Economics Questions On Theory Of Demand 1

Economics Questions On Theory Of Demand 1; These questions are to help students prepare for examinations like JAMB, WAEC, NECO, GCE, and IJMB.

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Economics Questions On Theory Of Demand 1

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#1. What is demand?

a. The quantity of a good or service that producers are willing and able to sell

a. The quantity of a good or service that producers are willing and able to sell

b. The quantity of a good or service that consumers are willing and able to buy

b. The quantity of a good or service that consumers are willing and able to buy

c. The price of a good or service

c. The price of a good or service

d. The income of consumers

d. The income of consumers

#2. Which of the following is not a determinant of demand?

a. Price

a. Price

b. Income

b. Income

c. Taste and preference

c. Taste and preference

d. Price of related goods

d. Price of related goods

#3. What is the law of demand?

a. As the price of a good or service increases, the quantity demanded increases

a. As the price of a good or service increases, the quantity demanded increases

b. As the price of a good or service increases, the quantity demanded decreases

b. As the price of a good or service increases, the quantity demanded decreases

c. As the price of a good or service decreases, the quantity demanded increases

c. As the price of a good or service decreases, the quantity demanded increases

d. As the price of a good or service decreases, the quantity demanded decreases

d. As the price of a good or service decreases, the quantity demanded decreases

#4. What is a demand curve?

a. A graph showing the relationship between price and quantity demanded

a. A graph showing the relationship between price and quantity demanded

b. A graph showing the relationship between price and quantity supplied

b. A graph showing the relationship between price and quantity supplied

c. A graph showing the relationship between income and quantity demanded

c. A graph showing the relationship between income and quantity demanded

d. A graph showing the relationship between income and quantity supplied

d. A graph showing the relationship between income and quantity supplied

#5. What is the difference between a change in quantity demanded and a change in demand?

a. A change in quantity demanded is a movement along the demand curve, while a change in demand is a shift of the demand curve

a. A change in quantity demanded is a movement along the demand curve, while a change in demand is a shift of the demand curve

b. A change in quantity demanded is a shift of the demand curve, while a change in demand is a movement along the demand curve

b. A change in quantity demanded is a shift of the demand curve, while a change in demand is a movement along the demand curve

c. A change in quantity demanded and a change in demand are the same thing

c. A change in quantity demanded and a change in demand are the same thing

d. A change in quantity demanded and a change in demand are unrelated

d. A change in quantity demanded and a change in demand are unrelated

#6. Which of the following is not a type of demand?

a. Composite demand

a. Composite demand

b. Derived demand

b. Derived demand

c. Inferior demand

c. Inferior demand

d. Joint demand

d. Joint demand

#7. What is composite demand?

a. When a good is demanded for multiple purposes

a. When a good is demanded for multiple purposes

b. When a good is demanded as a complement to another good

b. When a good is demanded as a complement to another good

c. When a good is demanded as a substitute for another good

c. When a good is demanded as a substitute for another good

d. When a good is demanded as a luxury item

d. When a good is demanded as a luxury item

#8. What is derived demand?

a. When a good is demanded as a complement to another good

a. When a good is demanded as a complement to another good

b. When a good is demanded for multiple purposes

b. When a good is demanded for multiple purposes

c. When a good is demanded as a substitute for another good

c. When a good is demanded as a substitute for another good

d. When a good is demanded as a factor of production

d. When a good is demanded as a factor of production

#9. What is competitive demand?

a. When two goods are demanded as substitutes for each other

a. When two goods are demanded as substitutes for each other

b. When two goods are demanded as complements to each other

b. When two goods are demanded as complements to each other

c. When two goods are demanded for the same purpose

c. When two goods are demanded for the same purpose

d. When two goods are demanded for different purposes

d. When two goods are demanded for different purposes

#10. What is joint demand?

a. When two goods are demanded as substitutes for each other

a. When two goods are demanded as substitutes for each other

b. When two goods are demanded as complements to each other

b. When two goods are demanded as complements to each other

c. When two goods are demanded for the same purpose

c. When two goods are demanded for the same purpose

d. When two goods are demanded together as a single unit

d. When two goods are demanded together as a single unit

#11. What is price elasticity of demand?

a. The responsiveness of quantity demanded to a change in the price of a good

a. The responsiveness of quantity demanded to a change in the price of a good

b. The responsiveness of quantity demanded to a change in income

b. The responsiveness of quantity demanded to a change in income

c. The responsiveness of quantity demanded to a change in the price of a related good

c. The responsiveness of quantity demanded to a change in the price of a related good

d. The responsiveness of quantity supplied to a change in price

d. The responsiveness of quantity supplied to a change in price

#12. What is income elasticity of demand?

