[amp_mcq option1=”Decrease in input prices causes a leftward shift in the supply curve” option2=”The demand for a commodity is inversely related to the price of its substitutes” option3=”The desire for a commodity backed by ability and willingness to pay is demanded” option4=”When income increases demand for essential goods increases more than proportionately” correct=”option3″]
The correct answer is: C. The desire for a commodity backed by ability and willingness to pay is demanded.
- A. Decrease in input prices causes a leftward shift in the supply curve is incorrect. A decrease in input prices causes a rightward shift in the supply curve.
- B. The demand for a commodity is inversely related to the price of its substitutes is incorrect. The demand for a commodity is inversely related to the price of its COMPLEMENTS.
D. When income increases demand for essential goods increases more than proportionately is incorrect. When income increases, the demand for normal goods increases, but not necessarily more than proportionately.
C. The desire for a commodity backed by ability and willingness to pay is demanded is correct. This is the definition of demand. Demand is the willingness and ability of buyers to purchase a good or service at various prices during a given period of time.