Q1:
3 June Shift 2
Micro > Market Equilibrium
Easy
If the government fixed maximum price of product below the market price then product will have?
Correct Answer
Option 3
Correct Answer
CUET Economics Micro > Market Equilibrium PYQs
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Q2:
3 June Shift 2
Micro > Market Equilibrium
Easy
Read the passage carefully and answer the questions based on the passage:
Elasticity of Demand
The demand for a good moves in the opposite direction to its price. But the impact of the price change is always not the same. Sometimes, the demand for a good changes considerably even for small price changes. On the other hand, there are some goods for which the demand is not affected much by price changes. Demands for some goods are very responsive to price changes while demands for certain others are not so responsive to price changes. Price elasticity of demand is a measure of the responsiveness of the demand for a good to changes in its price. The price elasticity of demand for a good depends on the nature of the good and the availability of close substitutes of the good.
What is the formula for the price elasticity of demand for a good?
Correct Answer
Option 1
Correct Answer
Q3:
3 June Shift 2
Micro > Market Equilibrium
Medium
Read the passage carefully and answer the questions based on the passage:
Elasticity of Demand
The demand for a good moves in the opposite direction to its price. But the impact of the price change is always not the same. Sometimes, the demand for a good changes considerably even for small price changes. On the other hand, there are some goods for which the demand is not affected much by price changes. Demands for some goods are very responsive to price changes while demands for certain others are not so responsive to price changes. Price elasticity of demand is a measure of the responsiveness of the demand for a good to changes in its price. The price elasticity of demand for a good depends on the nature of the good and the availability of close substitutes of the good.
An individual buys $15$ kg of sugar when its price is Rs. $5$ per kg. When the price increases to Rs. $7$ per kg, the demand goes down to $12$ kg of sugar. What is the price elasticity of demand for sugar?
Correct Answer
Option 2
Correct Answer
Q4:
3 June Shift 2
Micro > Market Equilibrium
Easy
Read the passage carefully and answer the questions based on the passage:
Elasticity of Demand
The demand for a good moves in the opposite direction to its price. But the impact of the price change is always not the same. Sometimes, the demand for a good changes considerably even for small price changes. On the other hand, there are some goods for which the demand is not affected much by price changes. Demands for some goods are very responsive to price changes while demands for certain others are not so responsive to price changes. Price elasticity of demand is a measure of the responsiveness of the demand for a good to changes in its price. The price elasticity of demand for a good depends on the nature of the good and the availability of close substitutes of the good.
When the percentage change in quantity demanded equals the percentage change in its price. The demand for the this good is said to be? <ol> <li>Perfectly Elastic</li> <li>Perfectlty Inelastic</li> <li>Unitary Elastic</li> <li>Less Elastic</li> </ol>
Correct Answer
Option 3
Correct Answer
Q5:
3 June Shift 2
Micro > Market Equilibrium
Easy
The demand for a good moves in the opposite direction to its price. But the impact of the price change is always not the same. Sometimes, the demand for a good changes considerably even for small price changes. On the other hand, there are some goods for which the demand is not affected much by price changes. Demands for some goods are very responsive to price changes while demands for certain others are not so responsive to price changes. Price elasticity of demand is a measure of the responsiveness of the demand for a good to changes in its price. The price elasticity of demand for a good depends on the nature of the good and the availability of close substitutes of the good.
If the price of necessity good like clothes changes, what will be the effect on its demand?
Correct Answer
Option 3
Correct Answer
Q6:
3 June Shift 2
Micro > Market Equilibrium
Medium
Read the passage carefully and answer the questions based on the passage:
Elasticity of Demand
The demand for a good moves in the opposite direction to its price. But the impact of the price change is always not the same. Sometimes, the demand for a good changes considerably even for small price changes. On the other hand, there are some goods for which the demand is not affected much by price changes. Demands for some goods are very responsive to price changes while demands for certain others are not so responsive to price changes. Price elasticity of demand is a measure of the responsiveness of the demand for a good to changes in its price. The price elasticity of demand for a good depends on the nature of the good and the availability of close substitutes of the good.
