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Theory of Demand and Supply Interview Questions

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As demand for an item increases, prices rise. When manufacturers respond to the price increase by producing a larger supply of that item, this increases competition and drives the price down.

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Demand for a commodity refers to:-

a)Desire for the commodity
b)Need for the commodity
c)Quantity demanded of that commodity
d)Quantity of the commodity demanded at a certain price during any particular period of time
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Expansion and contraction of demand curve occurs due to: a)Change in the price of commodity b)Change in the price of substitute c)Change in income d)None
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If demand is parallel to x axis, what will be the nature of the elasticity in that case:-

a) Perfectly Elastic
b) Perfectly Inelastic
c) Slightly Elastic
d) Slightly Inelastic
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Which of the following is not a determinant of demand? a)Consumer's tastes and preferences b)Quality supplied of a commodity c)Income of the consumers d)Price of related goods
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Contraction of demand results due to_______

a)Increase in price of goods
b)Decrease in no. of products
c)Increase in Options available
d)Salary increase
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Generally, when income of consumer increases, he goes in for superior goods, leading to a fall in demand for inferior goods. It means, income elasticity of demand is________ a)Less than 1 b)Unitary c)Zero d)Negative
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A 10% Increase in the price of tea results is an 8% increase in the demand of coffee. Cross elasticity of demand will be: a)0.80 b)1.25 c)1.50 d)1.80
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Which statement is true about the law of demand: a)Income rises, demand rises b)Price rises, demand rises c)Price falls, demand falls d)Price falls, demand rises
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If the price elasticity of demand is zero, the shape of the curve will be: a)Horizontal b)Vertical c)Sloping downwards d)None of these d)
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If income of a person increases by 10% and his demand for goods increases by 30%, income elasticity will be_______ a)Equal to one b)Less than one c)More than one d)None of these
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In which of the following cases the demand for goods tends to be less elastic? a)Good is necessary b)Time period is shorter c)Number of close substitutes is less d)All of the above
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Bricks for houses is an example of which kind of demand? a)Composite b)Competitive c)Joint d)Derived
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If the price of any complement goods rises:

a)Demand curve shifts to left
b)Demand curve shifts to right
c)Demand curve moves downwards
d)Demand curve moves upward
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In case of an inferior good, the income elasticity of demand is: a)Positive b)Zero c)Negative d)Infinite
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The demand for factors production is________ a)Fundamental demand b)derived demand c)Market demand d)Joint demand
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Compute income elasticity if demand increases by 5% and income by 1%
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The commoditywhose demand is associated with the name of Sir Robert Giffen? a)Necessary good b)Luxury good c)Inferior good d)Ordinary good
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The price of hot dogs increased by 22% and the quantity demanded falls by 25% this indicates that demand for hot dogs is:
c)Unitary elastic
d)Perfectly elastic
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What is income elasticity of demand, when income changes by 20% and demand changes by 40%
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Movement along the same demand curve shows: a)Expansion of demand b)Expansion of supply c)Expansion and contraction of demand d)Increase and decrease of demand
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Latest 20 Questions
Payment of time- barred debt is: (a) Valid (b) Void (c) Illegal (d) Voidable
Consideration is defined in the Indian Contract Act,1872 in: (a) Section 2(f) (b) Section 2(e) (c) Section 2(g) (d) Section 2(d)
Which of the following is not an exception to the rule, "No consideration, No contract": (a) Natural love and affection (b) Compensation for involuntary services (c) Completed gift (d) Agency
Consideration must move at the desire of: (a) The promisor (b) The promisee (c) The promisor or any other party (d) Both the promisor and the promisee
An offer which is open for acceptance over a period of time is: (a) Cross Offer (b) Counter Offer (c) Standing Offer (d) Implied Offer
Specific offer can be communicated to__________ (a) All the parties of contract (b) General public in universe (c) Specific person (d) None of the above
_________ amounts to rejection of the original offer. (a) Cross offer (b) Special offer (c) Standing offer (d) Counter offer
A advertises to sell his old car by advertising in a newspaper. This offer is caleed: (a) General Offer (b) Special Offer (c) Continuing Offer (d) None of the above
In case a counter offer is made, the original offer stands: (a) Rejected (b) Accepted automatically (c) Accepted subject to certain modifications and variations (d) None of the above
In case of unenforceable contract having some technical defect, parties (a) Can sue upon it (b) Cannot sue upon it (c) Should consider it to be illegal (d) None of the above
If entire specified goods is perished before entering into contract of sale, the contract is (a) Valid (b) Void (c) Voidable (d) Cancelled
______________ contracts are also caled contracts with executed consideration. (a) Unilateral (b) Completed (c) Bilateral (d) Executory
A offers B to supply books @ Rs 100 each but B accepts the same with condition of 10% discount. This is a case of (a) Counter Offer (b) Cross Offer (c) Specific Offer (d) General Offer
_____________ is a game of chance. (a) Conditional Contract (b) Contingent Contract (c) Wagering Contract (d) Quasi Contract
There is no binding contract in case of _______ as one's offer cannot be constructed as acceptance (a) Cross Offer (b) Standing Offer (c) Counter Offer (d) Special Offer
An offer is made with an intention to have negotiation from other party. This type of offer is: (a) Invitation to offer (b) Valid offer (c) Voidable (d) None of the above
When an offer is made to the world at large, it is ____________ offer. (a) Counter (b) Special (c) General (d) None of the above
Implied contract even if not in writing or express words is perfectly _______________ if all the conditions are satisfied:- (a) Void (b) Voidable (c) Valid (d) Illegal
A specific offer can be accepted by ___________. (a) Any person (b) Any friend to offeror (c) The person to whom it is made (d) Any friend of offeree
An agreement toput a fire on a person's car is a ______: (a) Legal (b) Voidable (c) Valid (d) Illegal
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