PE 1.1

What does demand refer to?

• a) The quantity of a product or service produced

• b) The quantity of a product or service desired by buyers

• c) The quantity of a product or service available in the market

• d) The quantity of a product or service consumed by buyers

What is the relationship between price and quantity demanded known as?

• a) Supply curve

• b) Demand curve

• c) Demand relationship

• d) Market equilibrium

How is the quantity demanded affected by price changes?

• a) Quantity demanded remains constant regardless of price changes

• b) Quantity demanded decreases as price increases

• c) Quantity demanded increases as price increases

• d) Quantity demanded is inversely related to price changes

What does the law of demand state?

• a) As the price of a good increases, the demand for that good also increases.

• b) As the price of a good increases, the demand for that good decreases.

• c) As the price of a good decreases, the demand for that good also decreases.

• d) As the price of a good decreases, the demand for that good increases.

According to the law of demand, what happens to demand when the price of a good is higher and all other factors remain equal?

• a) It remains constant.

• b) It increases.

• c) It decreases.

• d) It fluctuates randomly.

How does the law of demand relate price and demand?

• a) Higher prices lead to higher demand.

• b) Lower prices lead to lower demand.

• c) Higher prices lead to lower demand.

• d) Lower prices lead to higher demand.

How is the basic demand relationship typically represented?

• a) Through a vertical line on a graph

• b) Through a horizontal line on a graph

• c) Through a curve with a positive slope

• d) Through a curve with a negative slope

Which of the following is NOT a factor that influences demand?

• a) Price of the product

• b) Income of the consumers

• c) Tastes & preferences of the consumers

• d) Cost of production

What does supply represent in economics?

• a) The demand for a product

• b) The willingness of consumers to purchase goods

• c) How much the market can offer

• d) The quantity of goods demanded by producers

Which term refers to the amount of a certain good that producers are willing to supply at a given price?

• a) Demand

• b) Quantity demanded

• c) Supply

• d) Quantity supplied