The price and quantity demanded are __________
Correct Answer
Option 2
Correct Answer
Q7:
3 June Shift 1
Micro > Market Equilibrium
Medium
At a price of ₹8 per unit, the quantity supplied of a commodity is 200 units. If its price elasticity of supply is 1.5, if the price rises to ₹10 per unit, calculate the quantity supplied at the new price?
Correct Answer
Option 2
Correct Answer
Q8:
3 June Shift 1
Micro > Market Equilibrium
Medium
When both the demand and supply curves shift to indicate an increase in demand and supply in the same proportion. Then:
Correct Answer
Option 4
Correct Answer
Q9:
2 June Shift 1
Micro > Market Equilibrium
Easy
Suppose the demand and supply curves of salt are given by: $Q_d = 1000 - p$ $Q_s = 700 + 2p$ Find the equilibrium price and quantity.
Correct Answer
Option 1
Correct Answer
Q10:
2 June Shift 1
Micro > Market Equilibrium
Medium
If due to fall in price, total expenditure on the commodity falls, it indicates?
Correct Answer
Option 2
Correct Answer
Q11:
2 June Shift 1
Micro > Market Equilibrium
Medium
The price elasticity of supply of a commodity is 2.5. At a price of Rs.5 per unit, its quantity supplied is 300 units. What will be its quantity supplied at a price of Rs.4 per unit?
Correct Answer
Option 4
Correct Answer
Q12:
2 June Shift 1
Micro > Market Equilibrium
Medium
When will increase in supply bring down the price, leaving the quantity demanded unchanged?
Correct Answer
Option 2
Correct Answer
Q13:
2 June Shift 1
Micro > Market Equilibrium
Easy
What would price ceiling lead to when the maximum price is fixed lower than the equilibrium price?
Correct Answer
Option 3
Correct Answer
Q14:
2 June Shift 1
Micro > Market Equilibrium
Medium
An upward sloping straight line supply curve shooting from the X axis indicates the:
Correct Answer
Option 1
Correct Answer
Q15:
2 June Shift 1
Micro > Market Equilibrium
Medium
Which of the following is a demerit of price ceiling? (A) Black Marketing. (B) Stability of income of producers. (C) Low quality product is offered to consumer. (D) Standing in long queues to get allocated quota of the commodity. Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q16:
31 May Shift 1
Micro > Market Equilibrium
Medium
Match List-I with List-II | List-I | List-II | |---|---| | (A) Demand shifts right and supply remains unchanged. | (I) Price increase, quantity increases. | | (B) Supply shifts right and demand remains unchanged. | (II) Price decrease, quantity increases. | | (C) Demand shifts left and supply shifts left. | (III) Quantity decreases. | | (D) Supply shifts right and demand shifts right. | (IV) Quantity increases. | Choose the correct answer from the options given below: 1. (A) - (I), (B) - (II), (C) - (III), (D) - (IV) 2. (A) - (II), (B) - (I), (C) - (III), (D) - (IV) 3. (A) - (I), (B) - (II), (C) - (IV), (D) - (III) 4. (A) - (III), (B) - (IV), (C) - (I), (D) - (II)
Correct Answer
Option 1
Correct Answer
Q17:
31 May Shift 1
Micro > Market Equilibrium
Easy
If demand remains constant at any changes in price of commodity then the elasticity of demand for that commodity will be.................... 1. Zero 2. One 3. Between one and zero 4. Infinite
Correct Answer
Option 1
Correct Answer
Q18:
31 May Shift 1
Micro > Market Equilibrium
Easy
When the price elasticity of supply is equal to zero. Then.......... 1. Supply curve is sloping downward. 2. Supply curve is horizontal. 3. Supply curve is upwards sloping. 4. Supply curve is vertical.
Correct Answer
Option 4
Correct Answer
Q19:
31 May Shift 1
Micro > Market Equilibrium
Medium
Suppose in the long run, the government imposed a tax on the supply of a commodity. How does it affect the equilibrium quantity of commodity? 1. The quantity of commodity will decrease. 2. The quantity of commodity will increase. 3. The quantity of commodity will remain same. 4. The supply curve will shift rightwards which will decrease quantity of commodity.
