Question 1. The capital that is consumed by an economy or a firm in the production process is known as
Capital loss
Production cost
Dead-weight loss
Depreciation
Explanation:-
Answer: Option D. -> Depreciation
Question 2. Who propounded the opportunity cost theory of international trade?
Ricardo
Marshall
Heckscher & Ohlin
Haberler
Explanation:-
Answer: Option D. -> Haberler
Question 3. Which among the following statement is INCORRECT?
On a linear demand curve, all the five forms of elasticity can be depicted
If two demand curves are linear and intersecting each other, then, coefficient of elasticity would be same on different demand curves at the point of intersection.
If two demand curves are linear and parallel to each other, then, at a particular price, the coefficient of elasticity would be different on different demand curves.
The price elasticity of demand is expressed in terms of relaive not absolute changes in Price and Quantity demanded.
Explanation:-
Answer: Option C. -> If two demand curves are linear and parallel to each other, then, at a particular price, the coefficient of elasticity would be different on different demand curves.
Question 4. If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to
Increase
Decrease
Remain the same
Become zero
Explanation:-
Answer: Option A. -> Increase
Question 5. The horizontal demand curve parallel to x-axis implies that the elasticity of demand is
Zero
Infinite
Equal to 1
Greater than zero but less than infinity
Explanation:-
Answer: Option B. -> Infinite
Question 6. An individual demand curve slopes downward to the right because of the
Working of the law of diminishing marginal utility
Substitution effect of decrease in price
Income effect of fall in price
All of the above
Explanation:-
Answer: Option D. -> All of the above
Question 7. Income elasticity of demand is defined as the responsiveness of
Quantity demanded to a change in income
Quantity demanded to a change in price
Price to a change in income
Income to a change in quantity demanded
Explanation:-
Answer: Option A. -> Quantity demanded to a change in income
Question 8. The supply of a good refers to
Stock available for sale
Total stock in the warehouse
Actual production of the good
Quantity of the good offered for sale at a particular price per unit of time
Explanation:-
Answer: Option D. -> Quantity of the good offered for sale at a particular price per unit of time
Question 9. The cost of one thing in terms of the alternative given up is called
Real cost
Production cost
Physical cost
Opportunity cost
Explanation:-
Answer: Option D. -> Opportunity cost
Question 10. Assume that consumer's income and the number of sellers in the market for good X both falls. Based on this information, we can conclude with certaintty that the equilibrium
