Price Determination and Simple Application Class 11 MCQ Questions Economics are covered in this Article. Price Determination and Simple Application Class 11 MCQ Test contains 50 questions. Answers to MCQs on Price Determination and Simple Application Class 11 Economics are available after clicking on the answer. Thess MCQs have been made for Class 11 students to help check the concept you have learned from detailed classroom sessions and the application of your knowledge.
| Subject | Economics (MCQ) |
| Topic | Price Determination and Simple Application Class 11 MCQ Questions |
| Category | Economics Class 11 MCQs |
Price Determination and Simple Application Class 11 MCQ Questions
1.________ is determined when the quantity demanded of a commodity becomes equal to the quantity supplied.
(a) Market supply
(b) Market demand
(c) Market equilibrium
(d) None of the above
Answer
Answer: (c) Market equilibrium
2. The price determined corresponding to market equilibrium is known as ______.
(a) Market supply
(b) Market price
(c) Market demand
(d) Market equilibrium
Answer
Answer: (b) Market price
3. The quantity sold at equilibrium level is known as
(a) Equilibrium quantity
(b) Maximum quantity
(c) Quantity supplied
(d) All of the above
Answer
Answer: (a) Equilibrium quantity
4. Excess supply results in ______.
(a) Surplus
(b) Competition among sellers
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (c) Both (a)&(b)
5. Excess demand results in_______.
(a) Surplus
(b) Competition among seller
(c) Both (a)&(b)
(d) Competition among buyers
Answer
Answer: (d) Competition among buyers
6. Firm is a ______ under Perfect competition.
(a) Price maker
(b) Price taker
(c) Price influencer
(d) Price controller
Answer
Answer: (b) Price taker
7. Industry under perfect competition is ______.
(a) Price maker
(b) Price taker
(c) Price influencer
(d) Price controller
Answer
Answer: (a) Price maker
8. Each firm under market equilibrium earns_______.
(a) Supernatural profit
(b) Negative profit
(c) Normal profit
(d) None of the above
Answer
Answer: (c) Normal profit
9. ________ is when decisions of consumers and producers in the market are coordinated through the free flow of prices.
(a) Price elasticity
(b) Price making
(c) Price taking
(d) Price mechanism
Answer
Answer: (d) Price mechanism
10. ______ operates under market equilibrium.
(a) Law of demand
(b) Law of supply
(c) Both (a) and (b)
(d) None of the above
Answer
Answer: (c) Both (a) and (b)
Price Determination and Simple Application Class 11 MCQ Questions
11. A situation where the quantity demanded is more than the quantity supplied at the prevail marker price is known as;
(a) Excess equilibrium
(b) Excess demand
(c) Excess supply
(d) Shortage
Answer
Answer: (b) Excess demand
12. In excess demand, buyers are ready to Pay higher prices to;
(a) Sell the excess stock
(b) Meet their demands
(c) Both (a) and (b)
(d) None of the above
Answer
Answer: (b) Meet their demands
13. Situation, when the quantity supplied, is more than the quantity demanded at the prevailing market price.
(a) Excess equilibrium
(b) Excess demand
(c) Excess supply
(d) Shortage
Answer
Answer: (c) Excess supply
14. An industry for which supply curve and demand curve intersect each other in positive axes is known as;
(a) Equilibrium industry
(b) Viable industry
(c) Non-Viable industry
(d) All of the above
Answer
Answer: (b) Viable industry
15. An industry for which the supply curve and demand curve never intersect each other in positive axes is known as;
(a) Equilibrium industry
(b) Viable industry
(c) Non-Viable industry
(d) All of the above
Answer
Answer: (c) Non-Viable industry
16. A demand curves shifts due to;
(a) Change in price of complementary goods
(b) Change in taste and preferences
(c) Change in population
(d) All of the above
Answer
Answer: (d) All of the above
17. Supply curve shifts due to;
(a) Change in the number of firms
(b) Change in taxation policy
(c) Change in the goals of the firm
(d) All of the above
Answer
Answer: (d) All of the above
18. An increase in demand leads to;
(a) Rightward shift
(b) Leftward shift
(c) Upward movement
(d) Downward movement
Answer
Answer: (a) Rightward shift
19. A decrease in demand leads to;
(a) Rightward shift
(b) Leftward shift
(c) Upward movement
(d) Downward movement
Answer
Answer: (b) Leftward shift
20. Increase in supply leads to;
(a) Rightward shift
(b) Leftward shift
(c) Upward movement
(d) Downward movement
Answer
Answer: (a) Rightward shift
Price Determination and Simple Application Class 11 MCQ Questions
21. Read the following statement given below and choose the correct alternative
Statement 1- When Decrease in demand is equal to a decrease in supply, then a leftward shift in the demand curve is equal to a leftward shift in the supply curve.
