Practise 26 real Federal Board questions on Theory of Demand from 2023 to 2026. See the answer and explanation as soon as you answer.
Theory of Demand is one of the 8 main chapters in our Federal Board I.Com Economics question bank (11th and 12th class), and about 8% of its real questions come from it. Tayyari Karo has 26 real questions on this chapter from 2023 to 2026; 14 are multiple choice and marked instantly, and the rest are short and long questions with a model answer. By difficulty: 19 medium, 7 easy.
Work through the questions below, then open the explanation for each one. Redo the ones you missed a few days later.
These are real past-paper questions. Think of your answer first, then open the explanation.
The utility derived from an additional unit of a commodity is known as:
Answer: C. Marginal utility
Marginal utility is the extra satisfaction gained from consuming one additional unit of a good.
If cross elasticity is positive, then how are the two goods related?
Answer: A. Substitute
A positive cross elasticity means a rise in the price of one good increases demand for the other — they are substitutes.
When the demand of a product rises due to factors EXCEPT price, it will be:
Answer: B. Rise in demand
A change in demand caused by non-price factors (income, tastes, etc.) is called a rise (or fall) in demand, shown as a shift of the whole curve.
If there is no change in price, and the quantity demanded increases, it is called:
Answer: D. Rise of demand
A rise in demand (a shift of the whole curve) occurs when quantity demanded increases at the same price due to a non-price factor.
Elasticity of demand for substitutes and jointly demanded goods is called:
Answer: B. Cross elasticity of demand
Cross elasticity of demand measures how the quantity demanded of one good responds to a price change in a related (substitute or complementary) good.
When total utility reaches its maximum, marginal utility will be:
Answer: A. Zero
Total utility is at its peak exactly where marginal utility becomes zero; beyond this, MU turns negative and TU falls.
What is utility? Describe its any three aspects.
Utility is the want-satisfying power of a commodity — the satisfaction a consumer derives from consuming a good or service.
Aspects: (1) Total utility (TU) — the sum total of satisfaction from consuming all units of a good. (2) Marginal utility (MU) — the additional satisfaction from consuming one more unit. (3) Utility is subjective and relative — it varies from person to person and diminishes as more units of the same good are consumed (law of diminishing marginal utility).
With the help of given schedule (Income Rs 5000 → Qd 4; Income Rs 9000 → Qd 3) calculate income elasticity of demand, and also indicate its nature.
Income elasticity of demand, Ey = (% change in quantity demanded) / (% change in income)
% change in Qd = (3 − 4)/4 × 100 = −25%
% change in Income = (9000 − 5000)/5000 × 100 = 80%
Ey = −25% / 80% = −0.31 (approx.)
Since Ey is negative, quantity demanded falls as income rises, meaning the good is an inferior good.
| Session | Questions |
|---|---|
| 2026 Annual | 8 |
| 2025 1st Annual | 5 |
| 2025 2nd Annual | 6 |
| 2024 Annual | 4 |
| 2023 Annual | 3 |
26 real Federal Board (FBISE) Economics questions on Theory of Demand from 2023 to 2026, for 11th and 12th class. Each one shows the session it came from.
No. We could not find an official FBISE marking scheme for these papers, so the answers and explanations are written by Tayyari Karo for practice. Check anything important with your teacher or textbook.
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