All India Management Association (AIMA) 2007 M.B.A Marketing Management Business Economics – I - Question Paper
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(b) Relatively elastic supply
(c) Unitary elastic supply
(d) Perfectly inelastic supply
(e) Relatively inelastic supply. (1 mark)
6. When a unit tax is imposed, this will reason
(a) The supply curve to shift rightward
(b) The supply curve to shift leftward
(c) The demand curve to shift rightward
(d) The demand curve to shift leftward
(e) No change in the positions of demand and supply curves. (1 mark)
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7. In which of the subsequent situation(s) is the entire tax borne by the consumer?
I. If the demand curve is perfectly inelastic, the price rises by the full amount of the tax and the
supply remains unchanged.
II. If the supply curve is perfectly inelastic, there will be no increase in the price or reduce in
supply.
III. If the demand curve is perfectly elastic, the price does not rise at all.
(a) Only (I) above
(b) Only (II) above
(c) Only (III) above
(d) Both (I) and (II) above
(e) Both (I) and (III) above. (1 mark)
8. The supply and demand functions of a commodity are estimated as
Qd = 2,000 – 450P
Qs = 800P – 3,000.
At equilibrium, the elasticity of supply for the commodity is
(a) 2
(b) 4
(c) 6
(d) 8
(e) 16. (2marks)
9. The demand function for a product is estimated as P = 40 – 4Q. If the current market price is Rs.8, what
is the price elasticity of demand?
(a) – 0.333
(b) – 0.250
(c) – 1.321
(d) 1.321
(e) 1.891. (2marks)
10.The demand and supply functions of a commodity are provided as follows:
Qs = 500P – 500
Qd = 1,150 – 50P.
The equilibrium output for the product is
(a) 750 units
(b) 1,000 units
(c) 1,250 units
(d) 1,400 units
(e) 1,500 units. (2marks)
11.The demand function for a commodity is estimated to be Qd = 12,00,000 – 40P.The theoretical highest
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