Quiz # 14



#1 A company faces a -2.5 price elasticity of demand for its product. It is presently selling 10,000 units/month. If it wants to increase quantity sold by 6%, it must lower its price by –

#2 A manufacturer faces price elasticity of demand of a -2 for its product. If it lowers its price by 5%, the increase in quantity sold will be –

#3 In 2015 the nominal rate of interest in country was 6%, and the inflation rate then was 1.5%. So real rate of interest in 2015 was.

#4 A beedi making workshop can hire 5 women by paying them Rs. 300 per day. The 6th woman demands Rs. 350 per day. If this woman is hired then all other women must be paid Rs. 350. The marginal resource (labour) cost of the 6th woman is

#5 At which rate, Reserve Bank of India borrows money from commercial banks?

Current Repo Rate is 6.25%. Increase in Repo Rate increases the cost of borrowingfrom RBI for the banks. In case of inflation, Reserve Bank increases Repo Ratewhich discourages banks to borrow money from Reserve Bank, since this makes credit costlier for banks.

August 22, 2019

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