If the price of commodity X rises and consumers shift to commodity Y, then commodity X and Y are?
Substitutes
Complements
Inferior goods
Bought goods
Correct answer is A
Substitute goods or substitutes are at least two products that could be used for the same purpose by the same consumers. If the price of one of the products rises or falls, then demand for the substitute goods or substitute good (if there is just one other) is likely to increase or decline. Substitute goods or substitutes are at least two products that could be used for the same purpose by the same consumers. If the price of one of the products rises or falls, then demand for the substitutes goods or substitute good (if there is just one other) is likely to increase or decline.
A downward sloping demand curve means that?
Total revenue declines as price is lowered
Demand falls as output rises
Demand falls as output falls
Price must be lowered to sell more
Correct answer is B
Downward sloping demand curve means a rational consumer will demand more of a commodity when its price falls. Some of the reasons for.the phenomenon would be: Income Effect : When price of a commodity falls, consumer's real income rises that is he can now purchase more of the commodity with the same income.
Producers operating in a free market economy are more efficient as a resulf of?
The existence of competition
The very few number of participants
The commitment of the shareholders
Government regulation of their activities
Correct answer is A
Competition leads to efficiency because businesses that have fewer costs are more competitive and make more money. Innovation is encouraged because it provides a competitive edge and increases the chance for wealth.
The organisation of productive factors is the reponsibility of the?
Management
Entrepreneur
Production manager
Labour union
Correct answer is B
Entrepreneur is a person who sets up a business or businesses, taking on financial risks in the hope of profit. “one who organizes, manages, and assumes the risks of a business or enterprise and manages the various production factors.
Which of the following is not emphasized in a production possibility curve?
Scarcity of resources
Economic development
Inefficiency in the use of resources
Unemployment of labour
Correct answer is B
In short, production possibility curve is a curve which shows all possible combinations of two goods that can be produced by making full use of given resources and technology in an economy.
A production possibility curve measures the maximum output of two goods using a fixed amount of input. The input is any combination of the four factors of production . ... Each point on the curve shows how much of each good will be produced when resources shift from making more of one good and less of the other.