Classical

Business Economics - Business Economics MCQ

46:  

Price elasticity is computed by

A.

ep =( (P1 - P2) / Q1 ) X ((P1+P2) / Q2)

B.

ep = (((Q2- Q1) / Q1 ) / P1) X 100

C.

ep = ((Q2- Q1) / Q1 ) / ((P- P1) / P1)

D.

ep = (((Q2- Q1) / Q1 ) / Product) X 100

 
 

Option: C

Explanation :


47:  

Income elasticity is computed by

A.

ei = (Y2 - Y1 ) / e

B.

ei = (Y1 - Y2 ) / P1

C.

ei = ( (Q2 - Q1 ) / Q​) / ( (Y2 - Y1 ) / Y​)

D.

ei = (Q2 - Q1 ) / P

 
 

Option: C

Explanation :


48:  
Put into chronological order on the basis of development:
 l. Law of demand
2. Law of indifference
3. Law of diminishing marginal utility
4. Revealed preference curve
5. Indifference curve
A.

1 3 4 2 5

B.

1 5 3 4 2

C.

1 3 2 5 4

D.

1 2 3 4 5

 
 

Option: C

Explanation :


49:  
Other things remaining the same, when a consumer's income increases, his equilibrium point moves to
A.

A higher indifference curve

B.
To the left-hand side on the same indifference curve
C.
Remains unchanged on the same indifference curve
D.

A lower indifference curve

 
 

Option: B

Explanation :


50:  
Law of diminishing marginal utility is based on the assumption that
a. Tastes change over time
b. Consumption is continuous
c. Different units of goods consumed are homogeneous
Of these statements:

 

A.

Only a is true

B.

a and c are true

C.

b and c are true

D.

All are true

 
 

Option: A

Explanation :




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