Economy

Correct answer: C

I is incorrect: An effective maximum price below equilibrium → Binding price ceiling. It can create excess demand in a simple competitive model. II is correct: Additional satisfaction from one more unit → Marginal utility. Marginal concepts refer to an incremental change.

Correct answer: D

Demand for an inferior good falls as income rises.

Correct answer: A

I is correct: An effective maximum price below equilibrium → Binding price ceiling. It can create excess demand in a simple competitive model. II is correct: Tea and coffee used in place of one another → Substitute goods. A rise in one price can raise demand for the other.

Correct answer: B

There is no excess demand or supply at that price.

Correct answer: C

I is correct: Higher income reducing demand for an inferior good → Leftward demand shift. Demand for an inferior good falls as income rises. II is correct: Quantity supplied exceeding quantity demanded → Market surplus. At that price sellers want to sell more than buyers purchase.

Correct answer: A

The absolute price elasticity is below one.

Correct answer: B

I is incorrect: Demand responding weakly to a percentage price change → Inelastic demand. The absolute price elasticity is below one. II is correct: Cars and fuel used together → Complementary goods. A rise in one price can reduce demand for the other.

Correct answer: C

I is incorrect: Higher income reducing demand for an inferior good → Leftward demand shift. Demand for an inferior good falls as income rises. II is correct: Demand responding strongly to a percentage price change → Elastic demand. The absolute price elasticity exceeds one.

Correct answer: C

It can create excess supply in a simple competitive model.

Correct answer: A

I is incorrect: Demand responding strongly to a percentage price change → Elastic demand. The absolute price elasticity exceeds one. II is correct: Quantity demanded exceeding quantity supplied → Market shortage. At that price buyers want more than sellers offer.

Correct answer: D

At each given price consumers demand more.

Correct answer: C

I is incorrect: Demand responding weakly to a percentage price change → Inelastic demand. The absolute price elasticity is below one. II is correct: An effective maximum price below equilibrium → Binding price ceiling. It can create excess demand in a simple competitive model.

Correct answer: D

Prices rise more slowly but do not necessarily fall.

Correct answer: A

It directly uses natural resources.

Correct answer: D

Such taxes are commonly passed through transaction prices.

Correct answer: A

Primary deficit equals fiscal deficit minus interest payments.

Correct answer: C

Some workers can be removed without reducing output.

Correct answer: B

Each firm's decisions can affect the others.

Correct answer: D

Real GDP is used to compare production volumes over time.

Correct answer: B

It provides services rather than primary extraction or manufacturing.

Correct answer: D

A budget presents fiscal plans for a financial year.

Correct answer: A

The RBI performs monetary and central-banking functions.

Correct answer: D

Income tax is a standard example of a direct tax.

Correct answer: A

Job search and matching take time.

Correct answer: B

GDP measures domestic production over a period.