#1
Which of the following best describes the law of demand?
As the price of a good increases, the quantity demanded increases.
As the price of a good decreases, the quantity demanded increases.
As the price of a good increases, the quantity demanded decreases.
As the price of a good decreases, the quantity demanded decreases.
#2
What is likely to happen to the quantity demanded of a product if its price decreases?
The quantity demanded increases.
The quantity demanded decreases.
The quantity demanded remains constant.
The quantity demanded becomes zero.
#3
Which of the following is an example of a complementary good?
Peanut butter and jelly
Coffee and tea
Beef and chicken
Shoes and socks
#4
If a good is considered a normal good, what happens to the quantity demanded when income increases?
Quantity demanded decreases.
Quantity demanded increases.
Quantity demanded remains constant.
Quantity demanded becomes zero.
#5
Which of the following is NOT a determinant of demand?
Price of the product
Tastes and preferences
Price of inputs
Expectations about future prices
#6
Which of the following factors can cause a shift in the demand curve?
Change in the price of the product
Change in consumer preferences
Change in the price of a complementary good
Change in the price of inputs
#7
Which of the following factors does NOT influence consumer demand?
Price of the product
Income of the consumer
Price of complementary goods
Number of firms producing the product
#8
What is the income effect in relation to the law of demand?
When a change in price affects the purchasing power of a consumer's income.
When a change in price affects the quantity demanded of a product.
When a change in price influences consumer preferences for a product.
When a change in price leads to a change in consumer expectations.
#9
What does the cross elasticity of demand measure?
The responsiveness of quantity demanded to a change in the price of a substitute good.
The responsiveness of quantity demanded to a change in income.
The responsiveness of quantity demanded to a change in the price of a complementary good.
The responsiveness of quantity demanded to a change in the price of the same good.
#10
Which of the following factors would NOT shift the demand curve for a product?
Changes in consumer tastes and preferences
Changes in the price of the product
Changes in the price of related goods
Changes in technology affecting the production of the product
#11
What happens to the demand for a product when there is a decrease in the price of its substitute?
Demand decreases
Demand increases
Demand remains unchanged
Demand becomes elastic
#12
What is the main assumption underlying the law of demand?
Consumers have perfect information.
Consumers have unlimited resources.
Consumers act rationally to maximize utility.
Consumers only buy luxury goods.
#13
Which of the following is NOT a reason for the downward slope of the demand curve?
Income effect
Substitution effect
Diminishing marginal utility
Engel's Law
#14
If the demand for good X is perfectly elastic, what does this imply about the price elasticity of demand?
Price elasticity of demand is zero.
Price elasticity of demand is less than one.
Price elasticity of demand is infinite.
Price elasticity of demand is greater than one.
#15
What is the relationship between price elasticity of demand and total revenue?
They move in the same direction.
They move in opposite directions.
Price elasticity of demand has no effect on total revenue.
Price elasticity of demand affects total revenue only when it is zero.
#16
If the price of a product increases and its demand remains constant, what is the price elasticity of demand?
Perfectly elastic
Perfectly inelastic
Unitary elastic
Relatively elastic
#17
If the cross elasticity of demand for two goods is positive, what can be said about their relationship?
They are substitutes
They are complements
They are independent goods
They are inferior goods
#18
If the price of a product increases by 10% and the quantity demanded decreases by 5%, what is the price elasticity of demand?