Supply and Demand AFCAT Questions

AFCAT Indian Economy

Supply and Demand MCQ Questions


7.
If consumers expect the price of a commodity to rise sharply in the near future, what is the likely immediate effect on its current demand, even without a current price fall?
A.
Current demand remains unaffected by expectations
B.
Current demand decreases
C.
Current demand increases, as buyers purchase more now in anticipation of the future price rise
D.
Current supply increases sharply
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ANSWER :
C. Current demand increases, as buyers purchase more now in anticipation of the future price rise
8.
A 'movement along the demand curve' (as opposed to a shift of the demand curve) is caused by:
A.
A change in the income of the consumer
B.
A change in the price of a related good
C.
A change in the price of the commodity itself, with all other factors held constant
D.
A change in consumer tastes and preferences
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ANSWER :
C. A change in the price of the commodity itself, with all other factors held constant
9.
A 'shift of the demand curve' to a new position (rather than a movement along it) is caused by a change in:
A.
Any determinant of demand other than the price of the good itself, such as income or tastes
B.
The quantity demanded at the prevailing price
C.
The price of the good itself
D.
The slope of the existing demand curve only
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ANSWER :
A. Any determinant of demand other than the price of the good itself, such as income or tastes
10.
A demand schedule is best described as:
A.
A record of past purchases made by a household
B.
A government document fixing the price of a commodity
C.
A tabular statement showing the quantities of a commodity that buyers are willing to purchase at various prices
D.
A list of all commodities a consumer wishes to own
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ANSWER :
C. A tabular statement showing the quantities of a commodity that buyers are willing to purchase at various prices
11.
Market demand for a commodity is obtained by:
A.
Adding the demand and supply curves together
B.
Averaging the demands of all buyers in the market
C.
Multiplying individual demand by the number of sellers
D.
Horizontally summing the individual demands of all buyers in the market at each price
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ANSWER :
D. Horizontally summing the individual demands of all buyers in the market at each price
12.
Effective demand differs from mere desire for a commodity because effective demand requires:
A.
Government approval to purchase the commodity
B.
Only sufficient income, regardless of willingness
C.
Only a strong desire to own the commodity
D.
Willingness to buy, ability to pay, and a definite price, all present together
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ANSWER :
D. Willingness to buy, ability to pay, and a definite price, all present together