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5-question demo · Chhattisgarh CGMFPFED - Economics

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Question 1 of 5
An increase in the price of a product will reduce the amount of it purchased because:
A supply curves are upsloping.
B the higher price means that real incomes have risen.
C consumers will substitute other products for the one whose price has risen.
D consumers substitute relatively high-priced for relatively low-priced products.
Why: When the price of a product increases, consumers substitute other products for the one whose price has risen due to the substitution effect in the law of demand. This movement along the demand curve reduces quantity demanded. Supply curves being upsloping (A) explains supply, not demand. Higher price reduces real income (B), but substitution is the primary reason. Option D is incorrect as consumers move to lower-priced substitutes.
Question 2 of 5
Which of the following would not shift the demand curve for beef?
A a widely publicized study which indicates beef increases one's cholesterol.
B an increase in the price of beef.
C an increase in the price of pork.
D a change in consumer incomes.
Why: A change in the price of beef causes a movement along the demand curve, not a shift. Shifts occur due to non-price factors: consumer incomes, tastes (cholesterol study A), prices of related goods (pork C). Option B is correct as it does not shift the curve.
Question 3 of 5
When supply falls, what happens to quantity demanded in equilibrium?
A Quantity demanded increases
B Quantity demanded decreases
C A change in supply has no effect on quantity demanded
D Equilibrium quantity increases
Why: A fall in supply shifts the supply curve left, raising equilibrium price and lowering equilibrium quantity. Quantity demanded adjusts via movement along the demand curve due to higher price, but the question focuses on terminology: supply change affects quantity supplied and equilibrium, not directly quantity demanded (which responds to price). No direct shift in demand.
Question 4 of 5
Assume that sofas and arm chairs are substitute goods. Refer to the diagram below for the demand curve for sofas. What would cause the demand curve to shift right?
A Decrease in price of sofas
B Increase in price of armchairs
C Decrease in consumer income
D Increase in supply of sofas
Why: For substitutes, an increase in the price of armchairs shifts demand for sofas right as consumers switch. Price change in sofas (A) moves along curve. Income decrease (C) may reduce demand if normal good. Supply increase (D) affects supply curve.
Question 5 of 5
In a graph of the market for bus rides (an inferior good), if consumer incomes rise, what happens to the demand curve?
A The demand curve shifts to the left
B The demand curve shifts to the right
C The supply curve shifts upwards
D The supply curve shifts downwards
Why: Bus rides are inferior goods; rising incomes reduce demand, shifting the demand curve left. Supply shifts unrelated to income.