THEORY OF DEMAND

Which of the following is NOT a determinant of demand for diesel?

• The price of petrol

• The price of diesel

• The price of automobile

• Consumer’s income

Sugar and honey are viewed as substitute for each other in many cooking applications. If the price of sugar rises, we would expect _________________.

• the demand for honey to increase

• the quantity demanded of honey to increase

• the demand for honey to decrease

• the quantity demanded of honey to decrease

The law of demand shows the relationship between __________________.

• consumer’s income and demand.

• population and demand.

• demand and supply.

• price and quantity demand.

The definition of demand in an economic perspective is ________________.

• the desire to purchase goods and services at a certain price.

• the desire of all individuals in a market to purchase goods.

• the desire of an individual to obtain goods and services, supported by the ability to pay a certain price.

• he ability of an individual to spend his/her income to purchase goods and services.

The law of demand states that if the price of CD’s rise, consumers will

• Buy more CDs
• Buy fewer CDs
• Quantity demanded will not change

The diagram represents a

• increase in demand
• decrease in demand

As prices go up, ______________ goes down.

• Supply
• Demand
• Utility

Demand includes people who are willing and _____________ to buy a product.

• Able
• Hopeful
• Elastic

Which of the following could be a substitute for a soft drink?

• Bread
• Water
• Shirt

Medicine is a _______________.

• Necessity
• Luxory
• Utility