ICSE Class 12 Economics by Pavan | Practice Test to Test Your Knowledge
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ICSE Class 12 Economics

ICSE Class 12 Economics

Detailed mock test covering Microeconomics, Macroeconomics, and Indian Economy. Includes numerical problems, graph-based questions, and theoretical concepts.

2025-07-20
Pavan Pavan
ICSE Class 12 Economics Grade 12

Duration

30 min

Questions

30

Marking

Negative

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Questions Preview

What does the Law of Demand state?

A
When the price of a good rises, the quantity demanded increases
B
When the price of a good falls, the quantity demanded decreases
C
When the price of a good falls, the quantity demanded increases
D
Price does not affect the demand for a good

Which of the following factors does NOT affect demand?

A
Price of the good
B
Income of the consumer
C
Price of related goods
D
Government regulations

What is the demand function?

A
A relationship between the price of a good and its quantity demanded
B
The total amount of money a consumer spends on goods
C
A function that shows the total supply of goods
D
A relationship between consumer's preferences and income

What is the key difference between a movement along the demand curve and a shift of the demand curve?

A
Movement is caused by a change in price, while shift is caused by non-price factors
B
Movement is caused by income changes, while shift is due to price changes
C
Movement refers to changes in income and shift refers to changes in price
D
There is no difference between movement and shift of the demand curve

Which of the following is an exception to the Law of Demand?

A
Veblen goods
B
Substitute goods
C
Complementary goods
D
Luxury goods

What does the Law of Diminishing Marginal Utility state?

A
As more units of a good are consumed, the additional satisfaction from each additional unit decreases
B
Utility increases with the consumption of every additional unit
C
The first unit of consumption always provides maximum satisfaction
D
Utility is independent of consumption

What is consumer equilibrium in the context of the Cardinal Utility approach?

A
When the consumer allocates their income such that the marginal utility of the last unit spent on each good is equal
B
When the consumer spends all their income on one good
C
When utility from all goods is maximized
D
When total utility is zero

What does an indifference curve represent?

A
A curve that shows all combinations of two goods that give the consumer equal satisfaction
B
A curve that shows the maximum utility a consumer can achieve
C
A straight line representing a consumer’s budget constraint
D
A curve showing the diminishing marginal utility of a good

Which of the following best describes the concept of elasticity of demand?

A
The responsiveness of the quantity demanded of a good to a change in its price
B
The measure of the total amount of goods produced in an economy
C
The relationship between income and demand for goods
D
The proportion of income spent on a good

Which of the following factors does NOT affect the elasticity of demand?

A
Availability of substitutes
B
Consumer income
C
Price of the good itself
D
Brand loyalty

How is elasticity of demand measured?

A
Percentage change in quantity demanded divided by percentage change in price
B
Total revenue divided by total supply
C
Price divided by total income
D
Change in quantity demanded divided by change in income

Which of the following best describes a good with elastic demand?

A
A small change in price leads to a large change in quantity demanded
B
A change in price has no effect on the quantity demanded
C
A large change in price leads to no change in quantity demanded
D
Demand is unaffected by income changes

Which of the following is a characteristic of a good with inelastic demand?

A
The quantity demanded does not change significantly with price changes
B
The good has many substitutes
C
The demand curve is very steep
D
The demand is highly responsive to price changes

What is the Law of Supply?

A
As price increases, the quantity supplied increases
B
As price decreases, the quantity supplied increases
C
The quantity supplied is not affected by price
D
Supply is independent of price

What is the difference between stock and supply?

A
Stock refers to the total quantity of a good available at any point of time, while supply refers to the quantity available at a specific price
B
Stock refers to goods that are sold, while supply refers to goods that are not available in the market
C
Supply refers to the quantity available at a particular time, while stock refers to the total supply over a period
D
Stock is unrelated to supply

Which of the following is a determinant of supply?

A
Price of the good
B
Income of consumers
C
Tastes and preferences
D
Expectations of future prices

Which of the following best describes a shift in the supply curve?

A
A change in supply due to non-price factors
B
A change in price resulting in a different quantity supplied
C
A change in the quantity supplied without any change in price
D
No change in the supply of goods

What does the elasticity of supply measure?

A
The responsiveness of quantity supplied to a change in price
B
The total quantity of goods available in the market
C
The relationship between supply and demand
D
The total number of suppliers in the market

Which of the following is a characteristic of a good with elastic supply?

A
The quantity supplied changes significantly with a change in price
B
The supply curve is steep and vertical
C
The supply is highly unresponsive to price changes
D
Supply does not change with price

What happens when there is a shift in the supply curve to the left?

A
Supply decreases at every price level
B
Supply increases at every price level
C
There is no change in supply
D
Supply becomes perfectly elastic

Which of the following is true about the Law of Supply?

A
The quantity supplied increases as the price increases
B
Supply decreases when the price increases
C
The quantity supplied is not affected by price
D
There is no relationship between supply and price

Which of the following is NOT a factor affecting supply?

A
Technology
B
Number of sellers
C
Income levels
D
Expectations of future prices

What is the relationship between supply and price?

A
Positive relationship; as price increases, supply increases
B
Negative relationship; as price increases, supply decreases
C
No relationship
D
Supply remains constant regardless of price

What does an increase in the supply of a good typically result in?

A
A decrease in price
B
An increase in price
C
No change in price
D
A decrease in demand

Which of the following factors causes the supply curve to shift?

A
Changes in input prices
B
Changes in demand
C
Changes in consumer preferences
D
Changes in government taxation

How is the elasticity of supply measured?

A
Percentage change in quantity supplied divided by percentage change in price
B
Total supply divided by total demand
C
Price divided by quantity supplied
D
Total quantity supplied divided by price

What is the main determinant of the elasticity of supply?

A
Time period available for production
B
The price of the good
C
Consumer demand
D
Government intervention

What happens when the price of a good rises and the quantity supplied increases?

A
There is a movement along the supply curve
B
The supply curve shifts to the left
C
The supply curve shifts to the right
D
The demand curve shifts

What causes a shift in the supply curve to the right?

A
An improvement in technology
B
An increase in the price of the good
C
A decrease in the number of suppliers
D
A decrease in the price of related goods

What does the movement along the supply curve indicate?

A
A change in the price of the good
B
A change in non-price factors
C
A change in government policy
D
A change in consumer demand