Theory of Demand MCQ Demand Analysis Economics Class 11

MCQ on Theory of Demand Analysis with Answers

Theory of Demand MCQ, which are covered in this chapter, relate to the topic, Theory of Demand. Theory of Demand MCQ Test contains 20 questions. Answers to Theory of Demand MCQ are available after clicking on the answer.

1.Demand for a commodity refers to:

(a)Desire for the commodity

(b)Need for the commodity

(c)Quantity demanded of that commodity

(d)Quantity of the commodity demanded at a certain price during any particular period of time.

Answer

Answer: (d) Quantity of the commodity demanded at a certain price during any particular period of time.


 

2.In case of an inferior good, the income elasticity of demand is:

(a)Positive

(b)Zero

(c)Negative

(d)Infinite

Answer

Answer: (c) Negative


 

3.For what type of good does demand fall with a rise in income levels of households?

(a)Inferior goods

(b)Substitutes

(c)Luxuries

(d)necessities

Answer

Answer: (A) Inferior goods


 

4.In case of Inferior goods like bajra, a fall in its price tends to:

(a)Make the demand remain constant

(b)Reduce the demand

(c)Increase the demand

(d)Change the demand in an abnormal way

Answer

Answer: (b) Reduce the demand





5.Movement along the same demand curve shows:

(a)Expansion of demand

(b)Expansion of supply

(c)Expansion and contraction of demand

(d)Increase and decrease of demand

Answer

Answer: (c) Expansion and contraction of demand


 

Theory of Demand MCQ

6.The price of hot – dogs increase by 22% and the quantity demanded falls by 25% this indicates that demand for hot dogs is:

(a)Elastic

(b)Inelastic

(c)Unitary elastic

(d)Perfectly elastic

Answer

Answer: (A) Elastic


 

7.What is an Engels curve?

(a)Another name of demand curve

(b)Curve showing both demand & supply curves

(c)Curve named after Lord Engels

(d)All

Answer

Answer: (c) Curve named after Lord Engels


 

8.Which factor generally keeps the price – elasticity of demand for a good low:

(a)Variety of uses for that good

(b)Its low price

(c)Close substitutes for that good

(d)High proportion of the consumer’s income spent on it

Answer

Answer: (d)High proportion of the consumer’s income spent on it





9.In case of a straight line demand curve meeting the two axes, the price elasticity of demand at the midpoint of the line would be:

(a)0

(b)1

(c)1.5

(d)2

Answer

Answer: (b) 1


 

10.An increase in demand can result from:

(a)A decline in the market price

(b)An increase in income

(c)A reduction in the price of substitutes

(d)An increase in the price of complements

Answer

Answer: (b) An increase in income


 

Theory of Demand MCQ

11.Compute income elasticity if demand increases by 5% and income by 1%

(a)5

(b)1/5

(c)0

(d)None

Answer

Answer: (A) 5


 

12.For a commodity with a unitary elastic demand curve if the price of the commodity rises, then the consumer’s total expenditure on this commodity would:

(a)Increase

(b)Decrease

(c)Remains constant

(d)Either increase or decrease

Answer

Answer: (c) Remains constant


 

13.What is the value of elasticity of demand if the demand for the good is perfectly elastic?

(a)0

(b)1

(c) Infinity

(d)Less than 0

Answer

Answer: (c) Infinity


 

14.What is the original price of a commodity when price elasticity is 0.71 and demand changes form 20 units to 15 units and the new price is ` 10?

(a)5.4

(b)18

(c)20

(d)8

Answer

Answer: (A) 15.4


 

15.If the price of any complement goods rises :

(a)Demand curve shifts to left

(b)Demand curve shifts to right

(c)Demand curve moves downwards

(d)Demand curve moves upward

Answer

Answer: (A) Demand curve shifts to left


 

Theory of Demand MCQ

16.Cross elasticity of demand in Monopoly market is:

(a)Elastic

(b)Zero

(c)Infinite

(d)One

Answer

Answer: (b) Zero


 

17.What is income elasticity of demand, when income changes by 20% and demand changes by 40%

(a)1/2

(b)2

(c)0.33

(d)None

Answer

Answer: (b) 2





18.Giffen Paradox is an exception of

(a)Demand

(b)Supply

(c)Production

(d)Utility

Answer

Answer: (A) Demand


 

19.Law of demand is a ______________

(a)Quantitative Statement

(b)Qualitative Statement

(c)Both a & b [point elasticity]

(d) hypothetical

Answer

Answer: (b) Qualitative Statement


 

20.When the total expenditure incurred by the consumers on a commodity due to a change is its price remains the same, then the elasticity of demand for that commodity will be:

(a)Zero

(b)One

(c)More than one

(d)Less than one

Answer

Answer: (b) One


 

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