Demand, Supply and Equilibrium

The diagram represents a

• increase in demand
• decrease in demand

A new study has shown that avocados are extremely healthy. The demand for avocados has increased due to a change in

• market size
• price of a substitute good
• price of a complementary good
• tastes and preferences 

If the price of Frozen Yogurt increased then the demand for ice cream will 

• increase
• decrease

The Hong Kong government reduced income tax by 10%. The demand for shoes will 

• increase
• decrease

The law of demand states that as the price increases then 

• quantity demanded increases
• quantity demanded decreases
• demand increases
• demand decreases

The desire to have some good or service and the ability to pay for it

• supply

• equilibrium

• demand

• quantity demanded

Elasticity refers to

• how producers of goods and services react to price changes

• how consumers of goods and services react to price changes

• how far a supply of scarce goods can be stretched

• how often the price of a good or service changes when quantity demanded changes

Which of these shows an increase in the quantity demanded?

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Which of these shows a decrease in the quantity demanded?

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Which of these demonstrates inelastic demand?

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