(a) True If a good has close substitutes, the price elasticity of demand for a commodity will be very elastic as some other commodities can be used for it. A small rise in the price of such a commodity will induce consumers to switch their consumption to its substitutes.
(b) True Rate of taxation depends upon the income groups in a progressive tax structure, where people with more income pay a higher percentage of that income in tax than do those with less income. Progressive taxes are imposed in an attempt to reduce the tax incidence of people with a lower ability-to-pay.
(c) False The price level in a perfectly competitive market is not determined by an individual seller as there are large number of sellers i.e. there are large number of firms. Every firm in the industry is thus, a price taker. It can sell any quantity of its own product at the going price. The demand for its product is perfectly elastic.
(d) True Efficiency of labour is determined by good working conditions. Good lighting, ventilations, sanitations, artistic structure of the building, clean and quite atmosphere have a substantial bearing on the efficiency of workers.
(e) False There is a direct relationship between price and quantity supplied. In this statement, change in price is the cause and change in supply is the effect. It may be noted that at higher prices, there is greater incentive to the producers or firms to produce and sell more.
