Cl- X-ECO- 1

What does the Law of Demand state?

• Price and quantity demanded are directly related

• Price and quantity demanded are inversely related

• Price and quantity supplied are inversely related

• Price and demand have no relation

According to the Law of Supply, when the price of a good increases, the quantity supplied:

• Decreases

• Increases

• Stays the same

• Doubles

What is the primary reason for the Law of Demand?

• Consumer preferences

• Availability of substitutes

• The income and substitution effects

• Government intervention

If there is an increase in production costs, what happens to the supply curve?

• Shifts right

• Shifts left

• Stays the same

• Becomes steeper

What is the major difference between demand and supply?

• Demand shows willingness to buy, while supply shows willingness to sell

• Demand depends on technology, while supply depends on income

• Demand always exceeds supply

• Supply determines price, but demand does not

A demand curve generally slopes:

• Upward

• Downward

• Horizontally

• Vertically

A demand schedule is a:

• Table showing the quantity demanded at different prices

• Graph showing the demand curve

• Chart of government-imposed prices

• Record of past prices

If the price of a product falls, what happens to the demand for a substitute good?

• Increases

• Decreases

• Stays the same

• Becomes unpredictable

The graphical representation of the law of demand is called:

• Demand schedule

• Demand graph

• Demand function

• Demand curve

If the demand curve shifts to the right, it indicates:

• A decrease in demand

• An increase in demand

• No change in demand

• A decrease in supply