Correct Answer
Option 1
Correct Answer
Q20:
31 May Shift 1
Micro > Market Equilibrium
Easy
The wage rate at which the labour market is in equilibrium is a point where. 1. Labour demand=0 2. Labour Demand= Labour Supply 3. Labour Supply=Labour Demand=0 4. Wages= Marginal Revenue from labour x Price
Correct Answer
Option 2
Correct Answer
Q21:
30 May Shift 2
Micro > Market Equilibrium
Medium
Arrange the following statement in the context of elasticity along a linear demand curve (left to right). (A) e_d = 1 (B) e_d > 1 (C) e_d = 0 (D) e_d < 1 Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q22:
30 May Shift 2
Micro > Market Equilibrium
Medium
The q (1 + e_p) < 0, and hence, ΔE (expenditure) has the opposite sign as Δp (price), if ...................
Correct Answer
Option 2
Correct Answer
Q23:
30 May Shift 2
Micro > Market Equilibrium
Medium
How government intervention through price control policy will have an impact on the market? (A) The government imposed lower limit on the price that may be charged (B) For certain goods and services, a fall in price below a particular level is not desirable (C) Thereby leading to an excess supply in the market (D) Government needs to buy the surplus at the predetermined price Choose the correct answer from the options given below:
Correct Answer
Option 1
Correct Answer
Q24:
30 May Shift 2
Micro > Market Equilibrium
Easy
A functional relation between the two variables expressed $y = 50 - x$, will have slope.
Correct Answer
Option 1
Correct Answer
Q25:
30 May Shift 2
Micro > Market Equilibrium
Medium
Match List-I with List-II | List-I | List-II | |---|---| | (A) Demand and supply curve shift leftward | (I) Quantity may increase, decrease or remain unchanged and price decreases | | (B) Demand and supply curve shift rightward | (II) Quantity may increase, decrease or remain unchanged and price increases | | (C) Demand curve shifts leftward and supply curve rightward | (III) Quantity decreases and price may increase, decrease or remain unchanged | | (D) Demand curve shifts rightward and supply curve leftward | (IV) Quantity increases and prices may increase, decrease or remain unchanged | Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q26:
30 May Shift 1
Micro > Market Equilibrium
Medium
When demand curve shift rightward and supply curve shift leftward what impact this will have on pricing?
Correct Answer
Option 3
Correct Answer
Q27:
30 May Shift 1
Micro > Market Equilibrium
Medium
What will be elasticity of demand of a commodity when its price rises by 20% and quantity demanded falls from 125 units to 75 units?
Correct Answer
Option 3
Correct Answer
Q28:
30 May Shift 1
Micro > Market Equilibrium
Medium
Match List-I with List-II | Change in Demand or Supply | Effect on equilibrium price / equilibrium quantity | |---|---| | (A) Increase in demand > Increase in supply | (I) equilibrium price will rise but no change in equilibrium quantity. | | (B) Increase in supply when demand is perfectly inelastic | (II) No change in equilibrium price. | | (C) Same proportion of increase in demand and supply | (III) equilibrium price will fall but no change in equilibrium quantity. | | (D) Increase In demand when supply is perfectly inelastic | (IV) equilibrium price and quantity will rise. | Choose the correct answer from the options given below:
Correct Answer
Option 1
Correct Answer
Q29:
30 May Shift 1
Micro > Market Equilibrium
Easy
Downward movement along the demand curve is caused by _________.
Correct Answer
Option 1
Correct Answer
Q30:
29 May Shift 2
Micro > Market Equilibrium
Medium
Arrange the following statements in chronological sequence about how government intervention in the form of price control has an impact on the market. (A) There will be an excess demand for sugar in the market at that price. (B) Government-imposed upper limit on the price of sugar. (C) Quantity of sugar can be distributed to everyone, through a system of rationing. (D) It could end up creating a shortage of sugar in the market. Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q31:
29 May Shift 2
Micro > Market Equilibrium
Medium
Match List-I with List-II | List-I | List-II | |---|---| | (A) Leftward shift in both the supply and demand curve | (I) Equilibrium price remains unchanged | | (B) Rightward shift in both supply and demand curve | (II) Equilibrium quantity increases | | (C) Equal percentage of increase in both demand and supply curves | (III) Equilibrium quantity decreases | | (D) Shifts in supply curve towards right and demand curve shifts left | (IV) Equilibrium quantity remains unchanged | Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q32:
29 May Shift 1
Micro > Market Equilibrium
Medium
Identify the correct sequence of events when a minimum support price is imposed: (A) Government buys the surplus at the predetermined price. (B) Situation of Surplus occurs due to imposition of floor price. (C) Government sets a minimum price. (D) Market equilibrium occurs by the intersection of demand and supply curves. Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q33:
29 May Shift 1
Micro > Market Equilibrium
Easy
If the price of a good increases from ₹20 to ₹25 and the quantity demanded decreases from 100 units to 80 units, calculate the price elasticity of demand.
