Suppose the price of a service falls and people buy more of that service. What h

Question

Suppose the price of a service falls and people buy more of that service. What has happened?
a) Quantity demanded changed
b) Demand increased
c) Demand decreased

If the rise in the price of a service A leads to a fall in the price of service, we may conclude that,
a) Services A and B are substitutes
b) Services A and B are complements
c) Services A and B are neither substitutes nor complements

The demand for an inferior good is __________
a) Positively related to its own price
b) Negatively related to income
c) Unaffected by consumer tastes and preferences
d) Insensitive to changes in prices of its complements

Which statement is true?
a) A change in demand is the same thing as a change in the quantity demanded
b) The supply curve moves upward to the left
c) The law of demand is no longer valid
d) A rise in income will increase the demand for normal goods

Explanation / Answer

a) b) b) d)

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