#1
What is the law of demand?
As the price of a good increases, the quantity demanded decreases.
ExplanationInverse relationship between price and quantity demanded.
#2
Which of the following factors does NOT influence demand?
Government regulations
ExplanationExternal regulatory influence on consumer behavior.
#3
What does the demand curve illustrate?
The relationship between price and quantity demanded, holding all other factors constant.
ExplanationVisual representation of demand changes.
#4
What is the law of diminishing marginal utility?
As a consumer consumes more units of a good, the additional satisfaction from each additional unit decreases.
ExplanationDecline in satisfaction with each consumed unit.
#5
What is the formula for price elasticity of demand?
Percentage change in quantity demanded / Percentage change in price
ExplanationMathematical representation of responsiveness.
#6
What is the income elasticity of demand for inferior goods?
Negative
ExplanationIncome increase leads to demand decrease.
#7
What is the cross-price elasticity of demand between complementary goods?
Negative
ExplanationPrice increase in one leads to decrease in demand for another.
#8
What does a shift to the right in the demand curve indicate?
An increase in quantity demanded at each price level.
ExplanationExpansion of demand across price levels.
#9
Which of the following is NOT a type of demand elasticity?
Substitution elasticity of demand
ExplanationAbsence of responsiveness to substitutes.
#10
Which of the following goods is most likely to have an elastic demand?
Diamonds
ExplanationLuxury item with numerous substitutes.
#11
Which of the following is NOT a determinant of demand elasticity?
Necessity of the good
ExplanationDegree of essentialness impacting elasticity.
#12
What is the price elasticity of demand for perfectly inelastic goods?
Equal to zero
ExplanationNo change in quantity demanded with price change.
#13
What is the value of price elasticity of demand when demand is unitary elastic?
Equal to one
ExplanationProportional change in demand with price.
#14
In which scenario would the cross-price elasticity of demand be positive?
Between substitute goods
ExplanationPositive correlation in demand changes.
#15
What is the concept of price discrimination?
Charging different prices to different customers based on their willingness to pay.
ExplanationVaried pricing strategy based on consumer traits.