Correct Answer
Option 3
Correct Answer
Q34:
28 May Shift 2
Micro > Market Equilibrium
Easy
A market where firms can choose where to locate production and workers can choose where to work is called?
Correct Answer
Option 2
Correct Answer
Q35:
28 May Shift 2
Micro > Market Equilibrium
Medium
Arrange the statements to define the relationship between elasticity and expenditure of a commodity. (A) The percentage increase in quantity demanded is greater than the percentage decline in the price. (B) The impact on expenditure depends on how responsive the demand for the good is to the price change. (C) The nature of price elasticity of demand is elastic. (D) Expenditure on the goods will increase. Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q36:
28 May Shift 2
Micro > Market Equilibrium
Easy
In the determination of a particular variable, the assumption of "ceteris paribus" stands for.
Correct Answer
Option 1
Correct Answer
Q37:
28 May Shift 2
Micro > Market Equilibrium
Medium
If supply curve shifts leftward and demand curve shifts rightward then how it will affect the pricing?
Correct Answer
Option 1
Correct Answer
Q38:
28 May Shift 1
Micro > Market Equilibrium
Medium
Match List-I with List-II | List-I | List-II | |---|---| | (A) Price elasticity of demand will be equal to1 | (I) When expenditure increases with a rise in price. | | (B) Price elasticity of demand will be equal to 0 | (II) When expenditure decreases with a rise in price. | | (C) Price elasticity of demand will be more than 1 | (III) When the quantity demanded doesn't change with the change in price. | | (D) Price elasticity of demand will be less than1 | (IV) When expenditure doesn't change with the change in price. | Choose the correct answer from the options given below: 1. (A) - (I), (B) - (II), (C) - (III), (D) - (IV) 2. (A) - (III), (B) - (IV), (C) - (II), (D) - (I) 3. (A) - (IV), (B) - (III), (C) - (II), (D) - (I) 4. (A) - (IV), (B) - (III), (C) - (I), (D) - (II)
Correct Answer
Option 3
Correct Answer
Q39:
27 May Shift 2
Micro > Market Equilibrium
Medium
Arrange the following statement of government intervention in the form of price control. (A) The government sets floors or minimum prices for these goods and services. (B) A fall in price below a particular level is not desirable. (C) The price charged for a particular good or service is called the price floor. (D) The government imposed a lower limit on the price. Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q40:
27 May Shift 2
Micro > Market Equilibrium
Medium
Arrange the following statement when the market demand curve shifts rightward with the supply curve remaining unchanged. (A) The shift indicates that at any price the quantity demanded is more than before. (B) Some individuals will be willing to pay higher price and the price would tend to rise. (C) There is excess demand. (D) At the new equilibrium, quantity and price will be greater than before. Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q41:
27 May Shift 2
Micro > Market Equilibrium
Hard
Let us consider a linear demand curve $q = a - bp$. On the same demand curve, arrange the elasticity in ascending order. (A) $|e_D| = 1$. (B) $|e_D| < 1$. (C) $|e_D| > 1$. (D) $|e_D| = 0$. Choose the **correct** answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q42:
26 May Shift 2
Micro > Market Equilibrium
Medium
Match List-I with List-II | List-I | List-II | |---|---| | (A) Increase in demand > Increase in Supply | (I) Increase in both equilibrium price and quantity. | | (B) Increase in demand < Increase in Supply | (II) Decrease in both equilibrium price and quantity. | | (C) Increase in demand = Increase in Supply | (III) Decrease in equilibrium price but increase in equilibrium quantity. | | (D) Decrease in demand < Decrease in supply | (IV) Increase in equilibrium quantity but no change in equilibrium price. | Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q43:
26 May Shift 2
Micro > Market Equilibrium
Easy
Comprehension:
Read the passage carefully and answer the questions based on the passage:
Concept of Price Ceiling
It is not very uncommon to come across instances where the government fixes a maximum allowable price for certain goods. The government-imposed upper limit on the price of a good or service is called a price ceiling. A price ceiling is generally imposed on necessary items like wheat, rice, kerosene, sugar etc. The objective of the price ceiling is to restrict the price of a good so that it becomes affordable for consumers to buy. However, it does not always generate the desired results. Most of the time, intervention by the government in the form of a price ceiling leads to various socio-problems.
