Supply & Demand Mcqs - Set 6

1)   If demand is __________ then price cuts will _________ spending?

a. inelastic; increase
b. elastic; increase
c. elastic, decrease
d. none of the above
Answer  Explanation 

ANSWER: elastic; increase

Explanation:
No explanation is available for this question!


2)   Increased levels of spending on imports ?

a. shift aggregate supply to the right
b. shift aggregate supply to the left
c. shift aggregate demand to the right
d. shift aggregate demand to the left
Answer  Explanation 

ANSWER: shift aggregate demand to the left

Explanation:
No explanation is available for this question!


3)   Increase unemployment benefits and less incentive to work would ?

a. shift aggregate supply to the right
b. shift aggregate supply to the left
c. shift aggregate demand to the right
d. shift aggregate demand to the left
Answer  Explanation 

ANSWER: shift aggregate supply to the right

Explanation:
No explanation is available for this question!


4)   Which of the following would decease aggregate demand ?

a. increase consumption
b. increasing export revenue
c. increased taxation revenue
d. increased investment
Answer  Explanation 

ANSWER: increasing export revenue

Explanation:
No explanation is available for this question!


5)   An increase in aggregate demand will have most effect on prices if ?

a. Aggregate supply is price inelastic
b. Aggregate supply is price elastic
c. Aggregate supply has a unitary price elasticity
d. Aggregate demand is price inelastic
Answer  Explanation 

ANSWER: Aggregate supply is price elastic

Explanation:
No explanation is available for this question!


6)   A shift in aggregate supply is likely to ?

a. Reduce the general price level and reduce national income
b. Reduce the general price level and increase national income
c. Increase the general price level and reduce national income
d. Increase the general price level and increase national income
Answer  Explanation 

ANSWER: Reduce the general price level and reduce national income

Explanation:
No explanation is available for this question!


7)   An increase in price from 25 pence to 30 pence leads to an increase in the quantity supplied from 40 units to 44 units. The price elasticity of supply is ?

a. +2
b. +0.5
c. -2
d. -0.5
Answer  Explanation 

ANSWER: +0.5

Explanation:
No explanation is available for this question!


8)   An increase in price all other things unchanged leads to ?

a. A shift in supply outwards
b. A shift in supply inwards
c. A contraction of supply
d. An extension of supply
Answer  Explanation 

ANSWER: An extension of supply

Explanation:
No explanation is available for this question!


9)   A contraction in supply occurs when ?

a. Demand shifts outwards
b. The supply curve shifts inwards
c. The quantity supplied falls when the price falls
d. The supply curve shifts outwards
Answer  Explanation 

ANSWER: The quantity supplied falls when the price falls

Explanation:
No explanation is available for this question!


10)   Supply is likely to be more price elastic ?

a. In the short run rather than the long run
b. If factors of production are relatively immobile between industries
c. If there are very few producers
d. If it is easy to expand output
Answer  Explanation 

ANSWER: If it is easy to expand output

Explanation:
No explanation is available for this question!