#1
Which of the following factors will NOT cause a shift in the demand curve for smartphones?
An increase in the price of smartphones
ExplanationPrice changes cause movements along the curve, not shifts.
#2
What is the law of demand?
As the price of a good increases, the quantity demanded decreases, ceteris paribus.
ExplanationHigher prices reduce demand, assuming other factors remain constant.
#3
What is the relationship between price and quantity demanded on the demand curve?
Inversely proportional
ExplanationHigher prices reduce the quantity demanded.
#4
What is the law of supply?
As the price of a good increases, the quantity supplied increases, ceteris paribus.
ExplanationHigher prices motivate producers to supply more.
#5
What is the relationship between price and quantity supplied on the supply curve?
Directly proportional
ExplanationHigher prices lead to higher quantities supplied.
#6
What would cause a movement along the demand curve for coffee?
A change in the price of coffee
ExplanationChanges in price directly affect quantity demanded.
#7
What does a price ceiling set below the equilibrium price result in?
A shortage of the good
ExplanationPrice ceilings limit the price, creating excess demand.
#8
What is the income elasticity of demand for a normal good?
Positive
ExplanationNormal goods see demand increase with income.
#9
If the cross-price elasticity of demand for two goods is negative, what can we infer about their relationship?
They are complements
ExplanationComplementary goods' demand varies inversely.
#10
What effect does an increase in consumer income have on the demand for inferior goods?
Decrease in demand
ExplanationHigher incomes lead to a preference for superior goods.
#11
Which of the following would cause a shift to the right in the supply curve for smartphones?
A decrease in the cost of production for smartphones
ExplanationLower costs encourage more supply at every price.
#12
Which of the following would NOT shift the supply curve for wheat?
An increase in the price of wheat
ExplanationPrice changes affect quantity supplied, not the curve itself.
#13
What is the main determinant of elasticity of supply?
The time horizon considered
ExplanationLonger timeframes allow for more adjustments in supply.
#14
What happens to the equilibrium price and quantity of oranges if both demand and supply increase?
Price and quantity both increase
ExplanationBoth factors push the price and quantity up.
#15
If the government imposes a tax on sellers of a good, what happens to the equilibrium price and quantity?
Price increases, quantity decreases
ExplanationTaxes raise prices and reduce quantity exchanged.
#16
What does the price elasticity of demand measure?
The percentage change in quantity demanded divided by the percentage change in price
ExplanationIt quantifies how responsive quantity demanded is to price changes.
#17
What happens to the equilibrium price and quantity when both demand and supply decrease?
Price remains unchanged, quantity decreases
ExplanationBoth factors push the price up, but the quantity down.