ECONOMICS TEST (CA FOUNDATION ELITE GROUP ✨)

Which of the following is NOT a determinant of demand?

• Cost of production

• Price of related goods

• Income of the consumer

• Price of the commodity

If the price of a substitute good increases, what will happen to the demand for the original good?

• Increase

• Decrease

• Remain unchanged

• May increase or decrease depending on the elasticity

When the price of a good decreases, what happens to its quantity demanded, ceteris paribus?

• Increases

• Decreases

• Remains unchanged

• Becomes elastic

Which of the following is a determinant of supply?

• Consumer preferences

• Population size

• Technology

• NONE

When there is a surplus in the market, what happens to the price and quantity traded?

• Price increases, quantity decreases

• Price decreases, quantity increases

• Price decreases, quantity decreases

• Price increases, quantity increases

Elasticity of demand measures:

• The responsiveness of quantity demanded to a change in price

• The responsiveness of price to a change in quantity demanded

• The total demand in the market

• The sensitivity of demand to income changes

When demand is perfectly inelastic, the price elasticity of demand is:

• 0

• 1

• INFINITE

• CANT BE DETERMINED

Which of the following factors does NOT influence the elasticity of supply?

• Time period

• Availability of substitutes in production

• Ease of storing the product

• Nature of the product

If the demand for a product increases and there is no change in supply, what will happen to the equilibrium price and quantity?

• Price increases, quantity decreases

• Price decreases, quantity increases

• Price and quantity both increase

• Price and quantity both decrease

What happens to the equilibrium price and quantity when both demand and supply increase?

• Price increases, quantity decreases

• Price decreases, quantity increases

• Price increases, quantity increases

• Price decreases, quantity decreases