#1
What is the law of demand?
As price decreases, quantity demanded increases
ExplanationInverse relationship between price and quantity demanded
#2
What is elasticity of demand?
A measure of how responsive quantity demanded is to a change in price
ExplanationSensitivity of demand to price changes
#3
What is the difference between individual demand and market demand?
Individual demand is the demand of a single consumer, while market demand is the sum of individual demands in the market.
ExplanationAggregation of individual preferences
#4
What is the concept of 'price elasticity of demand'?
A measure of how responsive quantity demanded is to changes in price.
ExplanationSensitivity of demand to price changes
#5
What is the concept of 'price ceiling' in economics?
A legal maximum price set by the government to prevent prices from rising above a certain level.
ExplanationGovernment intervention in market pricing
#6
What does the demand curve illustrate?
The relationship between price and quantity demanded
ExplanationGraphical representation of demand schedule
#7
Which factor does NOT typically influence demand?
Cost of production
ExplanationRelates to supply rather than demand
#8
If the cross-price elasticity of two goods is positive, what does it indicate about the goods?
They are substitutes
ExplanationGoods with interchangeable utility
#9
What is the income elasticity of demand for a normal good?
Positive
ExplanationDirect relationship between income and demand
#10
What is the 'law of supply' in economics?
As the price of a good increases, the quantity supplied increases.
ExplanationPositive relationship between price and quantity supplied
#11
What is an inferior good?
A good for which demand decreases as income increases
ExplanationGoods whose demand falls with rising income
#12
According to the law of diminishing marginal utility, what happens as a consumer consumes more of a good?
Marginal utility decreases
ExplanationDecreasing additional satisfaction from consuming more
#13
What is the concept of consumer surplus?
The difference between the highest price a consumer is willing to pay and the price they actually pay
ExplanationExcess utility gained by paying less than maximum
#14
In the context of demand, what is the 'Giffen Paradox'?
A situation where the demand for a good increases as its price rises
ExplanationUnusual case of demand contrary to law of demand
#15
What is the concept of 'elasticity of supply'?
A measure of how responsive quantity supplied is to a change in price.
ExplanationSensitivity of supply to price changes