5) When used in a professional or technical sense, the law of supply and demand

Question

5) When used in a professional or technical sense, the law of supply and demand refers to a. some vague influences on economic affairs. b. the fact that prices go up when commodities are scarce. c. the market forces that show how prices and quantities are determined. d. the controls that regulate the amount of scarce goods that each consumer can purchase 6) Sugarcane can be used for producing both sugar and ethanol. New regulations in certain countries now allow a higher level of ethanol in gasoline. An economist would expect sugarcane prices to --, and quantity sold to . a. rise; rise. b. fall; fall c. rise; fall. d. fall; remain the same. 7) Which of the following will shift the demand curve for milk? a. change in the income of buyers of milk b. change in the price of milk c. change in input prices for milk d. All of the above are correct

Explanation / Answer

5)

When used in professional sense, law of demand and supply refers to the market forces that show how prices and quantities are determined.

The correct option is c

6)

Sugarcane can be used for producing sugar and ethanol. A higher level of ethanol in gasoline would imply that demand for sugarcane will rise as it is an input used in productionof ethanol. An economist would expect that sugarcane price will rise and quantity sold will also rise

the correct option is a

7)

Shift in demand curve fro milk is caused by the determinants of demand except price of milk. Among the given options, change in the income of buyers of milk would shift the demand for milk whereas price of milk would cause a movement along the demand curve and change in input price would cause supply curve of milk to shift.

the correct option is a

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