Q. The elasticity of demand of durable goods is: Less than unityGreater than unityEqual to unityZero Answer: Greater than unity

Q. Which one is the assumption of law of demand? Price of the commodity should not changeQuantity demanded should not changePrices of substitutes should not changeDemand curve must be linear Answer: Prices of substitutes should not change

Q. The following is the direct tax among: House taxEntertainment taxService taxValue Added tax Answer: House tax

Q. The cost of one thing in terms of the alternative given up is called: Real costProduction costPhysical costopportunity cost Answer: opportunity cost

Q. An individual demand curve slopes downward to the right because of the: Working of the law of diminishing marginal utilitysubstitution effect of decrease in priceincome effect of fall in PriceAll of the above Answer: All of the above

Q. If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to: IncreaseB DecreaseRemain the sameBecome zero Answer: Increase

Q. Demand for a commodity refers to: Need for the commodityDesire for the commodityAmount of the commodity demanded at a particular price and at a particular timeQuantity demanded of that commodity Answer: Amount of the commodity demanded at a particular price and at a particular time

Q. Which of the following is a demand function? Q + 4P = 20Q = 35 + 3PQ - 2P - 15 = 05P - Q = 4 Answer: Q + 4P = 20

Q. If demand is unitary elastic, a 25% increases in price will result in: 25% change in total revenueNo change in quantity demanded1% decrease in quantity demanded25% decrease in quantity demanded Answer: 25% decrease in quantity demanded

Q. Other things equal, if a good has more substitutes, its price elasticity of demand is: LargerSmallerZeroUnity Answer: Larger