3.1.2.1 The determinants of demand NOTES

Which of the following is a factor that determines the demand for a good or service?

• Technological advancements

• Consumer income

• Number of suppliers

• Production costs

What does a demand curve typically show?

• The relationship between supply and demand

• The relationship between price and quantity demanded

• The relationship between income and quantity supplied

• The relationship between price and quantity supplied

What can cause the demand curve to shift to the right?

• A decrease in the price of the good

• An increase in consumer income

• An increase in the price of substitutes

• All of the above

Which of the following is not a determinant of demand?

• Consumer preferences

• Future expectations

• Technology used in production

• Prices of related goods

How does an increase in the price of a complement affect the demand curve of a good?

• It shifts to the right

• It shifts to the left

• It remains unchanged

• It becomes steeper

What does a movement along the demand curve indicate?

• A change in demand

• A change in quantity demanded due to price change

• A shift in the demand curve

• A change in supply

Which factor would increase the demand for luxury cars?

• A decrease in the income of consumers

• An increase in the price of luxury cars

• An increase in consumer income

• An increase in the price of fuel

What effect does consumer expectation of future price increases have on current demand?

• Decreases demand

• Increases demand

• No effect on demand

• Decreases supply

Which of the following would cause a shift in the demand curve for an inferior good?

• An increase in consumer income

• A decrease in consumer income

• A decrease in the price of the good

• An increase in the price of a complement

How does a change in consumer tastes and preferences affect the demand curve for a good?

• It does not affect the demand curve

• It shifts the demand curve to the right if preferences are favorable

• It shifts the demand curve to the left if preferences are unfavorable

• Both B and C are correct