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301947AssignmentsUnit 3

The document contains a series of questions and answers related to the concept of demand in economics. It covers topics such as the definition of demand, the effects of price changes, the substitution effect, factors that shift the demand curve, elasticity of goods, and the relationship between price and quantity demanded. The content is structured as a quiz format to test understanding of these economic principles.

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7 views

301947AssignmentsUnit 3

The document contains a series of questions and answers related to the concept of demand in economics. It covers topics such as the definition of demand, the effects of price changes, the substitution effect, factors that shift the demand curve, elasticity of goods, and the relationship between price and quantity demanded. The content is structured as a quiz format to test understanding of these economic principles.

Uploaded by

mohannadmagdihaddad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Unit 3

1. What is demand in economics?


A) The total supply of a good in a market
B) The willingness and ability of consumers to buy goods and services
C) The government's control over pricing
D) The relationship between supply and wages
2. What happens to demand when the price of a product increases, assuming all other factors remain constant?
A) Demand increases
B) Demand remains the same
C) Demand fluctuates randomly
D) Demand decreases
3. What is the substitution effect?
A) Consumers choosing a cheaper alternative when prices rise
B) Producers making more of a product
C) A decrease in demand due to higher consumer income
D) A tax placed on luxury goods
4. Which of the following is a factor that can shift the demand curve?
A) A change in consumer income
B) A change in supply
C) A decrease in the number of producers
D) A price change of the same good
5. What does it mean if a product is elastic?
A) It is in high demand regardless of price
B) Quantity demanded changes significantly
C) It is a necessity with no substitutes
D) It is rarely purchased by consumers
6. Which of the following is an example of an inelastic good?
A) Clothing
B) Fast food
C) Smartphones
D) Gasoline
7. What happens when two goods are substitutes?
A) A rise in the price of one decreases demand for the other
B) They must always be sold together
C) They are always produced by the same company
D) A decrease in demand for one increases demand for the other
8. What happens to the demand for normal goods when income decreases?
A) Demand increases
B) Demand stays the same
C) Demand decreases
D) Demand becomes more elastic
9. Why do luxury goods typically have a high income elasticity of demand?
A) People buy them regardless of price
B) Their price is always high
C) They have a fixed supply
D) People buy more when their income rises
10. According to the law of demand, how are price and quantity demanded related?
A) They always increase together
B) Price and quantity demanded move in opposite directions
C) Higher prices lead to higher demand
D) There is no relationship between them

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