Economics Introduction Quiz Questions!

Explanation
Economics is not considered an exact science because it deals with human behavior, which is inherently complex and unpredictable. Unlike natural sciences such as physics or chemistry, economic theories cannot be tested in controlled laboratory conditions and often involve subjective interpretations. Economic models are based on assumptions and simplifications, making them prone to errors and uncertainties. Additionally, economic outcomes are influenced by various external factors such as politics, culture, and social dynamics, further complicating the predictability and precision of the science. Therefore, economics is considered a social science rather than an exact science.

Explanation
The Law of Demand states that as the price of a good or service increases, the demand for that product decreases. This is because as the price goes up, consumers are less willing or able to purchase the product, resulting in a decrease in demand. Conversely, if the price decreases, consumers are more likely to purchase the product, leading to an increase in demand. Therefore, the correct answer is "decreases."

Explanation
Peanut butter and jelly are considered complements because they are often consumed together. They enhance each other's taste and are commonly used as ingredients in sandwiches. When someone buys peanut butter, they are likely to also buy jelly to go with it. The demand for one product is directly related to the demand for the other, making them complements.

Explanation
When the price of a good decreases, it becomes more affordable and attractive to consumers. As a result, they are more likely to choose the good over its substitute, leading to a decrease in the demand for the substitute. This is because consumers perceive the good as a better option in terms of value for money. Therefore, the correct answer is that the demand for the substitute decreases when the price of a good decreases.

Explanation
An increase in the price of pizza will lead to a higher demand for hamburgers. This is because pizza and hamburgers are substitute goods, meaning that they can be used in place of each other. When the price of pizza increases, consumers will be more likely to choose hamburgers as a substitute, increasing the demand for hamburgers. As a result, the demand curve for hamburgers will shift to the right.

Explanation
The given answer, pizza and tacos, is an example of substitutes because both are popular food options that can fulfill a similar craving or desire for a savory, handheld meal. While they may have different flavors and ingredients, they both offer a similar experience of convenience and satisfaction. This makes them interchangeable options for someone who is looking for a quick and tasty meal.

Explanation
The visual display of a demand schedule on a graph is called a demand curve. A demand curve represents the relationship between the quantity demanded of a good or service and its price. It shows the quantity of the good or service that consumers are willing and able to purchase at different price levels. The demand curve typically slopes downwards, indicating that as the price of a good or service increases, the quantity demanded decreases, and vice versa. The shape and position of the demand curve can provide insights into consumer behavior and market dynamics.

Explanation
The demand curve illustrates the relationship between price and quantity demanded. It shows how the quantity of a good or service demanded by consumers changes as the price of that good or service changes. As the price increases, the quantity demanded decreases, and vice versa. The demand curve slopes downward to represent this inverse relationship between price and quantity demanded.

Explanation
An increase in a person's income level will cause that person's demand for normal goods to shift to the right. This is because as income increases, individuals have more purchasing power and can afford to buy more of the normal goods they desire. As a result, the demand curve for these goods will shift to the right, indicating a higher quantity demanded at each price level.

Explanation
The law of supply states that as the price of a good increases, the supply of that good also increases. This means that producers are willing to supply more of the good at higher prices, as it becomes more profitable for them to do so. The higher price incentivizes producers to allocate more resources and invest in the production of the good, leading to an increase in its supply in the market.