Statement 2- When Decrease in demand is more than the decrease in supply, then the rightward shift in the supply curve will be more than the Demand curve.
(a) Both are correct
(b) Both are incorrect
(c) Statement 1 is correct and statement 2 is incorrect
(d) Statement 1 is incorrect and statement 2 is correct
Answer
Answer: (c) Statement 1 is correct and statement 2 is incorrect
22. Read the following statement given below and choose the correct alternative
Statement 1- When Decrease in demand is more than the increase in supply, then a rightward shift in the demand curve is more than a rightward shift in the supply curve.
Statement 2- When an increase in demand is less than the increase in supply, then a rightward shift in the demand curve is less than a rightward shift in the supply curve.
(a) Both are correct
(b) Both are incorrect
(c) Statement 1 is correct and statement 2 is correct
(d) Statement 1 is incorrect and statement 2 is correct
Answer
Answer: (a) Both are correct
23. Read the following statement given below and choose the correct alternative
Statement 1- When Decrease in demand is equal to an increase in supply, then a leftward shift in the demand curve is equal to a leftward shift in the supply curve.
Statement 2- When Decrease in demand is equal to an increase in supply, then a rightward shift in the demand curve is equal to a rightward shift in the supply curve
(a) Both are correct
(b) Both are incorrect
(c) Statement 1 is correct and statement 2 is incorrect
(d) Statement 1 is incorrect and statement 2 is correct
Answer
Answer: (b) Both are incorrect
24. Read the following statement given below and choose the correct alternative
Statement 1- When Decrease in demand is less than the increase in supply, then a leftward shift in the demand curve is less than a rightward shift in the supply curve
Statement 2- When an increase in Demand is more than the decrease in supply, then the rightward shift in the demand curve is more than the leftward shift in the supply curve.
(a) Both are correct
(b) Both are incorrect
(c) Statement 1 is correct and statement 2 is incorrect
(d) Statement 1 is incorrect and statement 2 is correct
Answer
Answer: (a) Both are correct
25. Read the following statement given below and choose the correct alternative
Statement 1- When supply is perfectly elastic, it will be a horizontal straight line parallel to X-axis
Statement 2- When Supply is perfectly elastic, the change in demand will also be perfectly elastic.
(a) Both are correct
(b) Both are incorrect
(c) Statement 1 is correct and statement 2 is incorrect
(d) Statement 1 is incorrect and statement 2 is correct
Answer
Answer: (c) Statement 1 is correct and statement 2 is incorrect
26. Read the following statement given below and choose the correct alternative
Statement 1- When supply decreases, the supply curve shifts to the right and the demand curve shifts to the left.
Statement 2- When the demand curve is perfectly elastic, it will be a horizontal straight line parallel to the x-axis.
(a) Both are correct
(b) Both are incorrect
(c) Statement 1 is correct and statement 2 is incorrect
(d) Statement 1 is incorrect and statement 2 is correct
Answer
Answer: (d) Statement 1 is incorrect and statement 2 is correct
27. Read the following statement given below and choose the correct alternative
Statement 1- When the demand curve is perfectly elastic and supply Decreases, the supply curve will shift to the left.
Statement 2- When the demand curve is perfectly elastic the price remains the same.
(a) Both are correct
(b) Both are incorrect
(c) Statement 1 is correct and statement 2 is incorrect
(d) Statement 1 is incorrect and statement 2 is correct
Answer
Answer: (a) Both are correct
28. Read the following statement given below and choose the correct alternative
Statement 1- When the supply curve is perfectly inelastic, it will be a vertical straight line parallel to the y-axis.
Statement 2- Supply is perfectly inelastic, then demand will be perfectly elastic
(a) Both are correct
(b) Both are incorrect
(c) Statement 1 is correct and statement 2 is incorrect
(d) Statement 1 is incorrect and statement 2 is correct
Answer
Answer: (c) Statement 1 is correct and statement 2 is incorrect
29. Read the following statement given below and choose the correct alternative
Statement 1- Government doesn’t intervene in the process of price determination.
Statement 2- Too low price of a commodity leads to more profits.
(a) Both are correct
(b) Both are incorrect
(c) Statement 1 is correct and statement 2 is incorrect
(d) Statement 1 is incorrect and statement 2 is correct
Answer
Answer: (d) Statement 1 is incorrect and statement 2 is correct
30. Read the following statement given below and choose the correct alternative
Statement 1- Foreign government plays an important role in determining the price of our country.
