25 Questions
What concept measures the responsiveness of quantity demanded to a change in price?
Elasticity of Demand
What does the Law of Diminishing Marginal Utility state?
As consumption increases, the additional satisfaction decreases.
What does macroeconomics focus on?
Determinants of Demand
Which assumption is made in relation to the Law of Diminishing Marginal Utility?
Consumers always make rational decisions.
Which of the following is an example of a microeconomic concept?
Determinants of Demand
What is an exception to the Law of Diminishing Marginal Utility?
Consuming water when extremely thirsty.
What is the main focus of the study of microeconomics?
Determinants of Demand
How does understanding Elasticity of Demand help businesses?
By adjusting production levels based on consumer response.
Which level of economic analysis includes studying national income and output?
Macroeconomics
What type of economics deals with individual choices and market behavior?
Microeconomics
What is the focus of Micro Economics?
Individual economic units
Which of the following is NOT a type of Monopoly?
Oligopoly
What is the significance of studying Micro Economics?
Allocating scarce resources efficiently
Which statement best describes the features of Micro Economics?
Examines individual economic units
Which type of Monopoly results from ownership or control of a key resource?
Natural Monopoly
What does the Law of Supply describe?
The relationship between price and quantity supplied.
According to the Law of Supply, what happens to the quantity supplied as price decreases?
It decreases.
What is one of the assumptions of the Law of Supply?
Constant consumer preferences.
Which of the following is an exception to the Law of Supply?
Supply decreases when production costs increase.
How does the Law of Supply relate to producer behavior?
It influences how producers adjust their output in response to price changes.
Which concept helps in understanding how demand changes with respect to price changes?
Price Elasticity of Demand
What does Price Elasticity of Demand indicate when it is greater than 1?
Elastic demand
What does an Income Elasticity of Demand of 0 suggest?
Inferior good
Which concept measures the responsiveness of quantity demanded for one good due to a change in the price of another good?
Cross Elasticity of Demand
How does the concept of Price Elasticity of Demand help businesses make pricing decisions?
By evaluating the impact of changes in price on sales volume
Learn about the different types of price elasticity of demand and understand the concept of variation and change in demand through diagrams.
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