demand & supply, profit loss, inflation & price index section 3 MCQ Questions & Answers Detailed Explanation

Question : 1

Which of the following statements is/are true?

1. If increase in demand and supply are of equal magnitude, the price will remain unchanged, but the equilibrium quantity will increase.
2. If increase in demand is of greater magnitude than increase in supply, both equilibrium price and equilibrium quantity will increase.
3. If increase in supply is of greater magnitude than increase in demand, equilibrium price will fall but equilibrium quantity will increase.

a) 1 and 2 only

b) 2 and 3 only

c) 1 only I

d) 1, 2 and 3

Question : 2

For measuring the changes in the price level of the country, which among the following index number is used?

a) Security price index number

b) Wholesale price index number

c) Consumer price index number

d) Production index number

Question : 3

Which one among the following pairs is not correctly matched?

a) When total product reaches its maximum : Marginal product becomes zero

b) When total product increases at an increasing rate : Marginal product increases

c) When total product : Marginal increases at a diminishing rate , product declines

d) When total product begins to decline : Marginal product becomes positive

Question : 4

Which one of the following is not a method to control inflation?

a) Reducing the rate of interest

b) Rationing of commodities

c) Controlling the demand

d) Controlling the supply of money

Question : 5

The base of Consumer Price Index for Industrial Workers is being shifted from 1982 to—

a) 1998

b) 2000

c) 1995

d) 2001

Question : 6

Inflation is best described as

a) increase in purchasing power

b) increase in price of particular goods

c) high prices

d) increase in price index