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Economics: Understanding Markets and Demand

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Economics: Understanding Markets and Demand

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Questions and Answers

What is the primary function of a market?

To distribute goods and services
To produce goods and services
To bring together buyers and sellers (correct)
To regulate business activities

Which of the following types of markets is characterized by online transactions?

Online or virtual market (correct)
Local market
National market
Goods market

What is the difference between needs and wants?

Needs are desires, while wants are necessities
Needs are material, while wants are immaterial
Needs are necessities, while wants are desires (correct)
Needs are short-term, while wants are long-term

What is the law of demand?

Other things remaining same, when the price of a product increases, its quantity demanded decreases (C) Signup and view all the answers

What is the purpose of a demand table or schedule?

To show the relationship between price and quantity demanded (B) Signup and view all the answers

What is the term 'ceteris paribus' used to assume in economics?

That other things remain the same (D) Signup and view all the answers

What is the shape of the demand curve 'D'?

Downward sloping (B) Signup and view all the answers

What is an assumption of the Law of Demand?

No change in prices of related goods (D) Signup and view all the answers

Which of the following is an exception to the Law of Demand?

All of the above (D) Signup and view all the answers

What is the practical importance of the Law of Demand in price determination?

To analyze the impact of change in prices on quantity demanded (D) Signup and view all the answers

How does the Law of Demand help the finance minister?

In raising tax on certain commodities (A) Signup and view all the answers

What is the result of an increase in income on the demand of a product?

Demand increases (C) Signup and view all the answers