Imposition of price ceilings usually results into?
Correct Answer
Option 1
Correct Answer
Q44:
26 May Shift 2
Micro > Market Equilibrium
Easy
Comprehension:
Read the passage carefully and answer the questions based on the passage:
Concept of Price Ceiling
It is not very uncommon to come across instances where the government fixes a maximum allowable price for certain goods. The government-imposed upper limit on the price of a good or service is called a price ceiling. A price ceiling is generally imposed on necessary items like wheat, rice, kerosene, sugar etc. The objective of the price ceiling is to restrict the price of a good so that it becomes affordable for consumers to buy. However, it does not always generate the desired results. Most of the time, intervention by the government in the form of a price ceiling leads to various socio-problems.
Suppose the market determined rent for apartments is \$200 per month. The government intervenes and sets the rent control at $250 per month. What is the likely impact of this intervention on market of apartments?
Correct Answer
Option 4
Correct Answer
Q45:
26 May Shift 2
Micro > Market Equilibrium
Easy
Comprehension:
Read the passage carefully and answer the questions based on the passage:
Concept of Price Ceiling
It is not very uncommon to come across instances where the government fixes a maximum allowable price for certain goods. The government-imposed upper limit on the price of a good or service is called a price ceiling. A price ceiling is generally imposed on necessary items like wheat, rice, kerosene, sugar etc. The objective of the price ceiling is to restrict the price of a good so that it becomes affordable for consumers to buy. However, it does not always generate the desired results. Most of the time, intervention by the government in the form of a price ceiling leads to various socio-problems.
Price ceilings are also known as............
Correct Answer
Option 3
Correct Answer
Q46:
26 May Shift 2
Micro > Market Equilibrium
Easy
Comprehension:
Read the passage carefully and answer the questions based on the passage:
Concept of Price Ceiling
It is not very uncommon to come across instances where the government fixes a maximum allowable price for certain goods. The government-imposed upper limit on the price of a good or service is called a price ceiling. A price ceiling is generally imposed on necessary items like wheat, rice, kerosene, sugar etc. The objective of the price ceiling is to restrict the price of a good so that it becomes affordable for consumers to buy. However, it does not always generate the desired results. Most of the time, intervention by the government in the form of a price ceiling leads to various socio-problems.
The market determined price of a good is Rs. 40.The government determines the price ceiling on the good as Rs. 25. Calculate the excess demand/excess supply it will cause if the demand and supply functions are Qd= 200 – p and Qs=120+ p respectively.
Correct Answer
Option 3
Correct Answer
Q47:
26 May Shift 2
Micro > Market Equilibrium
Easy
Comprehension:
Read the passage carefully and answer the questions based on the passage:
Concept of Price Ceiling
It is not very uncommon to come across instances where the government fixes a maximum allowable price for certain goods. The government-imposed upper limit on the price of a good or service is called a price ceiling. A price ceiling is generally imposed on necessary items like wheat, rice, kerosene, sugar etc. The objective of the price ceiling is to restrict the price of a good so that it becomes affordable for consumers to buy. However, it does not always generate the desired results. Most of the time, intervention by the government in the form of a price ceiling leads to various socio-problems.
In order to be effective, the price ceiling should be determined _______.
