Econ 2

What is demand regarded as in a business enterprise?

• A secondary factor

• The lifeline

• An optional aspect

• A minor detail

According to Veera Anstey, what is demand for a particular good?

• The amount that will be purchased at a given time and price

• The total quantity available in the market

• The desire to own a product

• The willingness to pay any price

What does the law of demand state?

• Demand extends with a fall in price

• Demand is constant regardless of price

• Demand decreases with a fall in price

• Demand increases with a rise in price

Which of the following is NOT an assumption used in defining demand?

• No change in the price of the commodity

• No change in government policy

• No change in consumer preferences

• No change in consumer income

What happens to the demand for a commodity if its price rises?

• Demand remains unchanged

• Demand decreases

• Demand fluctuates wildly

• Demand increases

What is price elasticity of demand?

• The responsiveness of demand to changes in price

• The total revenue generated by a firm

• The quantity of goods supplied

• The fixed cost of production

What does a negative income elasticity indicate?

• Goods are normal

• Goods are necessities

• Goods are luxury

• Goods are inferior

What is the definition of cross elasticity of demand?

• Responsiveness of supply to changes in price

• Responsiveness of supply to changes in consumer preferences

• Responsiveness of demand to changes in the price of related goods

• Responsiveness of demand to changes in consumer income

What does the law of supply state?

• Lower prices lead to higher supply

• Supply is independent of price

• Higher prices lead to greater quantity supplied

• Higher prices lead to lower supply

Which of the following is a factor affecting supply?

• Consumer preferences

• Price of related goods

• All of the above

• Government regulations