Multiple choice

Which of the following is a correct statement?

  1. Decrease in input prices causes a leftward shift in the supply curve

  2. The desire for a commodity backed by ability and willingness to pay is demand

  3. When income increases, the demand for essential goods increases more than proportionately

  4. The demand for a commodity is inversely related to the price of is substitutes
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Demand is defined as the desire for a commodity backed by both ability and willingness to pay. A decrease in input prices shifts supply curve rightward, not leftward. Essential goods demand increases less than proportionately with income (they're inelastic). Substitute goods have direct relationship, not inverse.

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