Correct Answer
Option 1
Correct Answer
Q48:
22 May Shift 2
Micro > Market Equilibrium
Medium
Arrange the following in correct sequence, to correct the problem of mismatch between supply and demand forces: (A) There is excess demand in the market. (B) All other things remain the same as price rises, quantity demanded falls and quantity supplied increases. (C) Some consumers who are either unable to obtain the commodity at all or obtain it in insufficient quantity will be willing to pay more than the prevailing prices. (D) The market moves towards the point where the quantity that the firms want to sell is equal to the quantity that the consumers want to buy. Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q49:
22 May Shift 1
Micro > Market Equilibrium
Medium
The price elasticity of demand is different at different points on the linear demand curve. Arrange the elasticity point on a downward sloping (left to right) demand curve. (A). |ed| < 0 (B). |ed| = 1 (C). |ed| > 1 (D). |ed| < 1 Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q50:
22 May Shift 1
Micro > Market Equilibrium
Easy
Firms can choose where to locate production and workers to choose where to work. There are various immigration laws which restrict the movement of labour between countries. This market is called...
Correct Answer
Option 4
Correct Answer
Q51:
21 May Shift 1
Micro > Market Equilibrium
Medium
A hurricane in some parts of the country destroyed a major part of the onion crop. Arrange the chain effects of the same on onion market in proper sequence. (A) There will be upward pressure on the price of onions. (B) The buyers will compete in order to get onions in the market. (C) Demand contracts and supply expands until the market achieves a new equilibrium. (D) The market supply of onions decreases, leading to excess demand for the same. Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q52:
21 May Shift 1
Micro > Market Equilibrium
Easy
Comprehension:
FLOOR PRICES
For certain goods and services, fall in price below a particular level is not desirable and hence the government sets floors or minimum prices for these goods and services. The government imposed lower limit on the price that may be charged for a particular good or service is called price floor. Most well-known examples of imposition of price floor are agricultural price support programmes and the minimum wage legislation. Through an agricultural price support programme, the government imposes a lower limit on the purchase price for some of the agricultural goods. Similarly, through the minimum wage legislation, the government ensures that the wage rate of the labourers does not fall below a particular level.
The market determined price of a good is Rs. 40.The government fixes the minimum price of the good as Rs. 50. Calculate the excess demand/excess supply it will cause if the demand and supply functions are Qd = 200 – p and Qs = 120 + p respectively.
Correct Answer
Option 2
Correct Answer
Q53:
21 May Shift 1
Micro > Market Equilibrium
Easy
Comprehension:
FLOOR PRICES
For certain goods and services, fall in price below a particular level is not desirable and hence the government sets floors or minimum prices for these goods and services. The government imposed lower limit on the price that may be charged for a particular good or service is called price floor. Most well-known examples of imposition of price floor are agricultural price support programmes and the minimum wage legislation. Through an agricultural price support programme, the government imposes a lower limit on the purchase price for some of the agricultural goods. Similarly, through the minimum wage legislation, the government ensures that the wage rate of the labourers does not fall below a particular level.
Floor prices are meant for the welfare of
Correct Answer
Option 2
Correct Answer
Q54:
21 May Shift 1
Micro > Market Equilibrium
Medium
Comprehension:
FLOOR PRICES
For certain goods and services, fall in price below a particular level is not desirable and hence the government sets floors or minimum prices for these goods and services. The government imposed lower limit on the price that may be charged for a particular good or service is called price floor. Most well-known examples of imposition of price floor are agricultural price support programmes and the minimum wage legislation. Through an agricultural price support programme, the government imposes a lower limit on the purchase price for some of the agricultural goods. Similarly, through the minimum wage legislation, the government ensures that the wage rate of the labourers does not fall below a particular level.
Imposition of price floors usually lead to following
Correct Answer
Option 2
Correct Answer
Q55:
21 May Shift 1
Micro > Market Equilibrium
Easy
Comprehension:
FLOOR PRICES
For certain goods and services, fall in price below a particular level is not desirable and hence the government sets floors or minimum prices for these goods and services. The government imposed lower limit on the price that may be charged for a particular good or service is called price floor. Most well-known examples of imposition of price floor are agricultural price support programmes and the minimum wage legislation. Through an agricultural price support programme, the government imposes a lower limit on the purchase price for some of the agricultural goods. Similarly, through the minimum wage legislation, the government ensures that the wage rate of the labourers does not fall below a particular level.
