Which of the following is not a determinant of demand?
a) the price of a resource that is used to produce the good.
b) the price of a complementary good.
c) the price of the good next month.
d) the price of a substitute good.
The Correct Answer Is:
- a) the price of a resource that is used to produce the good.
In general, the law of demand states that as the price of a good increases, the quantity demanded of the good decreases. However, there are some cases in which an increase in the price of a resource used to produce a good does not lead to a decrease in demand for that good. This is because the price of the resource is not a determinant of demand.
One example of this is when the resource is used to produce a necessity. In this case, even if the price of the resource increases, people will still need to purchase the good, and so demand will not decrease. Another example is when there are no close substitutes for the resource. This means that even if the price of the resource increases, people will still need to use it to produce the good, and so demand will not decrease.
Which of the following is not a determinant of the price elasticity of demand for a good?
a. The time frame-whether it is in the short run or long run.
b. The number of substitute goods available.
c. The share of a consumer’s budget.
d. The amount of income the consumer has.
The amount of income the consumer has is not a determinant of the price elasticity of demand for a good. Income is not always the best determinant of how much people are willing to spend on a good. There are other factors that play into demand, such as perceived value and disposable income. Perceived value is the worth that an individual places on a product or service. This can be based on a number of things, such as quality, brand, or utility. Something that is perceived as being of high quality will usually have a higher demand than something of lower quality, all else being equal.
Disposable income is the money that someone has available to spend after taxes and other mandatory deductions have been taken out of their paycheck. This is what someone has left over to use at their discretion and can vary greatly from person to person. So while income may be one factor in determining demand, it is not always the most important one.
Which of the following is not a determinant of the demand for a particular good?
A) The prices of related goods.
D) The prices of the inputs used to produce the good.
E) All of the above are determinants of the demand.
Which of the following will not cause the demand for product k to change?
a. A change in the price of close-substitute product J,
b. An increase in consumer incomes,
c. A change in the price of K,
d. A change in consumer tastes.
Two goods are substitutes when a decrease in the price of one good
a. decreases the demand for the other good.
b. decreases the quantity demanded of the other good.
c. increases the demand for the other good.
d. increases the quantity demanded of the other good.
When two goods are substitutes, a decrease in the price of one good will decrease the demand for the other good. This is because consumers will purchase the cheapergood instead of the more expensive good. For example, if the price of apples decreases, then the demand for oranges will decrease as well because consumers will purchase apples instead of oranges.
Which of the following statements is true about price/nonprice competition?
To engage in nonprice competition, a company must be able to differentiate its products from competitors’ products on quality and features.
In order to engage in nonprice competition, a company must differentiate its products from competitors’ products on quality and features. This can be done in a number of ways, such as by offering a higher quality product, or by offering unique features that are not available on competitor’s products. By doing this, a company can make its products more attractive to consumers, and thus increase sales.
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