Demand

1. Keeping other factors constant, the demand for a commodity and price are

• a. Directly related

• b. Inversely related

• c. Not related

• d. Related occasionally

Answer explanation

2. The purchasing power of the consumer is determined by?

• a.      Price of complementary goods

• b. Demand

• c. Level of income

• d. Taste and preferences of consumer

3.     Which of the following statements is not true about demand curve?

• a. A demand curve is a graphical presentation of the demand schedule.

• b. It is obtained by plotting a demand schedule.

• c. It has a positive slope.

• d. The downward sloping demand curve is in accordance with the law of demand which, as stated above, describes an inverse price-demand relationship.

4. According to Marshall, the consumer has ___________for each additional unit of a commodity and therefore, he will be willing to pay only less for each additional unit.

• a. diminishing utility

• b. increasing utility

• c. demand utility

• d. marginal utility

5. When the price of a commodity falls, the consumer can buy the same quantity of the commodity with lesser money or he can buy more of the same commodity with the same amount of money. What is this called?

• a. Substitution effect

• b.     Bandwagon effect

• c.      Income effect

• d. Veblen effect

6. Which of the following is not an exception to the law of demand?

• a. Conspicuous necessities

• b. Conspicuous goods

• c. Substitute goods

• d. Speculative goods