Demand and supply

Normally the demand curve will have a _______________ shape.

• Upward sloping

• Downward sloping

• Vertical

• Horizontal

Which of the following is an assumption made while drawing the demand curve?

• The demand curve must be a straight line

• The price of substitutes should not change

• The quantity demanded should not change

• The price of the commodity should not change

Law of demand shows a relation between the ____

• Quantity demand and quantity supply of a commodity

• Income and quantity demand of a commodity

• Price and quantity of a commodity

• Income and price of a commodity

Which of the following is not a cause of the shift in demand for a product?

• Change in the price of substitutes

• Change in the income of a consumer

• Change in the price of a product

• None of the above

Would an increase in demand for a product cause the supply curve to shift in any direction?

• No effect on supply

• Change in the slope of a supply curve

• The supply curve will move to the right

• The supply curve will move to the left

In a particular year, the farmers experienced dry weather. If all other factors remain the same, the supply curve of wheat for farmers will shift to the ________ direction.

• Downward

• Rightward

• Leftward

• None of the above

If the market supply curve for a product shifts rightwards, what is the best possible explanation for this shift?

• Increase in the price of raw materials

• Introduction of a tax on that product by the government

• Introduction of a new technique that makes the production of that commodity cheaper

• An advertising campaign that is successful in promoting the product

Which of the following scenarios will not shift the demand curve for a particular product?

• A change in the income of the consumers of that product

• Effective advertising campaign by producers of a substitute good

• A reduction in the price of the raw material for that product

• A widely publicised study that says the product is harmful to the health of consumers

A firm’s supply curve is on an upward slope because ______.

• The production costs of additional units of output will rise

• Consumers see a positive relationship between price and quality

• Expansion of production leads to the use of inferior inputs

• None of the above

Which of the following scenarios will not lead to a change in demand for a product?

• A change in the tastes of its consumers

• A change in the price of that product

• An increase in the income of its consumers

• None of the above