Fundamentals Of Economics MCQ - Fundamentals Of Economics Section 1

46 Price elasticity is computed by

A
e_p =( (P₁ - P₂) / Q₁ ) X ((P₁+P₂) / Q₂)
B
e_p = (((Q₂- Q₁) / Q₁ ) / P₁) X 100
C
e_p = ((Q₂- Q₁) / Q₁ ) / ((P₂- P₁) / P₁)
D
e_p = (((Q₂- Q₁) / Q₁ ) / Product) X 100

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Correct AnswerOption C

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47 Income elasticity is computed by

A
e_i = (Y₂ - Y₁ ) / e₁
B
e_i = (Y₁ - Y₂ ) / P₁
C
e_i = ( (Q₂ - Q₁ ) / Q₁) / ( (Y₂ - Y₁ ) / Y₁)
D
e_i = (Q₂ - Q₁ ) / P₁

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Correct AnswerOption C

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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

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Correct AnswerOption C

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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

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Correct AnswerOption A

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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

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