Microeconomics (Demand & Supply) Environment and Sustainability

What is micro-economics the branch of economics that considers?

• The behavior of large corporations and governments only

• The behavior of decision makers in the economy, such as individuals, households, and business organizations

• The production of goods and services without considering the scarcity of resources

• The allocation of resources without the involvement of individuals or businesses

According to the text, what happens to the demand if the price of hotel rooms increases?

• The demand will increase because more people will want to stay in expensive rooms

• The demand will remain unchanged regardless of the price

• The demand is likely to contract

• The demand will increase because rooms become more available

What is the main reason hoteliers might charge more during school holidays?

• Because the law of demand dictates higher prices during holidays

• Because they want to close down for the winter months

• Because high demand results in consumers having to pay higher prices

• Because they want to reduce the occupancy levels

What does the supply curve typically do as prices increase?

• It slopes downwards

• It remains constant

• It slopes upwards

• It becomes horizontal

What can be inferred about consumer preferences from the supply and demand curves?

• Consumers prefer prices to be as high as possible

• Consumers want prices to be as low as possible and the quantity of goods or services to be high

• Consumers are indifferent to price changes

• Consumers prefer a constant price regardless of the quantity of goods or services

What happens to the demand curve if a celebrity has been staying at a specific hotel?

• It does not change.

• It shifts to the right.

• It shifts to the left.

• It becomes vertical.

What can cause the supply curve to shift to the left?

• An increase in raw material prices.

• A decrease in consumer preferences.

• A decrease in the price of substitute products.

• An increase in the efficiency of production.

What type of goods see an increase in demand as income increases?

• Inferior goods.

• Substitute goods.

• Normal goods.

• Necessity goods.

Which category of goods is less sensitive to income and price changes and is linked to personal priorities?

• Luxury goods.

• Normal goods.

• Necessity goods/Substitute goods.

• Inferior goods.

What is likely to happen when the price of a hotel room drops below the equilibrium point?

• The market experiences surpluses.

• The market experiences shortages.

• The demand curve shifts to the right.

• The supply curve becomes vertical.