Unit 3: Demand Analysis — Online MCQ Test
ECONOMICS · CLASS 11 INTERMEDIATE 1 YEAR · Telangana State Board
Practice Unit 3: Demand Analysis with a free chapter-wise online MCQ test.
This chapter covers: Focusing on demand theory this chapter details Law of Demand demand schedule determinants price elasticity income elasticity cross elasticity and demand forecasting methods..
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Unit 3: Demand Analysis — Important Questions & Answers
What does the Law of Demand state?
- A. When price rises, quantity demanded rises
- B. When price falls, quantity demanded rises, other things remaining the same
- C. Demand is fixed regardless of price
- D. Quantity demanded and price always move in the same direction
Answer: B. When price falls, quantity demanded rises, other things remaining the same
The Law of Demand states an inverse relationship between price and quantity demanded, assuming other factors remain constant.
The Law of Demand states an inverse relationship between price and quantity demanded, assuming other factors remain constant.
Which of the following is a demand schedule?
- A. A list showing prices and corresponding quantities demanded
- B. A list of costs of production
- C. A statement of supply conditions
- D. A tax table for consumers
Answer: A. A list showing prices and corresponding quantities demanded
A demand schedule shows various prices of a commodity and the quantities demanded at each price.
A demand schedule shows various prices of a commodity and the quantities demanded at each price.
If the price of tea rises and the demand for coffee increases, tea and coffee are:
- A. Complementary goods
- B. Inferior goods
- C. Substitute goods
- D. Giffen goods
Answer: C. Substitute goods
When the rise in price of one good increases demand for another, the two are substitutes.
When the rise in price of one good increases demand for another, the two are substitutes.
Which of the following goods is most likely to have a relatively inelastic demand?
- A. Salt
- B. Luxury car
- C. Brand-new smartphone
- D. Movie tickets
Answer: A. Salt
Necessities like salt have few close substitutes and are usually demanded even when prices change.
Necessities like salt have few close substitutes and are usually demanded even when prices change.
A rise in the price of petrol leads to a fall in demand for cars. This indicates that petrol and cars are:
- A. Complementary goods
- B. Substitute goods
- C. Inferior goods
- D. Independent goods
Answer: A. Complementary goods
A rise in the price of one complementary good reduces demand for the other, so petrol and cars are complements in this context.
A rise in the price of one complementary good reduces demand for the other, so petrol and cars are complements in this context.