1.	______ is a type of good for which demand increases as its price rises ?
	Giffen Good
	Capital Good
	Consumer Good
	none
	Answer: Giffen Good Explanation: A Giffen good is a product that people consume more of as the price rises and vice versa — violating the basic law of demand in microeconomics. For ex Iphone as it shows the standard of living.
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2.	What kind of relationship exists between income and demand in case of normal goods ?
	There is no impact of income on demand
	Sometime there is a direct and sometimes an inverse relationship
	There is a direct relationship
	There is an inverse relationship
	Answer: There is a direct relationship Explanation: In the case of normal goods, income and demand are directly related, which means an increase in income will cause demand to rise and a decrease in income causes demand to fall.
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3.	For economists, _____ refers to the amount of a product or service that people are both willing and able to buy ?
	Demand
	Supply
	Price
	Income
	Answer: Demand Explanation: According to Economics demand refers to the willingness to purchase , ability to pay and willingness to pay. A consumer may be able to differentiate between a need and a want, but from an economist's perspective they are the same thing.
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4.	The demand for a commodity or service which is a consequence of the demand for something else is called ______ ?
	Income Demand
	Direct Demand
	Composite Demand
	Derived Demand
	Answer: Derived Demand Explanation: The demand for a commodity or service which is a consequence of the demand for something else is called derived demand. For example if the demand of the printer increases then the demand of the paper will also increase, The increase in the demand of the paper due to the increase in the demand of the printer is known as derived demand.
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5.	What is the change in total utility due to consumption of one additional unit of an item called ?
	Marginal Utility
	Maximum Utility
	Minimum Utility
	Change Utility
	Answer: Marginal Utility Explanation: Marginal Utility is the additional Satisfaction that a customer gets for an additional unit of consumption or additional unit of service.
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6.	What effect will a decrease in demand and an increase in supply have on equilibrium price ?
	Equilibrium price will fall
	Equilibrium price will rise
	Equilibrium price will be constant
	Sometimes price will rise and sometimes it will fall
	Answer: Equilibrium price will fall Explanation: An decrease in demand and an increase in supply will decrease the equilibrium price and vice versa but the effect on equilibrium quantity cannot be determined.
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7.	As per the law of demand, if all other commodities remain the same, then the relation between the demand and price of a commodity is ?
	Negative
	No Relation
	May be Positive or Negative
	Positive
	Answer: Negative Explanation: The Law of Demand states that when the price of a commodity rises, then its demand fall and vice versa keeping all other things constant. So, if the demand and price are inversely proportional to each other.
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8.	What would happen to the demand curve when there is an increase in the price of substitute products ?
	Outward shift
	Remains constant
	Initially inward and then after a period outward shift
	Inward shift
	Answer: Outward shift Explanation: From the diagram When the price of the product increases then the customer will move to its substitute product and suddenly the demand for the substitute product will rise From D to D’ which meSol that there is an outward shift in the graph.
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9.	In economic terms, what do we mean by ‘Intermediate Goods’ ?
	Goods sold between industries for resale or production of other goods.
	Goods in transit before reaching the consumers.
	Price of goods without GST.
	Fixed assets used by manufacturers.
	Answer: Goods sold between industries for resale or production of other goods. Explanation: Intermediate goods, producer goods or semi-finished products are goods, which are partly finished goods, and are used for the production of the other good which eventually makes the final product For ex. If a mobile is to be exported then it’s battery is an intermediate good.
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