Understanding Demand and Supply

What is the definition of demand?

• The amount producers are willing to sell

• The desire and ability of consumers to buy goods at different prices

• The total goods available in a market

• The cost of producing goods

According to the law of demand, when price falls...

• Quantity demanded falls

• Quantity demanded rises

• Demand shifts left

• Demand stays the same

On a demand curve, which axis shows price?

• X-axis

• Y-axis

• Both axes

• Neither

Which factor would shift the demand curve for pizza to the right?

• Increase in the price of pasta (a substitute)

• Decrease in population

• Fall in consumer income

• Higher production costs

If incomes rise, what usually happens to demand for luxury goods?

• Decreases

• Increases

• Stays the same

• Disappears

A movement along the demand curve is caused by:

• Change in price

• Change in income

• Change in tastes

• Change in population

Which of these best describes a demand curve?

• Upward sloping

• Downward sloping

• Flat horizontal line

• Vertical line

Which of the following is an example of a demand shifter?

• Weather conditions

• Cost of raw materials

• Subsidies for producers

• Changes in technology

If the price of mobile phones increases, what happens to the quantity demanded?

• Increases

• Decreases

• Stays the same

• Shifts to the right

Which of these examples shows a shift in demand rather than a movement?

• Price of ice cream rises from 1 KD to 2 KD

• Population in Kuwait increases

• Price of burgers falls

• Price of a phone decreases