a. The responsiveness of quantity demanded to a change in the price of a good

a. The responsiveness of quantity demanded to a change in the price of a good

b. The responsiveness of quantity demanded to a change in income

b. The responsiveness of quantity demanded to a change in income

c. The responsiveness of quantity demanded to a change in the price of a related good

c. The responsiveness of quantity demanded to a change in the price of a related good

d. The responsiveness of quantity supplied to a change in income

d. The responsiveness of quantity supplied to a change in income

#13. What is the formula for price elasticity of demand?

a. % change in quantity demanded / % change in price

a. % change in quantity demanded / % change in price

b. % change in price / % change in quantity demanded

b. % change in price / % change in quantity demanded

c. % change in income / % change in quantity demanded

c. % change in income / % change in quantity demanded

d. % change in quantity supplied / % change in price

d. % change in quantity supplied / % change in price

#14. If the price elasticity of demand for a good is greater than 1, the demand for the good is:

a. Inelastic

a. Inelastic

b. Unit elastic

b. Unit elastic

c. Elastic

c. Elastic

d. Perfectly elastic

d. Perfectly elastic

#15. If the price elasticity of demand for a good is less than 1, the demand for the good is:

a. Inelastic

a. Inelastic

b. Unit elastic

b. Unit elastic

c. Elastic

c. Elastic

d. Perfectly elastic

d. Perfectly elastic

#16. If the price elasticity of demand for a good is equal to 1, the demand for the good is:

a. Inelastic

a. Inelastic

b. Unit elastic

b. Unit elastic

c. Elastic

c. Elastic

d. Perfectly elastic

d. Perfectly elastic

#17. What is the midpoint formula for calculating price elasticity of demand?

a. (Q2 - Q1) / (P2 - P1)

a. (Q2 - Q1) / (P2 - P1)

b. [(Q2 + Q1) / 2] / [(P2 + P1) / 2]

b. [(Q2 + Q1) / 2] / [(P2 + P1) / 2]

c. (P2 - P1) / (Q2 - Q1)

c. (P2 - P1) / (Q2 - Q1)

d. [(P2 + P1) / 2] / [(Q2 + Q1) / 2]

d. [(P2 + P1) / 2] / [(Q2 + Q1) / 2]

#18. What is cross elasticity of demand?

a. The responsiveness of quantity demanded to a change in the price of a related good

a. The responsiveness of quantity demanded to a change in the price of a related good

b. The responsiveness of quantity demanded to a change in income

b. The responsiveness of quantity demanded to a change in income

c. The responsiveness of quantity demanded to a change in the price of the good itself

c. The responsiveness of quantity demanded to a change in the price of the good itself

d. The responsiveness of quantity supplied to a change in the price of a related good

d. The responsiveness of quantity supplied to a change in the price of a related good

#19. If the cross elasticity of demand for two goods is positive, the goods are:

a. Complements

a. Complements

b. Substitutes

b. Substitutes

c. Normal goods

c. Normal goods

d. Inferior goods

d. Inferior goods

#20. If the cross elasticity of demand for two goods is negative, the goods are:

a. Complements

a. Complements

b. Substitutes

b. Substitutes

c. Normal goods

c. Normal goods

d. Inferior goods

d. Inferior goods

#21. What is income elasticity of demand for normal goods?

a. Positive

a. Positive

b. Negative

b. Negative

c. Zero

c. Zero

d. Varies depending on the good

d. Varies depending on the good

#22. What is income elasticity of demand for inferior goods?

a. Positive

a. Positive

b. Negative

b. Negative

c. Zero

c. Zero

d. Varies depending on the good

d. Varies depending on the good

#23. What is the relationship between the price elasticity of demand and total revenue?

a. If demand is elastic, an increase in price will increase total revenue

a. If demand is elastic, an increase in price will increase total revenue

b. If demand is elastic, an increase in price will decrease total revenue

b. If demand is elastic, an increase in price will decrease total revenue

c. If demand is inelastic, an increase in price will increase total revenue

c. If demand is inelastic, an increase in price will increase total revenue

d. If demand is inelastic, an increase in price will decrease total revenue

d. If demand is inelastic, an increase in price will decrease total revenue

#24. How is elasticity of demand important to producers?

a. It helps them determine the optimal price to charge for their product

a. It helps them determine the optimal price to charge for their product

b. It helps them determine the quantity of their product to produce

b. It helps them determine the quantity of their product to produce

c. It helps them determine the types of advertising to use

c. It helps them determine the types of advertising to use

d. It has no importance to producers

d. It has no importance to producers

#25. How is elasticity of demand important to governments? a. It helps them determine

the optimal price to charge for public goods and services

the optimal price to charge for public goods and services

b. It helps them determine the quantity of public goods and services to provide

b. It helps them determine the quantity of public goods and services to provide

c. It helps them determine the types of taxes to impose

c. It helps them determine the types of taxes to impose

d. All of the above

d. All of the above

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