Which of the following is a type of elasticity of demand? MCQ with Answer and Explanation

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Which of the following is a type of elasticity of demand?

A. Price elasticity, income elasticity and cross elasticity

B. Only production elasticity

C. Only supply elasticity

D. Only cost elasticity

Answer: Option A

Solution (By JKSSB Mock Tests)

The main types of demand elasticity are price elasticity of demand, income elasticity of demand and cross elasticity of demand.

This question belongs to: Economy GK Economy Set 1

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Question #1

The concept of 'Deadweight Loss' arises due to:

A. Market distortions such as taxes, subsidies or monopolies

B. Perfect competition

C. Efficient resource allocation

D. Free trade

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Correct Answer: Option A

Explanation:
Deadweight loss is the loss of economic efficiency that occurs when the equilibrium quantity is not achieved due to market imperfections or government interventions.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is a primary function of money?

A. Standard of deferred payments

B. Unit of account

C. Store of value

D. Medium of exchange

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Correct Answer: Option D

Explanation:
The primary function of money is to act as a medium of exchange.

This question belongs to: Economy GK Economy Set 1

Question #3

In the context of public finance, the concept of 'Ricardian Equivalence' suggests that:

A. Government borrowing is always expansionary

B. Deficit financing always increases private consumption

C. Tax-financed and debt-financed government spending have the same effect on the economy

D. Public debt has no intergenerational implications

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Correct Answer: Option C

Explanation:
Ricardian Equivalence, proposed by David Ricardo and revived by Robert Barro, argues that rational agents anticipate future taxes to repay debt, so government borrowing does not stimulate demand.

This question belongs to: Economy GK Economy Set 1

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