Quiz  /  Law of Demand Gate & PSU MCQ Questions With Answers

  • 1. 
    What could cause the shift shown in the graph?

  • an increase in the number of buyer of a good
  • people don't like good X as much as they did before
  • the increase to a complement good related to good X
  • an increase of good X if its an inferior good

  • 2. 
    Owen saw that the price of peaches had gone down, and so he decided to buy more peaches.Based on this information only, what does Owen's reaction reflect?

  • Owen's demand for peaches has increased.
  • Owen has experienced an increase in income.
  • Owen's quantity demanded for peaches has increased.
  • Owen observed that there has been an increase in the price of other fruit, a substitute for peaches.

  • 3. 
    If income increases, what best describes normal goods?

  • at any price there will be an increase to demand
  • only at low prices there will be an increase to demand
  • only at higher prices there will be an increase to demand
  • there will be no change

  • 4. 
    Which best described the quantity of demand

  • this occurs when price changes
  • its the movement of the entire curve
  • this is the movement along a curve
  • occurs when the cost of inputs to products decrease

  • 5. 
    The government of a small town is concerned about the litter created when people leave styrofoam cups used to serve large beverages on the ground. The government decides to tax these by implementing a $1 tax on these drinks.What is the most likely purpose of this tax?

  • Reward sellers of this good
  • Reduce the number of beverages sold in styrofoam cups
  • Raise tax revenue for a new park
  • Increase the demand for these drinks

  • 6. 
    Which of the two following movements in this graph would represent an increase in quantity demanded but not a change in demand?

  • from point U to point T
  • from point S to point U
  • from point R to point U
  • from point S to point T

  • 7. 
    What is the best way to describe the change in demand?

  • the movement of the entire curve
  • the movement along the curve
  • occurs when the price of inputs to products decreases
  • occurs when price changes

  • 8. 
    A government is concerned about whether young children in a community are receiving enough healthcare.Which of the following is the LEAST likely to increase the amount of healthcare that people provide their children?

  • subsidize healthcare
  • provide coupons for free health care
  • increase the price of healthcare
  • reduce the distance traveled for healthcare

  • 9. 
    All of the following will result in a shift in a demand curve except:

  • A change in the income of buyers
  • A change in the supply of a goo
  • A change in expected future prices
  • A change in the price of related goods

  • 10. 
    Pam considers t-shirts and gym classes to be complementary goods.How will Pam react if the price of gym classes increase?

  • Her quantity demanded of gym classes will increase, and her demand for t-shirts will increase.
  • Her quantity demanded of gym classes will increase, and her demand for t-shirts will decrease.
  • Her quantity demanded of gym classes will decrease, and her demand for t-shirts will be unaffected.
  • Her quantity demanded of gym classes will decrease, and her demand for t-shirts will decrease.

  • 11. 
    What happens to the demand curve when people expect the future price to lower and people wait to buy?

  • it stays the same
  • it shifts right
  • it shifts left
  • it moves up

  • 12. 
    As a result of an increase in consumer incomes, the demand for ebooks has decreased.Based on this information, what can we definitely say about what type of good a ebook is?

  • an inferior good
  • a normal good
  • a substitute good
  • a complement good

  • 13. 
    Penny thinks the price of books will decrease next week If everything else is equal, which of the following would reflect how Penny's behavior will change in response to her expectations?

  • Penny's demand for books today will decrease
  • Penny's demand for books today will increase
  • Penny will demand more complimentary goods to books
  • penny will move to a lower quantity along her demand curve

  • 14. 
    Which best describes the law of demand?

  • sellers set the price that demanders pay
  • when the price decreases the quantity demanded increases
  • demand deceases for a normal good when income increases
  • legal authorities regulate price

  • 15. 
    If income increases, what will happen to the demand curve for an inferior good?

  • shift to the left
  • shift to the right
  • stay the same
  • move down

  • 16. 
    What type of good can be summed up with the following statement: If you had an increase in income you would not own this car.

  • inferior good
  • complement good
  • substitute good
  • normal good

  • 17. 
    Economists have observed that when average incomes increase, purchases of fast food tends to decline.Based on this information, what can we definitely say about fast food?

  • Fast food has no substitutes
  • Demand for fast food is upward sloping
  • The price of a complement to fast food has risen
  • Fast food is an inferior good

  • 18. 
    Which of the following changes could this graph represent?

  • People do not like hats as much as they did before, so their demand has decreased
  • People do not like hats as much as they did before, resulting in an increase in the quantity demanded for hats
  • People like hats more than they did before, and their demand for hats has increased
  • There has been a decrease in the price of hats, resulting in an increase in the quantity demanded for hats

  • 19. 
    What happens to the demand curve when people expect future prices to increase and people buy now rather than later?

  • it stays the same
  • shifts to the left
  • shift to the right
  • moves up

  • 20. 
    As a result of an increase in consumer incomes, the demand from Meeps decreased.

  • its an inferior good
  • its a normal good
  • its a substitute good
  • its a complement good
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