#1
Which of the following is a determinant of demand?
Price of the product
ExplanationPrice influences demand.
#2
What does the law of supply state?
As price increases, quantity supplied increases
ExplanationPositive correlation between price and quantity supplied.
#3
In the demand and supply model, what happens when there is a shortage of a good?
Prices rise
ExplanationShortages increase prices.
#4
What is elasticity of demand?
The percentage change in quantity demanded divided by the percentage change in price
ExplanationMeasure of responsiveness of quantity demanded to price changes.
#5
What is the difference between a movement along the demand curve and a shift in the demand curve?
A movement is caused by changes in price, while a shift is caused by non-price factors
ExplanationPrice vs. non-price factors influence shifts in demand.
#6
Which factor is considered a non-price determinant of supply?
Technology
ExplanationTechnological advancements impact supply.
#7
How does a subsidy affect the market equilibrium?
Decreases equilibrium price, increases equilibrium quantity
ExplanationSubsidies influence price and quantity.
#8
What is the difference between a normal good and an inferior good?
Normal goods are necessities, while inferior goods are luxury items
ExplanationClassification based on consumer behavior.