Demand 3.

39
Q.5. Match the statements given under A with the correct options given underB.

(A) (B)
) Normal Goods a. Demand decreases with an increase in income
i ) Inferior Goods b. Demand decreases with an increase in price

C. Demand increases with an increase in price

d. Demand increases with an increase in income

Ans.() d: (i) a.
Q.6. Match the statements given under A with the correct options given under B.

(A) (B)
0 Substitute Goods a. Car and Petrol
i) Inferior Goods b. Rightward shift in the demand curve
(i) Expansion in Demand c . Rice and Wheat

() Complementary d. Increase in Quantity Demanded

Goods
() Increase in Demand e. Demand decreases with an increase in income

Ans. )c: () e; (ii) d: (iv) a: ()b.

O.7. Match the statements given under A with the correct options given under B.
(A) (B)
O Normal Good a. Relationship between demand of given commodity and prices of related goods

) Decrease in Demand b. Decrease in Quantity Demanded

C. Demand increases with increase in income
)SubstituteGoods
( ) Cross Demand d. Leftward shift in the demand curve

e. Competitive Demand
Contraction in
Demand
Ans. () c: (i) d: (i) e; (iv) a; (V) b.
(MCQs) MULTIPLE CHOICE QUESTIONS and
(MROs) MULTIPLE RESPONSE QUESTIONS
there may be one or more tnan one correct answer. You have to mark all the correct answers.
In the following Questions,
Which of the following is an example of substitute goods?
(a) Tea and Coffee (6) Coke and Pepsi
(c) Car and Petrol (d) Tea and Sugar
The demand for normal good with an increase in income of the consumer
(a) Increases (6) Decreases
(c) Remains same (d) Either increases or decreases
Increase in price of substitute good leads to:
(a) Expansion in Demand (D) Increase in Demand
 3.40
WhereasA
(C) Decrease in Demand
where A
and bare compre
dy,
and Care D
commodities,
3.41
B a n d Care three
A, in price of
commodiy
wil tal
(b) Downward movement aiong the same market demand Curve
Wth increase Band C (C) Hignward s t t m tne fmarket demand curve
commodities A, demand
or C will rise
of all the whereas
(d) Leftward shitt in the market demand curve
a) mand
commodities Aand B will fall, demand of B will rise
of whereas
Demand
A and C will
fall, 15. A movement along the demand curve for
of commodities
whereas
demand of A will rise (a) increase in demand
soft drinks is best described as:
Demand B and C will fal, (D) Decrease in demand
D e m a n d of commodities
i s Known as: (c) Change in quantuty demanded
simultaneously, (d) Change in demand
demanded
.when two or more goods are (b) Alternate Demand 16. If more is demanded at the same price or same quantity at a higher price, this fact of demand is known

(a) Joint Demand (d) CompoSite Demand

(C) Direct Demand (a) Extension of demand () Increase in demand
demand curve of cars witn
a n increase in
the pric (c) Contraction of demand
6. There will
bea
in the
(6) Upward Movement of pet. (d) Decrease in dermand
17. Cross demand states the relationship between:
(a) Rightward Shift (d) Downward Movement (a) Demand of given commodity and price ot related goods.
(c) Leftward Shift
(b) Demand of given commodity and income of the consumer.
drawn on the assumption that:
. The demand curve for a commodity is generally (c) Demand of given commodity and taste and prererences.
(a) Prices of substitute goods do not change. (d) None of these.

consumer remain the same.

(0) astes and preferences of the 18. Which of the tOllowing is not an asSumption of law of demand?
income of the consumer remains the same.
(a) Price of substitute goods do not change
(C)
(d) All of these.
(b) Income of the consumers remain same

8. Which one of these is not an example of ()There is no change in tastes and preterences of the consumers
e a and coffee
complementary goods
(b) Coke and Pepsi
(d)Price of the given commodity does not change.

(a 19. If change in price of good Aarfects the demand tor good B, then:
(c) Pen and Refill (d) Bread and Butter (3) A15 d s u D s t a t e or go00 B, (0) A IS a complement of good B.

