Analyzing the Impact of Changing Tastes and Expectations on Demand
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Questions and Answers

Which two factors determine the quantity of each good produced and the price at which it is sold in a market economy?

  • Production and consumption
  • Income and resources
  • Utility and scarcity
  • Supply and demand (correct)

    • What is a market?

  • A place where goods are produced
  • A group of buyers and sellers of a particular good or service (correct)
  • A system of exchange between countries
  • A government institution that regulates prices

    • What happens to the price of vegetables in the market when there is a flood outside Dhaka?

  • It remains the same
  • It falls
  • It is unpredictable
  • It rises (correct)

    • What happens to the price of airline tickets during summer?

    <p>It rises</p> Signup and view all the answers

    What happens to the price of oil in the world market when there is war in the Middle East or Ukraine?

    <p>It increases</p> Signup and view all the answers

    What do supply and demand determine in a market economy?

    <p>Both prices and quantity produced</p> Signup and view all the answers

    What must be considered first to understand how any event or policy will affect the economy?

    <p>Supply and demand</p> Signup and view all the answers

    Which of the following is a characteristic of a perfectly competitive market?

    <p>Each seller offers a standardized product.</p> Signup and view all the answers

    What is the relationship between price and quantity demanded according to the Law of Demand?

    <p>As price decreases, quantity demanded increases.</p> Signup and view all the answers

    What is the term for the sum of all the individual demands for a particular good or service?

    <p>Market demand</p> Signup and view all the answers

    What happens to the demand curve when there is a change in factors other than price?

    <p>The curve shifts.</p> Signup and view all the answers

    What is the term for goods that are used together and a fall in the price of one good raises the demand for the other?

    <p>Complements</p> Signup and view all the answers

    What is the term for goods that are used together and a fall in the price of one good reduces the demand for the other?

    <p>Substitutes</p> Signup and view all the answers

    What is the most obvious determinant of demand for a particular good?

    <p>Tastes</p> Signup and view all the answers

    Which of the following is NOT a determinant of quantity supplied?

    <p>Price</p> Signup and view all the answers

    Which one of the following is true regarding a shift in the supply curve?

    <p>It is called a change in supply.</p> Signup and view all the answers

    What happens to the quantity supplied when the price of ice cream rises?

    <p>It increases</p> Signup and view all the answers

    Which one of the following is true regarding a movement along a fixed supply curve?

    <p>It is called a change in quantity supplied.</p> Signup and view all the answers

    Which of the following is an example of a policy aimed at reducing the quantity of cigarettes demanded at any given price?

    <p>Mandatory health warnings on cigarette packages</p> Signup and view all the answers

    Which one of the following is true regarding a shift in the demand curve?

    <p>It is called a change in demand.</p> Signup and view all the answers

    How does an increase in input prices affect the supply of ice cream?

    <p>It decreases the supply</p> Signup and view all the answers

    Which one of the following is true regarding a movement along a fixed demand curve?

    <p>It is called a change in quantity demanded.</p> Signup and view all the answers

    What happens to the supply of ice cream when there is an advance in technology?

    <p>It increases</p> Signup and view all the answers

    What is equilibrium?

    <p>A situation where the price is at the level where quantity supplied equals quantity demanded.</p> Signup and view all the answers

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

    <p>Directly proportional</p> Signup and view all the answers

    What is equilibrium price?

    <p>The price that balances quantity supplied and quantity demanded.</p> Signup and view all the answers

    What is the difference between a movement along the supply curve and a shift of the supply curve?

    <p>A movement along the curve represents a change in price, while a shift represents a change in other factors</p> Signup and view all the answers

    What is equilibrium quantity?

    <p>The quantity supplied and the quantity demanded at the equilibrium price.</p> Signup and view all the answers

    What happens to the price when there is a surplus?

    <p>The price falls.</p> Signup and view all the answers

    What happens to the price when there is a shortage?

    <p>The price rises.</p> Signup and view all the answers

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