To be effective, the floor price should be determined
Correct Answer
Option 2
Correct Answer
Q56:
21 May Shift 1
Micro > Market Equilibrium
Easy
Comprehension:
FLOOR PRICES
For certain goods and services, fall in price below a particular level is not desirable and hence the government sets floors or minimum prices for these goods and services. The government imposed lower limit on the price that may be charged for a particular good or service is called price floor. Most well-known examples of imposition of price floor are agricultural price support programmes and the minimum wage legislation. Through an agricultural price support programme, the government imposes a lower limit on the purchase price for some of the agricultural goods. Similarly, through the minimum wage legislation, the government ensures that the wage rate of the labourers does not fall below a particular level.
The market determined wage rate is $500 per month whereas the minimum wage fixed by the government is $$450 per month. As a result of this government intervention,
Correct Answer
Option 3
Correct Answer
Q57:
16 May Shift 1
Micro > Market Equilibrium
Medium
Which of the following is incorrect with reference to the imposition of a price floor for a good?
Correct Answer
Option 2
Correct Answer
Q58:
16 May Shift 1
Micro > Market Equilibrium
Medium
What will be the shape of unitary elastic supply curve?
Correct Answer
Option 1
Correct Answer
Q59:
16 May Shift 1
Micro > Market Equilibrium
Medium
When the price of a good falls from Rs. 40 to Rs 30, the total revenue earned by the firm falls from Rs. 4000 to Rs. 2700, find price elasticity of supply for the good.
Correct Answer
Option Drop
Correct Answer
Q60:
16 May Shift 1
Micro > Market Equilibrium
Medium
In which of the following, the demand for a good will be highly price elastic?
Correct Answer
Option 2
Correct Answer
Q61:
15 May Shift 1
Micro > Market Equilibrium
Easy
If price of a commodity rises from Rs. 10 to Rs. 15, its supply increases by 20%. calculate the price elasticity of supply for this commodity.
Correct Answer
Option 1
Correct Answer
Q62:
15 May Shift 1
Micro > Market Equilibrium
Medium
Suppose there is a market consisting of identical firms producing the same quality of salt.
Suppose the market demand curve and the market supply curve for salt are given by:
$$Q_D = \begin{cases} 350 - p & \text{for } 0 \leq p \leq 350 \\ 0 & \text{for } p > 350 \end{cases}$$
$$Q_S = \begin{cases} 220 + p & \text{for } p \geq 10 \\ 0 & \text{for } 0 \leq p < 10 \end{cases}$$
Where $Q_D$ and $Q_S$ denote the demand for and supply of salt (in kg) respectively and $p$ denotes the price of salt per kg in rupees.
If the demand for salt increases supply remains the same and the new demand curve is $Q_D = 400 - p$ What will be the new equilibrium price and quantity?
Correct Answer
Option 1
Correct Answer
Q63:
15 May Shift 1
Micro > Market Equilibrium
Medium
Suppose there is a market consisting of identical firms producing the same quality of salt.
Suppose the market demand curve and the market supply curve for salt are given by:
$$Q_D = \begin{cases} 350 - p & \text{for } 0 \leq p \leq 350 \\ 0 & \text{for } p > 350 \end{cases}$$
$$Q_S = \begin{cases} 220 + p & \text{for } p \geq 10 \\ 0 & \text{for } 0 \leq p < 10 \end{cases}$$
Where $Q_D$ and $Q_S$ denote the demand for and supply of salt (in kg) respectively and $p$ denotes the price of salt per kg in rupees.
Find the equilibrium price of salt in this market.
Correct Answer
Option 4
Correct Answer
Q64:
15 May Shift 1
Micro > Market Equilibrium
Medium
Suppose there is a market consisting of identical firms producing the same quality of salt.
Suppose the market demand curve and the market supply curve for salt are given by:
$$Q_D = \begin{cases} 350 - p & \text{for } 0 \leq p \leq 350 \\ 0 & \text{for } p > 350 \end{cases}$$
$$Q_S = \begin{cases} 220 + p & \text{for } p \geq 10 \\ 0 & \text{for } 0 \leq p < 10 \end{cases}$$
Where $Q_D$ and $Q_S$ denote the demand for and supply of salt (in kg) respectively and $p$ denotes the price of salt per kg in rupees.