9. Law of Demand states the () Botn (a) and (o) (d) Ether (a) or (o)
relationship between price and quantity
Inverse (6) Positive
demanded. 20. In a typical demand schedule, quantity demanded:
(b) Varies proportionately with price
() Proportional (d) None of these (a)
(C)
Varies directly with price
Varies inversely with price (d) Is independent of price.
10. Expansion in demand leads to:
21. Which of the following is a determinant of market demand?
(a) Rightward Shift in demand curve (6) Season and weather
(a) Income of the consumers
(b) Downward Movement along the demand curve
() Price of related go0ds (d) All of the above
(C) upward Movement along the demand
curve shift in the demand curve:
d) Noneof these 22. Which of the following factors will to a
lead leftward
11. Which one of (a) Increase in income in case of inferior goods
these is not a determinant of Individual demand? (b) Increase in income in case of normal goods
(a) Size and composition of
population (6) Tastes and
c) Decrease in Population
(C) Distibution of Income Preferences (d) Expectation of future increase in price

12. From the (d) All of these to:

given demand schedule, determine the 23. Decrease in the price of the complementary goods leads
effect on demand curve: (a) Upward movement along the same demand curve
Price () the same demand curve
20 (b) Downward movement along
Demand (Units) 100 (c) Rightward shift in the demand curve
(a) 70
Rightward Shift in demand curve (d) Leftward shift in the demand curve
4. If price of good 'X rises and it leads to a fall in demand for g0od' Y, then the two goods are
(c)Upward Movement along the demand (6) Leftward Shift in Demand
13. Expansion in demand occurs due to: curve () Downward Movement along curveeman (a) Substitute goods
(b) Complementary goods
(d) Inferior g0ods
(a) Rise in price of the
given
the de (C) Normal goods
Summation of the individual demand curves.
(c) Rise in price of substitute commodity 25. Market demand curve is obtained by
goods (6) Fall in
price of the given (b) Horizontal
14. There is a (a) vertica
sudden change (a) Fall in
price of co (d) Neither (a) nor (b)
drinks, it willin lead to:
cimatic conditions resulting in hot (C) Both (a) and (D)
price
(a)
of the cold
Upward movement along tie Same
complementary go00ange 26. Ceteris paribus means:
weather. Assuming constant (b) Holding demand constant
market demand (a) Holding supply
curve constant (d) Other factors being constant
() Price being
 commodity whose
An inerease in real income of a consumer induces him to Duy more o f d
Ose prioe Dermano
tallen This s Known as: (b) Substitution Effect (a) InCrease 3.43
(c) Decrease
(b) No change
hducement Emect (d) Utility Effect (o) less than proportionate increase
hoome Emect 38, Expansion and contraction in demand are caused by:
Demand is associated with:
a) Change in price of the given good
8 Expansion of () Change in income
demanded ()Change in prices of related goods
(a) Rise in Price, Rise in quantity () Change in population
Fall in Price, Fall in quantity demanded
39. When income of the consumer fails, the impact on
(D)
the correct alternative)
price-demand curve of an inferior good is: (Choose
demanded
(C) Fallin Price, Rise in quantity
demanded (a) Shifts to the right
(d) Rise in Price, Fall in quantity (6) Shifts to the left
then with increase in price of
X: (c) There is upward movement along the curve Thore
29. 11 X andY are Complementary Goods, o) There s downward movement along the curve
Demand ol X will decrease and demand
of Y Will ncrease. 40. If due to tall in the price of go0d X, demand for good Y rises, the two goods
(a) are: (Choose the correct

(D) Demand ot X will increase and demand of Y Will decrease. alternative)

(a) Substitutes
(C) Demand of X and Y will increase. (b) Complements
() Not related
(d) Demand of X and Y will decrease. (d) Competitive
30. If Tea and Coffee are substitutes, a fall in the prices of Tea leads to: 41. If with the rise in price of good Y, demand for good X rises, the two goods are: (Choose the correct

