#1
Which of the following is NOT a determinant of demand?
Technology used in production
ExplanationProduction technology influences supply, not demand.
#2
Which of the following is a determinant of supply?
Cost of inputs
ExplanationInput costs directly influence production supply.
#3
Which of the following is a shift factor of the demand curve?
Change in consumer preferences
ExplanationShifts occur due to changes in preferences.
#4
Which of the following statements best describes the law of demand?
As price decreases, demand increases
ExplanationInverse relationship between price and demand.
#5
Which of the following is a determinant of demand?
Price expectations
ExplanationExpectations about future prices influence current demand.
#6
Which of the following would cause an increase in the demand for a good?
An increase in consumer preferences for the good
ExplanationConsumer preferences influence demand positively.
#7
If the supply of a good decreases while the demand remains constant, what will happen to the equilibrium price and quantity?
Equilibrium price will increase, equilibrium quantity will decrease
ExplanationDecrease in supply leads to scarcity, increasing price and reducing quantity.
#8
If the price of a good decreases and the quantity demanded decreases, what type of goods are they likely?
Inferior goods
ExplanationInferior goods show a negative income elasticity of demand.
#9
Which of the following is likely to lead to a decrease in the equilibrium price of oranges?
A decrease in the cost of producing oranges
ExplanationReduced production costs push prices downward.
#10
If the price of butter increases, and as a result, the demand for margarine increases, what type of goods are butter and margarine?
Complementary goods
ExplanationButter and margarine are consumed together.
#11
When a technological breakthrough reduces the cost of production, what happens in the market?
Supply increases, demand increases
ExplanationLower production costs boost both supply and demand.
#12
If both demand and supply increase simultaneously but the increase in supply is relatively greater, what would happen to the equilibrium price and quantity?
Equilibrium price will decrease, equilibrium quantity will increase
ExplanationGreater increase in supply lowers price, increases quantity.
#13
In a market characterized by perfect competition, how does an increase in consumer demand for a product affect the market price and quantity supplied?
Price increases, quantity supplied increases
ExplanationCompetition drives price to equilibrium.
#14
What happens to the equilibrium price and quantity if demand increases and supply decreases?
Equilibrium price increases, equilibrium quantity decreases
ExplanationPrices rise due to increased demand and reduced supply.
#15
What happens to equilibrium price and quantity if demand decreases and supply increases?
Equilibrium price decreases, equilibrium quantity decreases
ExplanationPrices and quantities both decrease.