Economics Quiz (4)

What do human wants become when backed by purchasing power?

• Needs

• Wants

• Demands

• Desires

What does the law of demand state?

• Demand is unrelated to price

• Demand increases with price

• Demand decreases with price

• Demand remains constant with price

What is a Giffen good?

• A good that increases in demand when its price rises

• A good that is always inelastic

• A luxury good

• A good that has no substitutes

What is the primary determinant of supply?

• Consumer preferences

• Market demand

• Cost of factors of production

• Government regulations

What happens to supply if the price of a product is expected to fall in the future?

• Current supply decreases

• Supply becomes elastic

• Supply remains unchanged

• Current supply increases

What is the relationship between price and quantity supplied according to the law of supply?

• Direct

• Inverse

• Variable

• No relationship

What does price elasticity of demand measure?

• Change in supply due to price

• Change in demand due to price

• Change in production costs

• Change in consumer preferences

If a product's price increases and demand decreases, what type of elasticity is it?

• Elastic

• Unitary elastic

• Inelastic

• Perfectly elastic

What is the formula for price elasticity of demand?

• Percentage Change in Price ÷ Percentage Change in Quantity Demanded

• Percentage Change in Quantity Demanded ÷ Percentage Change in Price

• Total Revenue ÷ Price

• Total Cost ÷ Quantity

What happens to total revenue if demand is elastic and price increases?

• Total revenue remains unchanged

• Total revenue decreases

• Total revenue fluctuates

• Total revenue increases