Question : A demand curve will not shift:
Option 1: when only income changes
Option 2: when only the price of the substitute product change
Option 3: when there is a change in advertisement expenditure
Option 4: when only the price of the commodity change
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Correct Answer: when only the price of the commodity change
Solution : The correct answer is when only the price of the commodity change.
If the price of the product changes, the demand curve will not vary. When a good's price changes, it creates a movement along the demand curve rather than a shift in the curve. Any additional factor will cause the demand curve to move to the left or right. For instance, if consumer income rises, buyers will be able to purchase more things, shifting the demand curve to the right. When the price of an alternative item falls, individuals are more inclined to purchase it, shifting the demand curve to the left.
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Question : Law of Demand states that there is a negative relationship between ______.
Option 1: demand for a commodity and its supply
Option 2: demand for a commodity and its price
Option 3: tax on a commodity and its price
Option 4: supply of a commodity and its price
Question : Other things being equal, a decrease in the quantity demanded of a commodity can be caused by:
Option 1: a rise in the price of the commodity.
Option 2: a rise in the income of the consumer.
Option 3: a fall in the price of a commodity.
Option 4: a fall in the income of the consumer.
Question : Cross-demand expresses the functional relationship between
Option 1: demand and price of related commodities
Option 2: demand and income
Option 3: demand and price
Option 4: demand and supply
Question : The elasticity of demand for price is:
Option 1: Elasticity = Percentage change in demand/Percentage change in time
Option 2: Elasticity = Percentage change in price/Percentage change in demand
Option 3: Elasticity = Percentage change in demand/Percentage change in supply
Option 4: Elasticity = Percentage change in supply/Percentage change in price
Question : For an inferior good , demand falls when
Option 1: Price rises .
Option 2: Income rises.
Option 3: Price fall.
Option 4: Income fall.
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