ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the substitution effect
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the income effect
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an increase in the demand for Nike soccer balls
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the price effect
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Detailed explanation-1: -When the price of a product falls, the purchasing power of our money income rises and thus permits consumers to purchase more of the product. This statement describes: the income effect. When the price of Nike soccer balls fell, Ronaldo purchased more Nike soccer balls and fewer Adidas soccer balls.
Detailed explanation-2: -The answer is b. inflationary effect. Inflation is a measure of the increase in a price of something. As the prices rises, less of it can be purchased with a given unit of money.
Detailed explanation-3: -A change in price will cause a movement along a demand curve just as other variables cause it to shift.
Detailed explanation-4: -One reason that the quantity demanded of a good increases when its price falls is that the: lower price increases the real incomes of buyers, enabling them to buy more. price decline shifts the supply curve to the left.
Detailed explanation-5: -Other things equal, if the price of a key resource used to produce product X falls, the: Product supply curve of X will shift to the right.