CONCEPTS OF DEMAND AND SUPPLY

Question 1

In economic terms, what do we mean by ‘Intermediate Goods’?

Answer 1

Goods sold between industries for resale or production of others

Question 2

The demand for a commodity or service which is a consequence of the demand for something else is called ______

Answer 2

Derived Demand

Question 3

What effect will a decrease in demand and an increase in supply have on equilibrium price?

Answer 3

Equilibrium price will fall

Question 4

What would happen to the demand curve when there is an increase in the price of substitute products?

Answer 4

Outward shift

Question 5

______ is a type of good for which demand increases as its price rises.

Answer 5

Giffen Good
A Giffen good is a product that people consume more of as the price rises and vice versa—violating the basic law of demand in microeconomics. For ex Iphone as it shows the standard of living.

Question 6

For economists, ______ refers to the amount of a product or service that people are both willing and able to buy.

Answer 6

Demand

Question 7

What is the change in total utility due to consumption of one additional unit of an item called ?

Answer 7

Marginal Utility
Marginal Utility is the additional Satisfaction that a customer gets for an additional unit of consumption or additional unit of service.

Question 8

As per the law of demand, if all other commodities remain the same, then the relation between the demand and price of a commodity is

Answer 8

Negative

Question 9

What kind of relationship exists between income and demand in case of normal goods?

Answer 9

There is a direct relationship