Which of the following is an exception to the law of demand, where the demand for a commodity increases as its price rises, due to its prestige value and social status enhancement?

Veblen effect or prestige goods effect

What is the characteristic of the demand for tied goods?

The demand for tied goods is inelastic.

The demand for tied goods is elastic.

The demand for tied goods has elastic demand.

The demand for tied goods is unrelated to other goods.

What does the term "utility" mean in the economic sense?

The satisfaction derived from the consumption of goods and services.

The total quantity of goods and services consumed.

The unlimited nature of human wants.

What are other names used for an indifference curve?

Iso-Utility Curve or Equal Utility Curve.

What is consumer surplus, and why is it considered important in economic theory, government policies, and business decision-making?

Consumer surplus is a measure of the benefits buyers receive from participating in a market, and it is important for understanding consumer welfare and making economic decisions.

Consumer surplus is the total value of goods and services consumed, and it is important because it reflects market demand.

Consumer surplus is the willingness to pay of each individual consumer, and it is important for determining the utility of a commodity.

Consumer surplus is the demand for a commodity, and it is important for setting market prices.

What does an indifference curve map represent in the context of consumer preferences?

A collection of indifference curves, each corresponding to a different level of satisfaction.

A graphical depiction of consumer income.

A set of curves indicating changing preferences over time.

A representation of budget constraints.

How does the concept of 'conspicuous necessities' influence the demand for certain goods?

The demand for such goods increases with a rise in their prices.

The demand for these goods is unaffected by changes in prices.

The demand for these goods decreases as their prices rise.

The demand for these goods is unpredictable.

What term is used in Economics to describe an increase in the quantity demanded as a result of a decrease in the price of a commodity, with other factors held constant?

Upward movement on the demand curve

What does advertising elasticity of demand measure, and how is it calculated?

It measures the percentage change in demand given a one percent change in advertising expenditure.

It measures the percentage change in advertising expenditure given a one percent change in demand.

It measures the percentage change in demand given a one percent change in the price of the good.

It measures the percentage change in sales given a one percent change in production costs.

Suppose in the market, the price initially is Rs. 4, and the quantity demanded is 12 units, while the quantity supplied is 25 units. What is the likely impact on the price?

The price will remain constant.

The market will reach equilibrium.

What does the term 'supply' specifically refer to in a market economy?

The amount of a good or service that producers are willing and able to offer for sale.

The quantity of a good or service that consumers are willing to purchase.

The production cost of a good or service.

The total quantity of goods and services available in the market.

Under what conditions is the Law of Diminishing Marginal Utility likely to be less applicable?

When the units consumed are identical in all respects.

When there is a time gap between the consumption of different units.

When different units consumed consist of standard units.

When the consumer's income remains unchanged.

What effect does a rise in the price of an input (factor of production) have on the supply of a product?

It has no effect on the supply.

It depends on the nature of competition in the market.

Which property of indifference curves indicates that as a consumer consumes more of one good, the consumer is willing to give up less of the other good?

Indifference curves slope downward to the right.

Indifference curves are always convex to the origin.

Indifference curves can never intersect each other.

A higher indifference curve represents a higher level of satisfaction than the lower indifference curve.

Analyze the following statements and choose the correct option: Statement 1: The law of diminishing marginal utility is not applicable in this scenario. Statement 2: Total utility always increases as long as marginal utility is positive. Statement 3: Marginal utility becomes negative when total utility is at its maximum. Statement 4: The consumer is rational because total utility is maximized at the point where marginal utility is negative.

Only Statement 2 and Statement 3 are correct.

Only Statement 3 and Statement 4 are correct.

Only Statement 1 and Statement 2 are correct.

All the statements are correct.

What is the relationship between Total Utility (TU) and Marginal Utility (MU) in consumer behavior theory?

TU is the sum total of utilities derived from the consumption of all units, which is the same as the sum of marginal utilities (TU = Σ MU).

TU is the difference between MU and the number of units consumed.

Consider a scenario where two indifference curves, representing different levels of satisfaction, intersect. Analyze the following statements and choose the correct option: Statement 1: The intersection of indifference curves signifies a point of maximum satisfaction. Statement 2: Indifference curves cannot intersect as it would imply contradictory levels of satisfaction. Statement 3: The non-intersection of indifference curves is necessary for determining consumer preferences. Statement 4: Indifference curves may intersect, but it does not impact the analysis of consumer choices.

