Unit elastic demand occurs when:

Total Outlay is the same regardless of price change

'Ceteris paribus' means

All or other things being equal or held constant

Which is NOT a factor affecting Supply elasticity?

Whether the good is a luxury or a necessity

Relatively inelastic demand occurs when:

Price and Total Outlay move in same direction

The Law of Supply states that , ceteris paribus, ...

Price moves in the same direction as quantity supplied

What happens if price of substitute increases?

Demand curve of this good shifts to the right

The Law of Demand states that , ceteris paribus, ...

Price moves in the opposite direction as quantity demanded

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Topic 3 - Markets

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Questions 15

Answers

1
The slope of the demand curve goes
Downwards from left to right
Upwards from left to right
Downwards from right to left
Upwards from right to left
2
What happens if price of the goods increase?
Expansion in Demand
Contraction in Demand
Decrease in Demand
Increase in Demand
3
Unit elastic demand occurs when:
Total Outlay is equal to ZERO
Price and Total Outlay move in same direction
Price and Total Outlay move in opposite directions
Total Outlay is the same regardless of price change
4
The slope of the demand curve goes
Upwards from right to left
Downwards from left to right
Upwards from left to right
Downwards from right to left
5
'Ceteris paribus' means
Take a bus to Paris
All or other things vary
All or other things being equal or held constant
The other way around
6
Which is NOT a factor affecting Supply elasticity?
Ability to hold and store stock
The length of production processWhet
Whether the good is a luxury or a necessity
Excess capacity
7
What happens if there is a decrease in Demand?
A movement along the D curve to the right
D curve shifts to the left
A movement along the D curve to the left
D curve shifts to the right
8
Relatively inelastic demand occurs when:
Price and Total Outlay move in same direction
Total Outlay is the same regardless of price change
Price and Total Outlay move in opposite directions
Total Outlay is equal to ZERO
9
Which is NOT a factor affecting Demand elasticity?
The length of time subsequent to a price change
Whether the good is habit forming or not
Whether the good has any close substitutes
Excess capacity
10
Which type of elasticity show STRONG response to a change in price?
Unit elastic
Relatively inelastic
Relatively elastic
Non of the above
11
What happens if price of the goods increase?
Increase in Supply
Contraction in Supply
Expansion in Supply
Decrease in Supply
12
The Law of Supply states that , ceteris paribus, ...
Price moves in the opposite direction as quantity demanded
Price moves in the opposite direction as quantity supplied
Price moves in the same direction as quantity demanded
Price moves in the same direction as quantity supplied
13
What happens if price of the good is expected to increase in the future?
S curve shifts to the right
Supply decreases
Contraction in the S curve for this good
Expansion in the S curve for this good
14
What happens if price of substitute increases?
Demand curve of this good shifts to the right
Expansion in the D curve for this good
Contraction in the D curve for this good
Demand for this good decreases
15
The Law of Demand states that , ceteris paribus, ...
Price moves in the same direction as quantity demanded
Price moves in the opposite direction as quantity supplied
Price moves in the opposite direction as quantity demanded
Price moves in the same direction as quantity supplied

Topic 3 - Markets Flashcards | StudBud