introduction to micro economics section 8 MCQ Questions & Answers Detailed Explanation
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The following question based on Introduction to Micro Economics topic of indian economy mcq
(a) can be any of the above
(b) rises
(c) falls
(d) remains constant
The correct answers to the above question in:
Answer: (b)
Some goods are known as inferior goods. With inferior goods, there is an inverse relationship between real income and the demand for the good in question.
If real incomes rise, the demand for an inferior good will fall. If real incomes fall (in a recession, for instance), the demand for an inferior good will rise.
Example: Bus travel. As people get richer, they are more likely to buy themselves a car, or use a taxi, rather than rely on the more inferior bus, so the demand for bus travel falls as real incomes rise.
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Read more introduction to micro economics Based Indian Economy Questions and Answers
Question : 1
The expenses on advertising is called
a) Selling cost
b) Implicit cost
c) Surplus cost
d) Fixed cost
Answer »Answer: (a)
Selling cost is total cost of marketing, advertising, and selling a product. It differs from the production cost which is incurred to produce goods. Selling cost influences the commercial desire to purchase a commodity.
Question : 2
If the change in demand for a commodity is at a faster rate than change in the price of the commodity, the demand is
a) inelastic
b) perfectly inelastic
c) elastic
d) perlectly elastic
Answer »Answer: (d)
If quantity demanded changes by a very large percentage as a result of a tiny percentage change in price, then the demand is said to be perfectly elastic.
It reflects the fact that the quantity demanded is extremely responsive to even a small change in price.
Technically, the elasticity in this extreme case would be undefined but it approaches negative infinity as demand becomes more elastic.
Question : 3
Which one of the following pairs of goods is an example for Joint Supply ?
a) Wool and Mutton
b) Coffee and Tea
c) Ink and Pen
d) Tooth brush and Paste
Answer »Answer: (a)
The production of two or more goods simultaneously from the same imputs is called Joint Supply. Wool and Mutton are an example for joint supply.
GET Introduction to Micro Economics PRACTICE TEST EXERCISES
introduction to micro economics section 1
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introduction to micro economics section 8
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