The demand for coffee and tea is
Joint
Competitive
Composite
Derived
Correct answer is B
Competitive demand exists where a number of substitutes exist and one good can be purchased instead of another good. Tea and coffee are substitute goods, a consumer can either decide to consume tea or coffee. A fall or rise in the price of either of the two goods will lead to a fall or rise in the demand for its substitute.
If less of a good is bought as one's income increases, such a good is
A normal good
A luxury
A necessity
An inferior good
Correct answer is D
An inferior good is one whose demand drops when people's incomes rise.
If the demand function is Qd = -0.5 + 20, calculate the quantity demanded when price is $15.0
-%27.50
-%12.50
$12.50
-$27.50
Correct answer is C
When price is 15.0, quantity demanded =
Qd = -0.5(15.0)+ 20
Qd = -7.5 + 20 = $12.5
If the coefficient of price elasticity of demand of a product is zero, then its demand curve will be
Parallel to the quantity axis
Parallel to the price axis
Negatively sloped
Positively sloped
Correct answer is B
When the coefficient of price elasticity of demand is equal to zero, it means demand is perfectly inelastic. This means that demand for a good does not change in response to price.
The desire for profits is a major feature of
Traditional economy
Mixed economy
Market economy
Command economy
Correct answer is C
A market economy is an economic system in which the forces of demand and supply determine major economic decisions and the prices of goods and services
In this type of system, there is no central planning authority that determines what should be produced, but rather, private individuals and businesses are in charge of productive resources. Now we all know, private businesses are in business for the main purpose of making profits. A market economy is characterized by business owners who go into business for the sole aim of making profits.