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CA Foundation Law of Demand — practice questions

Explore 61 free Law of Demand questions in CA Foundation Business Economics. Open each question or exercise to read its content, reference answers and available explanation.

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Law of Demand questions and exercises with answers

Showing questions 1–30 of 61.

In economics, demand for a commodity combines the wish to buy with what else?Read the answer and worked solution →Demand is described as a flow concept because it is measured in relation to what?Read the answer and worked solution →What is the most important determinant of the demand for a commodity?Read the answer and worked solution →Which pair is an example of complementary goods?Read the answer and worked solution →If the price of a substitute falls, demand for the good in question normally does what?Read the answer and worked solution →With rising income, demand for most goods generally behaves how?Read the answer and worked solution →Which of these is NOT a basic determinant of a household's demand for a commodity?Read the answer and worked solution →A buyer expects the price of a commodity to rise next month. What is the likely effect on present demand?Read the answer and worked solution →The tendency to copy the consumption style of friends and neighbours is called the what?Read the answer and worked solution →A rise in demand for woollen clothes and heaters in winter reflects which determinant?Read the answer and worked solution →When a government imposes VAT or excise duty on a commodity, demand for it generally does what?Read the answer and worked solution →Easy bank loans have helped raise demand for cars in India. Which determinant is this?Read the answer and worked solution →A demand function states the relationship between demand for a product and what?Read the answer and worked solution →A graphical presentation of the law of demand is known as the what?Read the answer and worked solution →Which demand state means consumers share a strong need that no existing product satisfies?Read the answer and worked solution →Which demand state describes purchases that vary by season, month or even hour?Read the answer and worked solution →When more consumers want a product than can be supplied, the demand state is called what?Read the answer and worked solution →Who is credited with first stating the law of demand in his 1699 essay?Read the answer and worked solution →Which economist gave the graphical illustration of the law of demand in Principles of Economics (1890)?Read the answer and worked solution →The law of demand states that, other things equal, price and quantity demanded are related how?Read the answer and worked solution →Which Latin phrase captures the key assumption attached to the law of demand?Read the answer and worked solution →On a demand curve, which variable is plotted on the vertical axis?Read the answer and worked solution →Together, the laws of demand and supply determine what in a market?Read the answer and worked solution →Falling prices raise consumers' purchasing power and so raise the quantity demanded. This is which effect?Read the answer and worked solution →Consumers shifting to cheaper alternatives when a good becomes dearer illustrates which effect?Read the answer and worked solution →A change in the price of the good itself causes what on the existing demand curve?Read the answer and worked solution →A shift of the demand curve occurs when which kind of determinant changes?Read the answer and worked solution →When consumer income rises, the demand curve for a normal good does what?Read the answer and worked solution →A rise in the price of hamburgers shifts the demand curve for chicken in which direction?Read the answer and worked solution →A market demand curve is obtained from individual demand curves by what method?Read the answer and worked solution →

Worked practice questions

In economics, demand for a commodity combines the wish to buy with what else?

  1. Support from advertising
  2. Stock held by shops
  3. Approval of government
  4. Ability to pay for it
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Correct answer: D. Ability to pay for it

Demand is not mere desire; it needs purchasing power behind the wish to buy.

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Demand is described as a flow concept because it is measured in relation to what?

  1. Total wealth of a nation
  2. The cost of production
  3. The size of one purchase
  4. A particular time period
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Correct answer: D. A particular time period

A flow is a variable expressed per unit of time, so demand is stated for a period such as a week or a year.

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What is the most important determinant of the demand for a commodity?

  1. Climate of the region
  2. Income of the seller
  3. Population of the world
  4. Price of the commodity itself
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Correct answer: D. Price of the commodity itself

The commodity's own price is the main factor, and it normally moves inversely with quantity demanded.

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More Business Economics topics

Price-Output Determination under Different Market FormsTheory of Consumer BehaviourSupplyTheory of ProductionProduction And CostPublic FinanceBusiness CyclesBasic Problems of an Economy and Role of Price Mechanism