Statement 2- The price of non-essential commodities is determined by the government
(a) Both are correct
(b) Both are incorrect
(c) Statement 1 is correct and statement 2 is incorrect
(d) Statement 1 is incorrect and statement 2 is correct
Answer
Answer: (b) Both are incorrect
Price Determination and Simple Application Class 11 MCQ Questions
31. Read the following statement given below and choose the correct
Assertion (A)- Price ceiling refers to the maximum price of a commodity at a level lower than the equilibrium price.
Reason ( R )- price ceiling is also known as a maximum price ceiling.
(a) Both assertion and reason are true. The reason is the correct explanation of the assertion
(b) Both assertion and reason are true. The reason is not the correct explanation of the assertion
(c) The assertion is true but the reason is not.
(d) The reason is true but the assertion is true.
Answer
Answer: (b) Both assertion and reason are true. The reason is not the correct explanation of the assertion
32. Read the following statement given below and choose the correct alternative
Assertion (A)- The price ceiling is always fixed below the equilibrium price.
Reason (R )- The price ceiling is always fixed above the equilibrium price.
(a) Both assertion and reason are true. The reason is the correct explanation of assertion.
(b) Both assertion and reason are true. The reason is not the correct explanation of the assertion
(c) The assertion is true but the reason is not.
(d) The reason is true but the reason is not
Answer
Answer: (c) The assertion is true but the reason is not.
33. Read the following statement given below and choose the correct alternative
Assertion (A)- The equilibrium price can get too high which leads to low profitability of the seller
Reason (R )- The equilibrium price gets too high and poor people are not able to purchase items at that price.
(a) Both assertion and reason are true. The reason is the correct explanation of assertion.
(b)Both assertion and reason are true. The reason is not the correct explanation of assertion.
(c) The assertion is true but the reason is not
(d) The reason is true but the assertion is not
Answer
Answer: (d) The reason is true but the assertion is not
34. Read the following statement given below and choose the correct alternative
Assertion (A)- Price ceiling leads to black Marketing.
Reason (R )- The price ceiling leads to a shortage.
(a) Both assertion and reason are true. The reason is the correct explanation of the assertion
(b) Both assertion and reason are true. The reason is not the correct explanation of the assertion
(c) The assertion is true but the reason is not
(d) The reason is true but the assertion is not
Answer
Answer: (a) Both assertion and reason are true. The reason is the correct explanation of the assertion
35. Read the following statement given below and choose the correct alternative
Assertion (A)- The black market is any market in which the commodities are sold at a higher price than the maximum price fixed by the government.
Reason ( R )- The black market is a consequence of the price floor.
(a) Both assertion and reason are true. The reason is the correct explanation of the assertion
(b) Both assertion and reason are true. The reason is not the correct explanation of the assertion
(c) The assertion is true but the reason is not
(d) The reason is true but the assertion is not
Answer
Answer: (c) The assertion is true but the reason is not
36. Read the following statement given below and choose the correct alternative
Assertion (A)- Black market arises due to sellers, who are willing to sell at high prices.
Reason ( R )- Consumers face difficulty in obtaining goods from ration shops.
(a) Both assertion and reason are true. The reason is the correct explanation of the assertion
(b) Both assertion and reason are true. The reason is not the correct explanation of the assertion
(c) The assertion is true but the reason is not
(d) The reason is true but the assertion is not
Answer
Answer: (d) The reason is true but the assertion is not
37. Read the following statement given below and choose the correct alternative
Assertion (A)- Government enforces Rationing system.
Reason ( R)- Government needs to meet the situation of excess demand.
(a) Both assertion and reason are true. The reason is the correct explanation of the assertion
(b) Both assertion and reason are true. The reason is not the correct explanation of the assertion
(c) The assertion is true but the reason is not
(d) The reason is true but the assertion is not
Answer
Answer: (a) Both assertion and reason are true. The reason is the correct explanation of the assertion
38. Read the following statement given below and choose the correct alternative
Assertion (A)- Rationing is a technique adopted by the government to sell a minimum quota of essential commodities at a price less than the equilibrium price to supply goods to the poor community at a cheaper rate
Reason ( R )- Commodities available in the ration shops are often of inferior quality.
(a) Both Assertion and Reason are true. The reason is the correct explanation of the assertion
(b) Both assertion and reason are true. The reason is not the correct explanation of the assertion
(c) The assertion is true but the reason is not.
(d) The reason is true but the assertion is not
Answer
Answer: (b) Both assertion and reason are true. The reason is not the correct explanation of the assertion
39. Read the following statement given below and choose the correct alternative
Assertion (A)- Price floor refers to the minimum price, fixed by the government.
