#1
Which of the following factors would NOT cause a shift in the demand curve?
Change in the cost of production
ExplanationCost of production affects supply, not demand.
#2
What effect does an increase in the price of butter have on the supply curve for margarine?
Shifts the supply curve for margarine to the left
ExplanationButter and margarine are substitutes; an increase in butter price reduces margarine supply.
#3
What is the law of demand?
As the price of a good increases, the quantity demanded decreases
ExplanationInversely proportional relationship between price and quantity demanded.
#4
Which of the following would cause a movement along the demand curve?
Change in the price of the good
ExplanationMovement along curve due to price changes, not shifts.
#5
Which of the following is NOT a determinant of demand?
Technology
ExplanationTechnology primarily affects supply, not demand.
#6
What is the likely effect on the demand for umbrellas during a rainy season?
Increase in demand
ExplanationRainy season increases need for umbrellas, boosting demand.
#7
Which of the following is a determinant of supply?
Taxes
ExplanationTaxation influences production costs and thus affects supply.
#8
What happens to the equilibrium price and quantity of oranges if both the demand and supply increase?
Price and quantity both increase
ExplanationDual increase in demand and supply leads to higher equilibrium price and quantity.
#9
What effect would an improvement in technology have on the supply curve?
Shift the supply curve to the right
ExplanationTechnological advancement increases supply efficiency.
#10
If the price of coffee increases, what happens to the demand for tea (a substitute good)?
Demand for tea increases
ExplanationHigher coffee price leads consumers to seek tea, increasing its demand.
#11
Which of the following is a factor that could shift the supply curve to the right?
Decrease in taxes on producers
ExplanationLower taxes reduce production costs, increasing supply.
#12
If both the demand and supply increase but the increase in demand is relatively greater, what will happen to the equilibrium price and quantity?
Price increases, quantity increases
ExplanationGreater demand increase raises both price and quantity at equilibrium.
#13
Which of the following is an example of a non-price determinant of demand?
Income
ExplanationChanges in income affect demand regardless of price.
#14
What is the likely effect of a decrease in the price of gasoline on the demand for electric cars?
Increase in demand for electric cars
ExplanationLower gas price makes electric cars relatively more attractive.
#15
In which market structure does a single firm control the entire market?
Monopoly
ExplanationOne dominant firm with significant market power.
#16
What is a characteristic of monopolistic competition?
A large number of firms
ExplanationMany firms, each with differentiated products, compete.