491. Demand is elastic when:
A) Price level is high
B) More substitutes are available
C) Income of the consumer is less
D) All of the above
492. Coefficient of elasticity of demand is negative. It means:
A) Consumers sometimes buy negative units of a commodity
B) Price and quantity demanded move in the same direction
C) Law of demand holds
D) The two goods are complementary to each other
493. When there is a fall in the price of a complementary good and a rise in the price of a substitute good, it shows:
A) Decrease in demand
B) Increase in demand
C) Contraction in demand
D) Expansion in demand
494. When the same units are demanded at a higher price, it shows:
A) Decrease in demand
B) Increase in demand
C) Expansion in demand
D) Contraction in demand
495. Contraction of demand is shown by:
A) Upward movement on the demand curve
B) Downward movement on the demand curve
C) Rightward shift of the demand curve
D) Leftward shift of the demand curve
496. An economy is in equilibrium when:
A) Planned consumption exceeds planned saving
B) Planned consumption exceeds planned investment
C) Intended investment equals intended saving
D) Intended investment exceeds intended saving
497. Which measures taken by the government would be intended to raise the price of imports?
A) Foreign exchange control
B) Increase in the rate of interest
C) Quotas
D) Tariff
498. Which can the government do to increase demand in its economy?
A) Budget for a surplus
B) Cut taxes
C) Encourage saving
D) Reduce its expenditure
499. What is more likely to be found in a free-market economy than in a planned economy?
A) An even distribution of income
B) An incentive to income
C) A wide range of public goods
D) Full employment of labor
500. Which of the following is not a direct tax?
A) Estate tax
B) Sales tax
C) Tax on wealth
D) Tax on entertainment
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