# Free The Demand Curve 01 Practice Test - 11th Grade - Commerce

Individual demand refers to the quantity of the commodity that a consumer is able and willing to buy at each possible price during a given period of time.

A.

True

B.

False

#### SOLUTION

Solution : A

The given statement is true. Demand is the relationship between price and quantity demanded.

___ goods have positive income effect.

A.

Normal

B.

Inferior

C.

Complementary

D.

None of the above

#### SOLUTION

Solution : A

The demand for normal goods increases as income increases.

Demand for which of the following goods does not change with a change in income of the consumer?

A.

Normal goods

B.

Necessity goods

C.

Inferior goods

D.

None of the above

#### SOLUTION

Solution : B

Demand for necessary goods is inelastic.

When the price of the substitute goods rise then demand for a given commodity ___

A.

Rises

B.

Falls

C.

Remains constant

D.

May increase or decrease

#### SOLUTION

Solution : A

When the price of a good change, people will substitute to cheaper alternatives and vice-versa.

All but one of the following are assumed to remain the same while drawing an individual’s demand curve for a commodity. Which one is it ?

A.

The preference of the individual

B.

His monetary income

C.

The price of the good under consideration

D.

The price of other good

#### SOLUTION

Solution : C

In an individual demand curve for a commodity, the price of the good under consideration is not assumed to remain same.

Demand for a product should have the following pre-requisite

A.

Ability to buy

B.

Willingness

C.

Need

D.

All of these

#### SOLUTION

Solution : D

All of them are pre-requisites of demand for a product.

The value of elasticity of demand ranges from

A.

Zero to one

B.

One to infinity

C.

Zero to infinity

D.

None of these

#### SOLUTION

Solution : C

The value of elasticity of demand ranges from zero to infinity.

As a result of rise in consumer's income, demand curve for coarse grain (inferior good):

A.

becomes a horizontal straight line

B.

becomes a vertical straight line

C.

shifts to the right

D.

shifts to the left

#### SOLUTION

Solution : D

As a result of rise in consumer's income, demand curve for coarse grain (inferior good) shifts to the left.

In case of contraction of demand, we move:

A.

from lower to upper point on the same demand curve

B.

to right on the other demand curve

C.

from upper point to lower pint on the same demand curve

D.

to left on the other demand curve

#### SOLUTION

Solution : A

In case of contraction of demand, we move from lower to upper point on the same demand curve.

Which of the following statements about price elasticity of demand is INCORRECT?

A.

When the percentage decrease in the price of a good is greater than the percentage increase in its quantity demanded, the elasticity of demand for it is more than 1.

B.

When the percentage increase in the price of a good is greater than the percentage decrease in its quantity demanded, the elasticity of demand for it is less than 1.

C.

When the percentage decrease in the price of a good is greater than the percentage increase in its quantity demanded, the elasticity of demand for it is less than 1.

D.

When the percentage decrease in the price of a good is the same as the percentage increase in its quantity demanded, the elasticity of demand for it is equal to 1.

#### SOLUTION

Solution : B

eD=% change in q% change in p

You can see that option B is incorrect.