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Demand H1

The document discusses various scenarios affecting demand and supply in economics, including how price changes can influence consumer behavior and market equilibrium. It presents multiple-choice questions regarding the effects of price changes on demand curves for different types of goods, such as inferior goods and substitutes. Additionally, it explores the implications of price as a rationing mechanism and factors that may keep equilibrium prices stable despite changes in related goods.

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30 views10 pages

Demand H1

The document discusses various scenarios affecting demand and supply in economics, including how price changes can influence consumer behavior and market equilibrium. It presents multiple-choice questions regarding the effects of price changes on demand curves for different types of goods, such as inferior goods and substitutes. Additionally, it explores the implications of price as a rationing mechanism and factors that may keep equilibrium prices stable despite changes in related goods.

Uploaded by

sexysexy1234
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

A rise in the price of a good is accompanied by an increase in the quantity demanded.

What could explain this?

A Consumers spend a high proportion of disposable income on the good.

B The price of a complementary good has also increased.

C The price of the good is taken to be an indication of the level of quality.

D The substitute goods are all very much more expensive.

What causes the demand curve for an inferior good to shift to the right?

A a decrease in consumer incomes

B a decrease in income tax

C a decrease in the price of a substitute good

D a decrease in the price of the good


On a demand and supply diagram, other things remaining the same, a fall in the price of a

commodity will normally shift

A the demand curve for a substitute to the right.

B the demand curve for the commodity to the right.

C the supply curve for a jointly produced commodity to the left.

D the supply curve for the commodity to the left.


For price to act as a rationing mechanism for a final product, the effect of a rising price must be to

A attract new firms into the market.

B generate additional profits for producers.

C reduce the quantity demanded by some individuals.

D signal the need for redeployment of labour.


Good X has a substitute, good Y, and a complement, good Z. The price of good Y decreases and

the price of good Z increases.

Why might the equilibrium price of good X remain unchanged?

A Producers of good X adopt new technology.

B Producers of good X receive a subsidy.

C Some firms stop production of good X.

D The tax on the production of good X is cut.

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