Demand Revision Quiz

Imagine that Vietnam's population grows by 20% in one year. The change in ​ (a)   ​ (b)   leads to a ​ (c)   . In this case ​ (d)   . There is a/an ​ (e)   .

• a non-price determinant
• (population)
• shift of the curve
• movement along the curve
• the curve shifts to the right
• the curve shifts to the left
• increase in demand
• decrease in demand
• increase in quantity demanded
• price

Assuming that coffee and tea are substitutes for consumers, which of the following is correct?

• An increase in the price of tea will lead to an increase in demand for coffee

• An increase in the price of tea will lead to a decrease in demand for coffee

• An increase in the price of tea will lead to an expansion in demand for coffee

• An increase in the price of tea will lead to a contraction in demand for coffee

Answer explanation

Coffee and tea are substitute products. Therefore, as the price of one (tea) increase, people will swap to the other (coffee). This causes an increase in the demand for coffee.

Imagine that the news reports that, due to global factors, the price of petrol (fuel) is likely to increase substantially next week. What impact is this likely to have on demand for petrol now?

Answer explanation

The likely increase in petrol price next week will lead to an immediate increase in demand for petrol now as consumers rush to purchase before the price hike.

Refer to the diagram, which of the following factors could have caused the change shown?

• A decrease in the price of Product Z, a complement

• A decrease in consumer incomes

• A decrease in the price of Product X

• An expectation by consumers that Product X's price will decrease next week

Demand for goods and services reflects:

• the principle that there is a positive relaitonship between the price and the quantity

• the government's choices of taxes

• the willingness and ability of buyers to purhase a product

• the uncertainty of the need for a good as the price of the good increases

The fact that price and quantity demanded are related negatively illustrates the:

• law of supply

• law of quantity supplied

• law of demand

• law of quantity demanded

A demand curve for Kanye West concert tickets would show the

• number of tickets the box office is willing to ell at various prices

• number of people who need tickets

• quality of people who want to buy these concert tickets

• number of tickets that will be purchased at various prices

A demand curve

• has a positive slope

• has a negative slope

• is constant regardless of price

• is based on the assumption of a stable supply curve

Answer explanation

The correct choice is 'has a negative slope' because a demand curve typically shows an inverse relationship between price and quantity demanded.

At a price of $5, Sam buys 10 units of a product. When the price increases to $6, Sam buys 8 units. Martha says Sam's demand has decreased. Is Martha correct?

• Yes, Martha is correct. Sam's demand has decreased.

• No, Martha is incorrect. Sam's demand has increased.

• No, Martha is incorrect. Sam's quantity demanded has decreased and his demand has not changed.

• No, Martha is incorrect. Sam's quantity demanded has increased, and his demand has increased.

Demand is a relationship between which two economic variables?

• the cost of producing a particular good and the quantity of the good produced

• the cost of producing a particular good and the quantity of the good consumers are willing to buy

• The price of a particular good and the price consumers are willing to pay

• the price of a particular good and the quantity of the good consumers are willing and able to buy.