Question : The Psychological Law of Consumption states that
Option 1: proportionate increase in consumption is less than a proportionate increase in income.
Option 2: increase in income is equal to an increase in consumption.
Option 3: increase in consumption is greater than the increase in income.
Option 4: consumption does not change with a change in income.
Correct Answer: proportionate increase in consumption is less than a proportionate increase in income.
Solution : The correct answer is a proportionate increase in consumption is less than a proportionate increase in income.
According to the Psychological Law of Consumption, when income rises, consumption rises as well, although at a slower rate than income. It means that people are more likely to save a portion of their higher earnings. People may save a portion of their income once their fundamental requirements are covered to save for future needs or to attain financial objectives.
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Question : Which law states that with constant taste and preference, the proportion of income spent on food stuff diminishes as income increases?
Option 1: Say's Law
Option 2: Griffin's Law
Option 3: Gresham's Law
Option 4: Engel's Law
Question : In 1834, who proposed a law that states that the current induced by a change in flow opposes the effect of creating the change?
Option 1: David Brewster
Option 2: Henry Moseley
Option 3: Christian Johann Doppler
Option 4: Heinrich Friedrich Lenz
Question : Which of these is not a part of the classification of economic activities carried out in an economy?
Option 1: Production
Option 2: Consumption
Option 3: Distribution
Option 4: Law and order
Question : Which law was developed in the 1600s to describe that any force applied to a confined fluid is transmitted equally in all directions, regardless of the shape of the container?
Option 1: Magnus's law
Option 2: Graham's law
Option 3: Pascal's law
Option 4: Torricelli's law
Question : Law of Demand states that there is a negative relationship between ______.
Option 1: demand for a commodity and its supply
Option 2: demand for a commodity and its price
Option 3: tax on a commodity and its price
Option 4: supply of a commodity and its price
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