If demand for salt increases, and there is no change in the equilibrium price in the market, how does it affect the market?
Correct Answer
Option 1
Correct Answer
Q65:
15 May Shift 1
Micro > Market Equilibrium
Medium
Suppose there is a market consisting of identical firms producing the same quality of salt.
Suppose the market demand curve and the market supply curve for salt are given by:
$$Q_D = \begin{cases} 350 - p & \text{for } 0 \leq p \leq 350 \\ 0 & \text{for } p > 350 \end{cases}$$
$$Q_S = \begin{cases} 220 + p & \text{for } p \geq 10 \\ 0 & \text{for } 0 \leq p < 10 \end{cases}$$
Where $Q_D$ and $Q_S$ denote the demand for and supply of salt (in kg) respectively and $p$ denotes the price of salt per kg in rupees.
Which of the following expressions will be used for calculating excess supply of salt in the market?
Correct Answer
Option 3
Correct Answer
Q66:
15 May Shift 1
Micro > Market Equilibrium
Medium
Suppose there is a market consisting of identical firms producing the same quality of salt.
Suppose the market demand curve and the market supply curve for salt are given by:
$$Q_D = \begin{cases} 350 - p & \text{for } 0 \leq p \leq 350 \\ 0 & \text{for } p > 350 \end{cases}$$
$$Q_S = \begin{cases} 220 + p & \text{for } p \geq 10 \\ 0 & \text{for } 0 \leq p < 10 \end{cases}$$
Where $Q_D$ and $Q_S$ denote the demand for and supply of salt (in kg) respectively and $p$ denotes the price of salt per kg in rupees.
If the government imposes a price ceiling of Rs 31 on salt, what will be the volume of excess demand/ supply in the market?
Correct Answer
Option 1
Correct Answer
Q67:
14 May Shift 1
Micro > Market Equilibrium
Medium
Identify the options which reflect the impact of simultaneous shifts of demand and supply on equilibrium (A) When demand shift right and supply left, quantity may increase, decrease or remain unchanged but price decreases (B) When demand and supply shift leftward, quantity decreases but price may increase, decrease or remain unchanged (C) When demand and supply shift rightward, quantity increases but price may increase, decrease or remain unchanged (D) When demand shift left and supply right, quantity may increases, decreases or remain unchanged but price decreases
Correct Answer
Option 4
Correct Answer
Q68:
13 May Shift 2
Micro > Market Equilibrium
Medium
Arrange the following elasticity degrees along the demand curve in their ascending order. (A) Elasticity (eD) = 1 (B) Elasticity (eD) > 1 (C) Elasticity (eD) < 1 (D) Elasticity (eD) = 0 Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q69:
13 May Shift 2
Micro > Market Equilibrium
Medium
When the price of a cricket ball is Rs10, let us assume that 200 cricket balls are produced in aggregate by the firms in the market. When the price of a cricket ball rises to Rs.30, let us assume that 1,000 cricket balls are produced in aggregate by the firms in the market. Calculate the elasticity of supply.
Correct Answer
Option 1
Correct Answer
Q70:
13 May Shift 2
Micro > Market Equilibrium
Easy
Minimum support price of a foodgrain is the example of _______
Correct Answer
Option 1
Correct Answer
Q71:
13 May Shift 1
Micro > Market Equilibrium
Medium
Suppose an individual buy 30 bananas when its price is Rs. 10 per banana. When the price increases to Rs. 14 per banana, she reduces her demand to 24 bananas. In this case,what will be the price elasticity of demand?
Correct Answer
Option 3
Correct Answer
Q72:
1 June Shift 1
Micro > Market Equilibrium
Medium
Increase in demand refers to :
Correct Answer
Option 3
Correct Answer
Q73:
1 June Shift 1
Micro > Market Equilibrium
Easy
For a given demand function Y = 50 - 2P, the quantity demanded at P = Rs. 20 is :
Correct Answer
Option 2
Correct Answer