0 Hise in the demand for Tea i) Fall in the demand of Tea alternative)
for Coffee () Hise in the demand of coffee (a) Substitutes (6) Complements
() Fall in the demand
(a) Both (i) and () (D) Both () and (i) (c) Not related (d) Jointly demanded
(c) Both () and (i) (d) Both () and (v) 42. The demand curve of a good shifts from DD' to dd'
31. All except one of the following are assumed to remain same while drawing an
individual's dea
curve for a product. Which one is it?
(a) Tastes and Preferences of the individual
(b) Monetary income
(c) Price of the given
() Price of related goods product py d
32. With tallin X
price ot a commodity, demand of the Demand (Units)
comparison to other commodities. This effectcommodity
increases as it becomes
in
is known as: relatively che This shift can be caused by: (Choose the correct alternative)
Substtution Effect (0) Income Effect (a) fall in the price of the good (6) rise in the price of the good
Law of Demand
(d) Law of d) rise in the price of complementary goods
33. The demand function of Diminishing Returns () rise in the price of substitute goods
at
a product Xis given as:. Dx 12-2Px, where
= A n c r e d s e in tne price ot Coffee will have the following effect on the demand curve of Tea:
price of R2 will be: Px stands
Stands for price. The dema
e x
price. The oEn
(c) 5 (D) 8
34. The demand
function (d) 10
of
Y has
a
product Xis
given as: Dx= 20-3Px,
a demand of 8 units, then market where Px stands for
(a) 4 of price the product is: price. If an in
) 73 (0)R5
35. The demand function of a (d)R4.5
5,000 customers product X is given as: Dx Demand of Tea e m a n d of 6 a Demand Of lea
Demand of1ea
for the
product, then market 12-2Px,
=

where Px stands for price. l (in units)

Un unis)
40,000 demand for the
(C) 20,000 product at market a)
price ot
**. Ine
following movement in the demand
curve Is because of:
36. Two (d) 16000
commoditiesA and
(a) Rise in price of one
B
can be increase in price of given commodity

leads to an interred
as close ta
substitutes of
demand ot other and each
0) Decrease in price of given commodiy
ncrease in other if:
(d) o
vice-versa C) Increase in price of substitute good
Rise o nofo lead to tall in demand of other ona
in price one load to rise One, but d vice-versa
(a) Decrease in price of compiementary go0d
37. in demand not the
Agoods can be of other
one, but not theother way round
in demand olf considered nofmal good tan
a
the given
good increase in income of other way round Demand (in units)
the
consumer causes
3.44
Introductory Microe
45. What does the
following diagram represent?

Ol Q Q Q,

Demand
(in units)
(a) Change in Demand (6) Change in Quantity Demanded
(c) Both (a) and (b) (d) Neither (a) nor (b)
46. Which of the following represents market demand curve?

Ds

OQuantity Demand
(a) D,D,
(6) DgD3
(c) D,D2
(d) None of the above
47. Which of the following diagram represents the situation of 'Expansion in Demand'?

D D
X
Demand (in units) Demand (in units)
Demand (in units) Demand (in units)
(a) (b)
18. The slope of demand curve is (d)
generaly:
(a) Negative
(c) Constant (6) Positive
(d) Either (a) or (b)
9. Any statement about demand for a
good is considered
mentioned in it (Choose the correct complete only when the following
(a) Price of the good
alternative):
(b) Quantity of the
(C) Period of time
(d) All of the above
good
D. Good X and good Y are
complementary goods, while good X and good Z are
will happen to goodY and good z, if price of good X decreases? substitute goods.
(a) The demand for both goods, Y and
Z, will decrease
(b) The demand for both goods, Y and Z, will increase
(c) The demand for good Y ill increase and for
good Z will decrease
(d) The demand for good Y will decrease and for
good Z will increase
Demand

51. Which of the following is a reason for 'Change in

(a) ChangeinIncome Denand'?
(b) Chango in Pice of rolated goods
(C) Population increase (0) All of hose
Ans. 1.(a), (6): 2. (a), 3. (6), 4. (b); 5. (a), 6. (c),
14.(C): 15. (0), 16. (D), 17.(a); 18. (d): 19. (d); 7, (d); 0. (a), (b), 9. (a), 10, (0),11, (), (0), 12, (
20. 13.(
(c), 21, (d); 22. (a), (c); 23. (G), 24, (), 20, ), 2,
27. (c); 28. (©); 29. (d), 30. (b); 31. (c); 32. (a), 33.
(b), 34. (a), 36. (0), 36. (a), 37, (a), 38, (a), 0a
40. (6), 41, (a), 42. (0); 43. (d), 44, (a), 45. (b), 46. (b), 47, (a), 48. (a), 49, (0), 50. ),39,
01. (0)