Chapter MCQ Test 2 — Demand
10 Questions • 12 min • Chapter MCQ
12:00
Question 1 of 10
A poor person wants a car but cannot afford one. In economic terms this is:
A want, not demand (no ability to pay)
Market demand
An exception to the law
A shift in demand
Explanation: Without the ability to pay, the desire is only a want — not demand.
Question 2 of 10
The price of sugar falls and households buy more sugar. This is best described as a:
Movement (extension) along the demand curve
Rightward shift of the curve
Leftward shift
New curve
Explanation: Because the good's own price changed, we slide down the same curve — an extension of demand.
Question 3 of 10
People's incomes rise and they buy more clothes at every price. The clothes demand curve will:
Shift to the right
Shift to the left
Not move
Become vertical
Explanation: A rise in income (a non-price factor) raises demand at each price, shifting the curve right.
Question 4 of 10
When the price of coffee rises, the demand for tea increases. This happens because the two goods are:
Substitutes
Complements
Giffen goods
Unrelated
Explanation: Consumers switch from dearer coffee to its substitute, tea, raising tea's demand.
Question 5 of 10
Expecting petrol prices to rise next week, drivers fill their tanks today. This shows demand is affected by:
Expectations of future prices
The seller's mood
The colour of the pump
Population only
Explanation: Expected future price rises increase present demand — an expectations effect.
Question 6 of 10
A diamond necklace sells more when its price is raised because owning it signals wealth. This is an exception known as a:
Status/prestige (Veblen) good
Complement
Substitute
Normal good
Explanation: Prestige goods bought to display wealth can have demand rising with price — a Veblen-good exception.
Question 7 of 10
A leftward shift of the demand curve for a good could be caused by:
A fall in consumer income (for a normal good)
A fall in the good's own price
A rise in the good's own price
Nothing
Explanation: Lower income reduces demand at every price, shifting the curve left (own-price changes only move along it).
Question 8 of 10
Why is the phrase 'other things remaining constant' essential to the law of demand?
Because if other determinants also change, the simple inverse price–quantity relation may not hold
Because price never changes
Because demand is fixed
Because there is no quantity
Explanation: The law isolates the effect of price alone; if income, tastes, etc. also move, the observed relation can differ.
Question 9 of 10
A rise in a good's own price causing less to be bought is shown as:
An upward movement (contraction) along the curve
A rightward shift
A leftward shift
A new curve
Explanation: Higher own price means we slide up the same curve — a contraction of demand.
Question 10 of 10
Which single rule correctly separates a movement from a shift?
Own price → movement; any other factor → shift
Any change → shift
Any change → movement
Income → movement; price → shift
Explanation: Own-price changes move us along the curve; changes in other determinants shift the whole curve.