Shifts And Movements

Question 1

What is the law of demand?

Answer 1

As the price of a good increases, the quantity demanded decreases, and vice versa.

Question 2

True or False: A movement along the demand curve occurs when there is a change in price.

Answer 2

True

Question 3

Fill in the blank: A shift in the supply curve to the right indicates a __________ in supply.

Answer 3

decrease

Question 4

What factors can cause a shift in the demand curve?

Answer 4

Consumer preferences, income levels, prices of related goods, and expectations.

Question 5

Multiple Choice: Which of the following would likely cause a leftward shift in the supply curve? A) Increase in production costs B) Technological advancements C) Increase in consumer income D) Decrease in taxes

Answer 5

A) Increase in production costs

Question 6

What does the term ‘equilibrium price’ refer to?

Answer 6

The price at which the quantity of a good demanded equals the quantity supplied.

Question 7

True or False: An increase in demand, with supply unchanged, leads to a higher equilibrium price.

Answer 7

True

Question 8

Fill in the blank: A decrease in demand will lead to a __________ in equilibrium price.

Answer 8

decrease

Question 9

What is the effect of a subsidy on supply?

Answer 9

It typically causes the supply curve to shift to the right.

Question 10

Multiple Choice: Which of the following represents a movement along the demand curve? A) A change in consumer income B) A change in the price of the good C) A change in consumer preferences D) A change in the number of suppliers

Answer 10

B) A change in the price of the good