Civil Service College | Fundamentals of Economics

IER + GPP | Class Test-1 | 27.12.2014 | Time: 1 hour | Total Marks: 100
Q-A: Write notes on any four the followings (4X5 = 20).
a)
b)
c)
d)
e)

Demand vs. Supply

Arch method of calculating elasticity
Price elasticity of demand
Shift vs. movement of demand curve
Opportunity cost

Q-B: Choose the correct answer.

1. Which of the following is not true?
a. Scarce resources can be
abundant over time.
b. Optimum use of scarce resources
are important in economics.
c. Abundant resources can be
scarce over time.
d. For optimum use of scarce
resources, having rational mind
is not important.
2. Households area. Consumers
b. Supplier of factors of production
c. Both
3. Positive view deals witha. Ethics and morality
b. Facts and reality
c. Both
4. Which of the following is true?
a. A market is a place where buyers
and sellers meet with potential
to trade.
b. A market can be a virtual place.
c. Both.
5. Inputs for production are available at
thea. Factor market
b. Product market
c. Wholesalers

6. Suppose your office has requested you

to conduct a study on the readymade
garments industry of Bangladesh. It will
be aa. Microeconomic study
b. Macroeconomic study
7. Suppose, you are looking at a graph in
which a line is shown sloping upward
from left to right quantity on the X-axis
and price on the Y-axis. No other
information is available. What kind of
graph you are looking ata. Demand curve
b. Supply curve
c. Can be both.
8. For supply, price and quantity are
relateda. Positively
b. Inversely
9. Which of the following is not truea. Demand will shift if price of
substitute good changes
b. Demand will shift if price of that
good reduces
c. Demand will shift if taste of the
consumer changes
d. All of the above.

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10. If a cyclone hits and as a result a large

amount crops are destroyed, thena. Supply curve will shift to the left
b. Supply curve will shift to the
right
11. If population increases, then there will
be aa. Movement along the demand
curve
b. Shift of the demand curve.
12. If people expect that price of orange will
rise in future, it might result into aa. Movement along the demand
curve for orange
b. Shift of the demand curve for
orange.
c. We shall go to Bhutan.
13. Suppose, your car runs both on gas and
octane. If your income rises and you
decide that to protect the engine of the
car you will use only octane, then which
of the following statement is true?
a. Octane is a Giffen good
b. Gas is an inferior good
14. Elasticity indicatesa. Responsiveness of price when
quantity changes
b. Responsiveness of quantity when
price changes
c. Can be both.
15. In economics, there area. Two types of elasticity
measurement
b. Three types of elasticity
measurement
c. Four types of elasticity
measurement
16. Suppose after calculating, you have
found the value of elasticity of demand
as ( 0.9). We can say thata. Demand is elastic
b. Demand is inelastic
c. Demand is unit elastic

17. If the sign of the value of price elasticity

of demand is positive, we can say thata. It is calculated for an inferior
good
b. It is calculated for a Giffen good
c. It can never happen.
18. For infinitely elastic demand, the
demand curve isa. Vertical
b. Horizontal
c. Slopes downward
19. Which of the following is not always
truea. If demand is elastic, then
increasing price will decrease
revenue
b. If demand is elastic, decreasing
price will increase revenue
c. If demand is inelastic, then
increasing price will increase
revenue
20. If calculated value of cross elasticity of
demand is negative, then we can say
that the value has been calculated with
respect toa. Substitute good
b. Complementary good

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