Economics 10 Q1 - Demand

1. Which of the following is an example of the factor of production known as "land"?

• Factory workers

• A machine used for production

• A river used to generate hydroelectric power

• The skills and knowledge of a software engineer

Opportunity cost is best defined as:

• The total money spent on goods and services

• The benefit of the next best alternative that is foregone when a choice is made

• The additional benefit gained from consuming one more unit of a good

• The price of a product in a competitive market

If a country chooses to produce 100,000 cars instead of 50,000 trucks, the opportunity cost of producing the cars is:

• The cost of materials used to produce cars

• The total number of trucks produced

• The 50,000 trucks that could have been produced

• The profit earned from selling cars

The law of demand states that, ceteris paribus:

• As the price of a good increases, the demand for that good also increases

• As the price of a good decreases, the demand for that good increases

• As the price of a good decreases, supply increases

• As the price of a good increases, the supply decreases

A movement along the demand curve is caused by:

• A change in consumer income

• A change in the price of the good itself

• A change in the price of a substitute good

• A change in consumer preferences

Which of the following will cause a shift to the right in the demand curve for smartphones?

• An increase in the price of smartphones

• A fall in consumer incomes

• A rise in the price of a complementary good, such as phone cases

• A positive change in consumer tastes favoring smartphones

7. Which of the following would most likely lead to a decrease in the demand for cars?

• An increase in the price of gasoline

• A decrease in the price of cars

• A rise in consumer incomes

• A decrease in the price of car insurance

If a product is considered a luxury good, what happens to demand when consumer incomes increase?

• Demand decreases

• Demand remains unchanged

• Demand increases significantly

• Demand increases only slightly

A good is considered "inferior" if:

• Its demand increases when the price decreases

• Its demand decreases as consumer incomes rise

• It has no close substitutes

• Its demand increases when consumer incomes rise

Which of the following could cause a leftward shift in the demand curve for a good?

• A decrease in the price of a substitute

• An increase in consumer incomes for an inferior good

• A positive change in consumer preferences

• A decrease in the price of the good itself