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MICRO Key TO QUIZ 2.4

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5 views3 pages

MICRO Key TO QUIZ 2.4

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223317
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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The Institute of Management Sciences, Lahore

Management Sciences
Semester Spring-2025
QUIZ - 02

Course Title: MICROECONOMICS Marks: 10


Course Instructor : Dr. Afzal Mahmood

QUIZ 2.4
MCQs

1. Price elasticity of demand for necessities tends to be:


A) Highly elastic
B) Perfectly elastic
C) Inelastic
D) Unitary
2. An example of a perfectly inelastic good:
A) Chocolate
B) Insulin for diabetics
C) Clothing
D) Mobile phones
3. If demand increases and supply remains constant, equilibrium price:
A) Rises
B) Falls
C) Remains constant
D) Cannot be determined
4. In which situation is elasticity infinite?
A) Perfectly elastic demand
B) Perfectly inelastic demand
C) Unit elasticity
D) Inelastic supply
5. Demand for luxury goods tends to be:
A) Elastic
B) Inelastic
C) Unitary
D) Perfectly elastic
6. Movement along the demand curve is caused by:
A) Change in tastes
B) Change in price of the good
C) Change in income
D) Change in population
7. Indifference curves are convex to the origin because of:
A) Decreasing marginal rate of substitution
B) Increasing marginal rate of substitution
C) Constant marginal rate of substitution
D) Law of supply
8. The Engel curve shows relationship between:
A) Price and consumption
B) Income and consumption
C) Price and income
D) Supply and demand
9. Decrease in supply leads to:
A) Increase in price
B) Decrease in price
C) No effect on price
D) Lower demand
10. Cross elasticity of demand between two substitutes is:
A) Negative
B) Positive
C) Zero
D) Cannot be measured
11. The slope of a budget line changes when:
A) Income changes
B) Price of one good changes
C) Tastes change
D) Time period changes
12. Which factor does not affect supply?
A) Cost of production
B) Technology
C) Taxes and subsidies
D) Consumer income
13. Giffen goods are inferior goods where:
A) Price rise increases quantity demanded
B) Price fall decreases quantity demanded
C) Price fall increases quantity demanded
D) No change in demand
14. In case of perfect substitutes, the indifference curve is:
A) Convex
B) Concave
C) Straight line
D) Vertical
15. Market shortage occurs when:
A) Supply exceeds demand
B) Demand exceeds supply
C) Price falls
D) No buyers exist

Answer Key

1. C
2. B
3. A
4. A
5. A
6. B
7. A
8. B
9. A
10. B
11. B
12. D
13. A
14. C
15. B

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