Supply And Demand(Economics ) Questions and Answers

Question 1. A firm that makes profit in addition to normal profit is making ?
  1.    Economic profit
  2.    Accounting profit
  3.    Normal profit
  4.    supernormal profit
Explanation:-
Answer: Option D. -> supernormal profit
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 2. A measurement showing how quantity demanded varies with income is the ?
  1.    Price elasticity of demand
  2.    Cross-price elasticity of demand
  3.    budget elasticity of demand
  4.    income elasticity of demand
Explanation:-
Answer: Option D. -> income elasticity of demand
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 3. Firms are assumed to ________ costs and to ________ profits?
  1.    incur, desire
  2.    pay, make
  3.    charge earns
  4.    minimize, maximize
Explanation:-
Answer: Option D. -> minimize, maximize
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 4. The extra utility from consuming one more unit of a good is called ?
  1.    Marginal utility
  2.    Additional utility
  3.    Surplus utility
  4.    Bonus utility
Explanation:-
Answer: Option A. -> Marginal utility
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 5. Marginal revenue is the ________ when output is __________?
  1.    Change in average revenue, increased
  2.    Change in total revenue, increase by one unit
  3.    change in average revenue, increased by one unit
  4.    change in total revenue increased
Explanation:-
Answer: Option B. -> Change in total revenue, increase by one unit
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 6. If your income doubles and the prices of the goods you buy double then your demand for these goods will likely?
  1.    increase
  2.    not change
  3.    decrease
  4.    shift
Explanation:-
Answer: Option B. -> not change
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 7. The opportunity cost of a student is____________?
  1.    Course fees and rent
  2.    A loan from the bank
  3.    What the student could have earned in the best job available by not studying
  4.    What the student will earn after graduation
Explanation:-
Answer: Option C. -> What the student could have earned in the best job available by not studying
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 8. An upward shift in marginal cost _____ output and an upward shift in marginal revenue ______ output?
  1.    reduces; reduces
  2.    reduces; increases
  3.    increases; increases
  4.    increases; reduces
Explanation:-
Answer: Option B. -> reduces; increases
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 9. The price elasticity of demand measures ?
  1.    The responsiveness of quantity demanded to a change in price
  2.    How far a demand curve shifts
  3.    a change in price
  4.    a change in quantity demanded
Explanation:-
Answer: Option A. -> The responsiveness of quantity demanded to a change in price
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 10. Increased level consumption ?
  1.    shift aggregate supply to the right
  2.    shift aggregate supply to the left
  3.    shift aggregate demand to the right
  4.    shift aggregate demand to the left
Explanation:-
Answer: Option B. -> shift aggregate supply to the left
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
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