Foundation Economics Chap 2 - Part 15

With an increase in the price of diamond, the quantity demanded also increases. This is because it is a:<br />

• substitue good
• comlementary good
• conspicuous good
• none of the above

An example of a good that exhibit direct price-demand relationship is<br />

• Giffen goods.
• Complementary goods.<br />
• Substitute goods.
• None of the above.

In Economics, when demand for a commodity increases with a fall in its price it is known as:<br />

• contraction of demand
• expansion of demand.<br />
• no change in demand
• none of the above.

The quantity supplied of a good or service is the amount that<br /><br />

• is actually bought during a given time period at a given price.<br />
• producers wish they could sell at a higher price.<br />
• producers plan to sell during a given time period at a given price.<br />
• people are willing to buy during a given time period at a given price.

Supply is the<br /><br />

• limited resources that are available with the seller.<br />
• cost of producing a good.<br />
• entire relationship between the quantity supplied and the price of good.<br />
• Willingness to produce a good if the technology to produce it becomes available.

In the book market, the supply of books will decrease if any of the following occurs except<br />

• a decrease in the number of book publishers.<br />
• a decrease in the price of the book.<br />
• an increase in the future expected price of the book.<br />
• an increase in the price of paper used.

If price of computers increases by 10% and supply increases by 25%. The elasticity of supply is :

• 2.5
• 0.4
• (-) 2.5
• (-) 0.4

An increase in the number of sellers of bikes will increase the<br /><br />

• the price of a bike.
• demand for bikes.<br />
• the supply of bikes.
• demand for helmets.

If the supply of bottled water decreases, other things remaining the same, the equilibrium price<br />——————————— and the equilibrium quantity —————————————<br />

• increases; decreases
• decreases; increases.<br />
• decreases; decreases.
• increases; increases.

A decrease in the demand for cameras, other things remaining the same will.<br />

• increase the number of cameras bought.<br />
• decrease the price but increase the number of cameras bought.<br />
• increase the price of cameras.<br />
• decrease the price and decrease in the number of cameras bought.