Only Statement 1 and Statement 3 are correct.

Only Statement 2 and Statement 3 are correct.

Only Statement 2 and Statement 4 are correct.

All the statements are correct.

Consider the market for stocks and shares, which is characterized as a speculative market. What is the likely demand behavior in this market?

Demand increases when prices decline and decreases when prices rise.

Demand increases when prices rise and decreases when prices decline.

Demand remains constant regardless of price changes.

Demand is not influenced by price changes.

What are the two effects that act in opposite directions on total revenue when a seller raises the price of a good?

Quality effect and Quantity effect

Price effect and Quantity effect

Elastic effect and Inelastic effect

Supply effect and Demand effect

What is the Snob Effect in economics, and how does it influence the demand for a commodity?

The desire for a unique commodity with prestige value, decreasing demand

The desire to conform to popular trends, increasing demand

The psychological effect of following others, increasing demand

The effect of income changes on demand, unpredictable

Analyze the following statements and choose the correct option: Statement 1: The law of diminishing marginal utility is not applicable in this scenario. Statement 2: Total utility always increases as long as marginal utility is positive. Statement 3: Marginal utility becomes negative when total utility is at its maximum. Statement 4: The consumer is rational because total utility is maximized at the point where marginal utility is negative.

Only Statement 2 and Statement 3 are correct.

Only Statement 1 and Statement 2 are correct.

Only Statement 3 and Statement 4 are correct.

All the statements are correct.

Economics Chapter 2

Quiz

•

Education

•

12th Grade

•

Practice Problem

•

Hard

G Classes

Used 1+ times

FREE Resource

41 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Suppose a consumer’s income increases from Rs. 30,000 to Rs. 36,000. As a result, the consumer increases her purchases of compact discs (CDs) from 25 CDs to 30 CDs. What is the consumer’s income elasticity of demand for CDs? (Use Arc Elasticity Method)

0.5

1

1.5

2

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the characteristic feature of unit-elastic supply?

The coefficient of elasticity is zero.

The percentage change in quantity supplied is equal to the percentage change in price.

The quantity supplied remains constant regardless of changes in price.

The coefficient of elasticity is greater than one.

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does it mean when the elasticity of supply is greater than one, indicating a relatively elastic supply?

The percentage change in quantity supplied is less than the percentage change in price.

The percentage change in quantity supplied is equal to the percentage change in price.

The percentage change in quantity supplied is greater than the percentage change in price.

The quantity supplied remains constant regardless of changes in price.

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the total market quantity demanded at a price of $6?

25 units

27 units

30 units

35 units

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does effective demand in economics depend on?

Desire only

Desire and willingness to pay

Desire, means to purchase, and willingness to pay

Means to purchase only

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In the given demand function Qx = f(PX, Y, Pr), what does the symbol Qx represent?

Price of the commodity

Quantity demanded of product X

Money income of the consumer

Price of related goods

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In Economics, when the demand for a commodity decreases with a rise in its price, it is known as:

Contraction of demand

Expansion of demand

No change in demand

None of the above

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Economics Chapter 2

41 questions

Suppose a consumer’s income increases from Rs. 30,000 to Rs. 36,000. As a result, the consumer increases her purchases of compact discs (CDs) from 25 CDs to 30 CDs. What is the consumer’s income elasticity of demand for CDs? (Use Arc Elasticity Method)

What is the characteristic feature of unit-elastic supply?

What does it mean when the elasticity of supply is greater than one, indicating a relatively elastic supply?

What is the total market quantity demanded at a price of $6?

What does effective demand in economics depend on?

In the given demand function Qx = f(PX, Y, Pr), what does the symbol Qx represent?

In Economics, when the demand for a commodity decreases with a rise in its price, it is known as:

What is the relationship between the price of a commodity and its demand, according to the text?

What psychological effect is described where individuals tend to do the same as others without having their own beliefs and thinking, leading to an increase in the demand for a particular commodity?

Who is credited with propounding the concept of consumer surplus?

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