An increase in demand
b) A decrease in demand
c) No change in demand
d) A change in supply - A shift in the supply curve to the right indicates:
a) A decrease in supply
b) An increase in supply
c) No change in supply
d) A change in demand - If supply shifts to the left, what happens to price and quantity at equilibrium?
a) Price increases, quantity decreases
b) Price decreases, quantity increases
c) Price and quantity both increase
d) Price and quantity both decrease - If demand shifts to the right, what happens to price and quantity at equilibrium?
a) Price increases, quantity increasesb) Price decreases, quantity decreases
c) Price increases, quantity decreases
d) Price decreases, quantity increases
- The "cement demand to outpace supply growth" article refers to:
a) A situation where demand is increasing faster than supply
b) A situation where supply is increasing faster than demand
c) A situation where demand and supply are equal
d) No relationship between demand and supply - According to the text, the supply-and-demand model is used to:
a) Explain and predict market behavior
b) Control market prices
c) Regulate production quotas
d) Eliminate competition - Which is a determinant of Supply?
a) Income of Consumers
b) Taste and Preference
c) Taxation Policies
d) Price of Related Goods - What would be the impact on demand/supply if price is Rs 10 (given D=10p+8 and S=12p-5)?
a) More demand as compared to supply
b) More supply as compared to demand
c) Demand and supply are equal
d) No impact on demand/supply
- According to the text, what does 'scarcity' imply in economics?
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