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Q31 - If leisure is a normal good, as the price of leisure increases the quantity...

Q31 - If leisure is a normal good, as the price of leisure increases the quantity of leisure demanded ________ and the demand for leisure ________.

1. Falls; increases

2. Falls; is not affected.

3. Remains the same;decreases

4. Increases;is not affected.

Q33 - Consumers do not have a strong preference for the output of one seller over that of another in a perfectly competitive market because

1. There a large number of firms in the market.

2. The firms sell a standardized product

3. There are no barriers to entry.

4. An individual firm has control over price.

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Answer #1

Q31. Correct Option: 2. Falls, is not affected.

Reason: It is because as per law of demand, the rise in price causes fall in quantity demanded and vice versa. The change in price therefore, causes movement along the demand curve not the shift in the demand curve.

Q. 32 Correct Option: 20 The firms sell a standardized product.

Reason: It is because all firms sell homogenous product having same characteristics, therefore, the consumer do not have any specific preference towards any particular firm.

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