C2 : SET 5 - DEMAND AND SUPPLY THEORY

The supply of Proton Wira cars will increase if _________________.

• the demand for Proton Saga car decreases.

• the government reduces taxes on Proton Wira cars.

• the price of Proton Wira cars falls.

• changes in the prices of factors of production.

The demand curve for a goods will have a positive slope if ___________________.

• the goods are prestigious goods.

• the country experiences an economic upturn.

• the price of the goods is expected to increase in the future.

• the price of the good is expected to decrease in the future.

The law of supply states that there exists a/an __________ relationship between price and quantity supply.

• elastic

• infinity

• positive

• negative

If an increase in the price of paper leads to a decrease in the demand for pencils, then paper and pencils are ___________________.

• substitutes goods.

• complementary goods.

• normal goods.

• inferior goods.

Which of the following shifts the demand for watches to the right?

• A decrease in the price of watches.

• A decrease in consumer income if a watch is a normal good.

• An increase in the price of watches.

• An increase in consumer income if a watch is a normal good.

If an increase in the price of paper leads to a decrease in the demand for pencils, then paper and pencils are ___________________.

• substitutes goods.

• complementary goods.

• normal goods.

• inferior goods.

Which of the following shifts the demand for watches to the right?

• A decrease in the price of watches.

• A decrease in consumer income if a watch is a normal goods.

• An increase in the price of watches.

• An increase in consumer income if a watch is a normal goods.

The law of supply states that an increases in the price of a goods ; ________________.

• decreases the demand for that goods.

• increases the supply of that goods.

• decreases the quantity demanded for that goods.

• increases the quantity supplied of that goods.