Reason ( R )- The price floor is fixed for the poor community.
(a) Both assertion and reason are true. The reason is the correct explanation of the assertion
(b) Both assertion and reason are true. The reason is not the correct explanation of the assertion
(c) The assertion is true but the reason is not
(d) The reason is true but the assertion is not
Answer
Answer: (c) The assertion is true but the reason is not
40. Read the following statement given below and choose the correct alternative
Assertion (A)- the price floor is fixed below the equilibrium price.
Reason ( R)- Price floor leads to excess supply.
(a) Both assertion and reason are true. The reason is the correct explanation of the assertion
(b) Both assertion and reason are true. The reason is not the correct explanation of the assertion
(c) The assertion is true but the reason is not
(d) The reason is true but the assertion is not
Answer
Answer: (d) The reason is true but the assertion is not
Price Determination and Simple Application Class 11 MCQ Questions
41. Choose the correctly matched pair from the following
| Column A | Column B |
| A. Buffer stock | 1. Demand |
| B. Rationing | 2. Price ceiling |
| C. The behavior of firms in the market | 3. Price floor |
| D. The behavior of consumers in the market | 4. Supply |
(a) A-1
(b) B-2
(c) C-3
(d) D-4
Answer
Answer: (b) B-2
42. Choose the correctly matched pair from the following
| Column A | Column B |
| A. Equilibrium price remains the same | 1. Decrease in Demand when supply remains the same |
| B. Equilibrium price and quantity rise | 2. Increase in supply when demand remains the same |
| C. Equilibrium price and quantity fall | 3. Decrease in demand=Decrease in supply |
| D. Equilibrium price falls and equilibrium quantity rises | 4. Increase in demand when supply remains the same |
(a) A-3
(b) B-2
(c) C-4
(d) D-1
Answer
Answer: (a) A-3
43. Choose the correctly matched pair from the following
| Column A | Column B |
| A. Price ceiling | 1. Price floor |
| B. Change in supply | 2. Black market |
| C. MSP | 3. Increase in supply |
| D. Decrease in demand | 4. Rightward shift |
(a) A-3
(b) B-4
(c) C-1
(d) D-2
Answer
Answer: (c) C-1
44. “Government fixes support price for crops”, because;
(a) To support farmers
(b) To increase the income of sellers
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (a) To support farmers
45. “Excess supply leads to falling in market price”, because:
(a) In this situation, the market price is more than the equilibrium price
(b) To sell the excess stock
(c) Both (a) and (b)
(d) None of the above
Answer
Answer: (b) To sell the excess stock
Price Determination and Simple Application Class 11 MCQ Questions
Read the following text given below and answer the questions that follow:
Market equilibrium refers to the point that arises under a given supply and demand condition and has a tendency to remain at that level; where demand = supply.
If we deviate from our position due to a disturbance, economic forces will act to return them to their original position; Demand = supply that can go back. In short, it is the resting position.
A viable industry refers to an industry in which the supply curve and the demand curve intersect on positive axes.
The nonviable industry refers to an industry where the supply curve and the demand curve never intersect on the positive axes. In India, commercial aircraft is an example of an unviable industry. That means aeroplanes cannot be produced at all. Bear in mind that an industry that is not viable in one country may be viable in another. For example, commercial aircraft are used in countries like the US, UK, France, etc.
46. Equilibrium is situated where;
(a) Demand=Supply
(b) Demand>Supply
(c) Supply>Demand
(d) Demand<Supply
Answer
Answer: (a) Demand=Supply
47. Equilibrium is the position of ____.
(a) Rest
(b) Production
(c) Supply
(d) None of the above
Answer
Answer: (a) Rest
48. In a viable industry refers to an industry in which the supply curve and the demand curve intersect on ______.
(a) Origin
(b) Negative axis
(c) Positive axis
(d) None of the above
Answer
Answer: (c) Positive axis
49. Which of the following are examples of a viable industry
(a) Commercial aircraft
(b) Wheat
(c) Crops
(d) None of the above
Answer
Answer: (a) Commercial aircraft
50. Commercial aircraft is an example of an unviable industry.
(a) India
(b) France
(c) US
(d) All of the above
Answer
Answer: (b) France
Term 2 – NCERT Economics Class 11 MCQ
Part A – MCQ Questions for Class 11 Statistics Economics
- Statistical Tools and Interpretation – Measures of Dispersion, Correlation, Index Number
Part B – MCQ Questions for Class 11 Microeconomics
- Producer Behaviour and Supply
- Forms of Market and Price Determination under perfect competition with simple applications
- Forms of Market Class 11 MCQ
- Price Determination and Simple Application Class 11 MCQ Questions