PRS PDHR ECONOMICS

Demand is the amount of a good that buyers are willing and able to purchase (willing to buy at a certain price).

• True

• False

Answer explanation

Its not demand, its Quantity Demanded

Suppose that X and Y are substitute goods. If the price of good X increases, we can expect:

• the demand for good X to shift to the left.
• an upward movement along the demand curve for good Y.
• the demand curve for good Y to shift to the right.
• a downward movement along the demand curve for good Y.

The law of demand states that other things remaining unchanged, price and

• sales are positively related

• income are positively related

• quantity demanded are positively related

• quantity demanded are inversely related

The number of computers bought increased by 20 per cent when the price of online services declined by 10 per cent. Assuming other factors are held constant, computers and online services are classified as:

• complements.
• unrelated goods.
• substitutes.
• social goods.

If the price elasticity of supply equals zero, this implies that:

• suppliers can easily change the quantity supplied of the product as the price of the product changes.
• the period under consideration is a very long time period.
• the supply curve is perfectly vertical.
• the percentage change in quantity supplied exceeds the percentage change in product price.

Demand is unit elastic if it is less than 1.0

• True
• False

If the elasticity equals to 0, is demand perfectly inelastic or elastic

• demand perfectly inelastic

• perfectly inelastic

Azmadi Bakery observes the following: When it raises the price of bread, the total revenue from bread increases, and vice versa. This indicates that

• the demand for bread must be unitary elastic

• the demand for bread must be inelastic

• the demand for bread must be elastic

• there are many substitutes for bread

If the country uses all its resources to produce only one type of good, it is called Specialization

• True

• False

Choose the most appropriate answer for the question.

Why management of a company need to know the cost of a product?

• To make the products famous

• To determine the selling price

• To determine the GST

• To promote the product in social media