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Questions and Answers
Which of the following factors can lead to a simultaneous shift in supply and demand?
Which of the following factors can lead to a simultaneous shift in supply and demand?
- A recession affecting both buyers and sellers. (correct)
- Decrease in income for normal goods.
- Increase in the price of substitutes.
- Complementary goods becoming more affordable.
What happens when supply and demand both increase or decrease?
What happens when supply and demand both increase or decrease?
- Price remains constant but quantity traded decreases.
- Price decreases but quantity traded increases.
- Only price increases, while quantity traded remains constant.
- Price and quantity traded both increase. (correct)
Which type of goods see a decrease in demand as income rises?
Which type of goods see a decrease in demand as income rises?
- Inferior goods. (correct)
- Complementary goods.
- Normal goods.
- Substitute goods.
What is the outcome when supply increases but demand decreases?
What is the outcome when supply increases but demand decreases?
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What is one of the determinants of price elasticity of demand mentioned in the text?
What is one of the determinants of price elasticity of demand mentioned in the text?
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How does the budget share affect the incentive to look for substitutes when the price of an item rises?
How does the budget share affect the incentive to look for substitutes when the price of an item rises?
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Which concept represents the percentage change in quantity demanded in response to a 1 percent change in income?
Which concept represents the percentage change in quantity demanded in response to a 1 percent change in income?
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