Test Your Knowledge Of Microeconomics With This Quiz!

Quantity demanded refers to the amount of a good or service that consumers are willing and able to purchase at a specific price. It represents the consumer's intention or plan to buy a certain quantity of a product at a particular price point. It is influenced by factors such as price, income, preferences, and the availability and closeness of known substitutes.

The given answer is correct because an increase in demand causes the entire demand curve to shift to the right. This means that at every price level, the quantity demanded will be higher compared to the previous demand curve. This shift occurs because factors such as consumer preferences, income levels, or population increase, leading to a greater desire for the product or service. As a result, the negative relationship between price and quantity demanded remains constant, but the overall demand increases.

An inferior good is a type of good where consumers demand less of it when their income rises. This means that as people's income increases, they are likely to switch to higher-quality or more expensive alternatives, causing a decrease in demand for the inferior good. This behavior is in contrast to normal goods, where demand increases as income rises.

Elasticity refers to the responsiveness of quantity demanded or supplied to changes in price or income. It measures the percentage change in quantity demanded or supplied in response to a percentage change in price or income. Therefore, the answer "Responsiveness" accurately describes elasticity as it highlights the concept of how quantity demanded or supplied reacts to changes in price.

The correct answer is "Law of demand". The law of demand states that there is an inverse relationship between the price of a good or service and the quantity demanded, assuming all other factors remain constant. This means that as the price of a product increases, the quantity demanded of that product decreases, and vice versa. This principle is a fundamental concept in economics and helps explain consumer behavior in the market.

Economics encompasses more than just money and profit, business and finance, or competitive behaviors. It also recognizes the significance of generosity, public spirit, and other virtues. Additionally, economics studies various choices made by individuals and societies, as well as the unintended consequences or side effects that may arise from these choices. Therefore, the correct answer is "all of the above."

The correct answer is "Illustrates the alternative amounts of a good supplied at alternative prices." The supply curve shows the relationship between the price of a good and the quantity of that good that producers are willing and able to supply. It illustrates how the quantity supplied changes as the price changes, holding all other factors constant. As the price of a good increases, producers are generally willing to supply more of it, and as the price decreases, they are willing to supply less. This relationship is shown by the upward-sloping supply curve.

The term "quantity demanded" refers to the specific amount of a product or service that consumers are willing and able to purchase at a given price. It represents a point on the demand curve, indicating the quantity of a good or service that buyers are willing to buy at a specific price level. This concept is different from "demand," which refers to the entire relationship between price and quantity demanded. The answer choice "quantity demanded" accurately describes the specific amount at a specific price, distinguishing it from the other options.

Elasticity refers to the responsiveness of demand or supply to changes in price or other factors. In this case, the correct answer is "all of the above" because elasticity is influenced by time, the availability and closeness of known substitutes, and the proportion of one's budget spent on a good. Time is important because elasticity may change over time as consumers or producers adjust their behavior. The availability and closeness of substitutes affect elasticity because if there are many close substitutes, consumers can easily switch to alternatives, making demand more elastic. Lastly, the proportion of one's budget spent on a good matters because if a good represents a significant portion of a person's budget, they are likely to be more sensitive to price changes, resulting in higher elasticity.

The statement is correct because elasticity refers to the responsiveness of quantity demanded to changes in price. If demand is completely inelastic, it means that quantity demanded does not change at all in response to price changes. However, this is unlikely to be the case over the entire range of possible prices. At very high prices, demand is likely to be more elastic as consumers may be more willing to substitute the product with alternatives or reduce their consumption. Similarly, at very low prices, demand may also be more elastic as consumers may be more willing to purchase the product. Therefore, there is no such thing as a completely inelastic demand over the entire range of possible prices.

The formula % change in Q divided by % change in P is used to calculate the price elasticity of demand. Price elasticity of demand measures the responsiveness of quantity demanded to a change in price. It indicates how much the quantity demanded changes in response to a change in price. A higher price elasticity of demand indicates a more sensitive response in quantity demanded to price changes, while a lower price elasticity of demand indicates a less sensitive response.

The correct answer is "Only actions have costs; all costs are costs to someone; all costs lie in the future." This statement suggests that costs are incurred as a result of actions taken, and that all costs are borne by someone. Additionally, it emphasizes that costs are future-oriented, meaning they are anticipated and planned for in advance.

The correct answer is "Both A and B but not C." This means that the theory of economics does not furnish a body of settled conclusions immediately applicable to policy, and it is also a method rather than a doctrine. It is an apparatus of mind, a technique of thinking that helps its possessor to draw correct conclusions. However, it does not include the alternative amounts of a good supplied at alternative prices, which is option C.

The given correct answer is "Demand". Demand refers to the quantity of a product or service that consumers are willing and able to purchase at a given price and time. It is an essential concept in economics that helps determine the market equilibrium and price levels. Understanding demand is crucial for businesses to make informed decisions regarding production, pricing, and marketing strategies.

Price Elasticity of supply is the correct answer because it is a measure of the responsiveness of the quantity supplied to a change in price. It calculates the percentage change in quantity supplied divided by the percentage change in price. This measure helps to determine how sensitive the supply of a product is to changes in its price.