CIMA BA1 · Chapter 5 · Question 2 of 10
Which of the following would shift the demand curve for a normal good to the right?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A rise in consumers' disposable incomes
Explanation
For a normal good, higher incomes increase demand at every price, shifting the curve right. A fall in its own price is a movement along the curve. Dearer complements and cheaper substitutes both reduce demand, shifting the curve left.
More Demand, supply and price determination MCQs
- Q4In a market, demand is Qd = 500 - 5P and supply is Qs = -100 + 5P, where P is price in $. What are the equilibrium price and quantity?
- Q5If the government imposes an effective maximum price below the equilibrium price, the most likely result is:
- Q6Using the market in which Qd = 500 - 5P and Qs = -100 + 5P, the government imposes a maximum price of $50. What is the resulting shortage?
- Q7A guaranteed minimum price for an agricultural product is set above the equilibrium price. Which of the following is the most likely…
- Q8A specific indirect tax is imposed on a product for which demand is highly price inelastic and supply is relatively price elastic. Which…
