The Price Puzzle: What Drives the Market? Class 9 MCQ Online Test, Set 1 (with Solutions)

The Price Puzzle: What Drives the Market?: Practice Set 1

13 questions: MCQs, assertion–reason and a case study
Time: 15 minutes (submits by itself when time is up)
+1 for each correct answer, no negative marking
After submitting: score, correct answers and a full solution for every question

A market in which a single seller controls the whole supply of a product with no close substitutes is called a:

(a) perfect competition(b) monopoly(c) mixed market(d) barter market

Tea and coffee are examples of:

(a) complementary goods(b) substitute goods(c) public goods(d) unrelated goods

The graph shows Srivalli's demand for mangoes. As the price falls from ₹150 to ₹50 per kg, the quantity she buys rises from 1 kg to 3 kg. This shows the:

(a) law of supply(b) law of demand(c) law of diminishing returns(d) market equilibrium

In economics, demand for a product means:

(a) the desire to own it(b) the quantity people are willing and able to buy at a particular price(c) the quantity produced by firms(d) the total stock in shops

According to the law of demand, when the price of a good falls, its quantity demanded

(a) falls(b) rises(c) stays the same(d) becomes zero

A market is a place or system where

(a) buyers and sellers exchange goods and services(b) only goods are produced(c) only the government decides(d) nobody trades

According to the law of supply, when the price of a good rises, the quantity supplied:

(a) falls(b) rises(c) stays the same(d) becomes zero

Suppose the government sets a maximum sale price for an essential vaccine below the market-driven price. What is likely to happen?

(a) Surplus(b) Shortage(c) No effect(d) Fall in demand

9Assertion–Reason

Assertion (A): The demand curve slopes downward.
Reason (R): Price and quantity demanded have an inverse relationship.

(a) Both Assertion (A) and Reason (R) are true, and R is the correct explanation of A(b) Both A and R are true, but R is not the correct explanation of A(c) A is true but R is false(d) A is false but R is true

10Assertion–Reason

Assertion (A): A shortage occurs when price is below equilibrium.
Reason (R): At such a price, quantity demanded exceeds quantity supplied.

(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).(b) Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion (A).(c) Assertion (A) is true but Reason (R) is false.(d) Assertion (A) is false but Reason (R) is true.

Case study

Before Diwali, the demand for sweets and dry fruits rises sharply in a town. Shopkeepers stock more goods, and some new sellers set up stalls.

The rise in demand before Diwali is likely to

(a) push up prices(b) lower prices(c) have no effect(d) stop sales

New sellers setting up stalls will

(a) decrease supply(b) increase supply(c) reduce demand(d) stop trade

After the festival, prices of sweets are likely to

(a) rise further(b) stay at festival levels for ever(c) fall as demand drops(d) become zero