NABTEB EconomicsPast Questions & Explanations

Practice 60+ NABTEB Economics questions from the SuperPrep question bank. Every question comes with a full explanation so you learn the method, not just the answer.

1. 1.

   In economics, demand refers to the quantity of a commodity that consumers are willing and able to buy at a given price and time.

   1. A.True
   2. B.False
   3. C.Partly True
   4. D.Undecided

   Show explanation

   Demand is the quantity of a good consumers are willing and able to purchase at various prices during a given period.
2. 2.

   Which of the following is the major determinant of demand?

   1. A.Price of the commodity
   2. B.Cost of production
   3. C.Government expenditure
   4. D.Exchange rate

   Show explanation

   The price of a commodity is the primary factor influencing its demand.
3. 3.

   According to the law of demand, when price increases, quantity demanded generally?

   1. A.Falls
   2. B.Rises
   3. C.Remains constant
   4. D.Doubles

   Show explanation

   The law of demand states that quantity demanded falls as price rises, other things being equal.
4. 4.

   A demand schedule shows?

   1. A.The relationship between price and quantity demanded
   2. B.The relationship between cost and profit
   3. C.The relationship between income and savings
   4. D.The relationship between production and supply

   Show explanation

   A demand schedule is a table showing quantities demanded at different prices.
5. 5.

   The graphical representation of demand is known as the?

   1. A.Demand curve
   2. B.Supply curve
   3. C.Production curve
   4. D.Cost curve

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   A demand curve graphically illustrates the relationship between price and quantity demanded.
6. 6.

   A normal demand curve slopes?

   1. A.Downward from left to right
   2. B.Upward from left to right
   3. C.Vertically upward
   4. D.Horizontally straight

   Show explanation

   The demand curve slopes downward because of the inverse relationship between price and quantity demanded.
7. 7.

   Which of the following can increase demand for a commodity?

   1. A.Increase in consumers' income
   2. B.Increase in production cost
   3. C.Decrease in population
   4. D.Increase in taxation on producers

   Show explanation

   For normal goods, an increase in consumers' income increases demand.
8. 8.

   A change in quantity demanded caused by a change in price results in?

   1. A.Movement along the demand curve
   2. B.Shift of the demand curve
   3. C.Change in supply
   4. D.Change in production

   Show explanation

   Price changes cause movement along the same demand curve.
9. 9.

   A rightward shift of the demand curve indicates?

   1. A.Increase in demand
   2. B.Decrease in demand
   3. C.Decrease in supply
   4. D.Increase in cost

   Show explanation

   A rightward shift means consumers demand more at every price level.
10. 10.

    Which factor does NOT cause a shift in demand?

    1. A.Change in the commodity's own price
    2. B.Change in income
    3. C.Change in population
    4. D.Change in taste

    Show explanation

    A change in a commodity's own price causes movement along the curve, not a shift.

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11. 11.

    Goods that are demanded together are called?

    1. A.Complementary goods
    2. B.Inferior goods
    3. C.Normal goods
    4. D.Giffen goods

    Show explanation

    Complementary goods are consumed together, such as cars and fuel.
12. 12.

    Tea and coffee are examples of?

    1. A.Substitute goods
    2. B.Complementary goods
    3. C.Capital goods
    4. D.Public goods

    Show explanation

    Consumers may switch between tea and coffee, making them substitutes.
13. 13.

    An increase in the price of a substitute good will generally?

    1. A.Increase demand for the related commodity
    2. B.Reduce demand for the related commodity
    3. C.Reduce supply
    4. D.Increase production costs

    Show explanation

    Consumers switch to the relatively cheaper substitute.
14. 14.

    Demand for an inferior good usually falls when?

    1. A.Consumer income rises
    2. B.Price falls
    3. C.Population increases
    4. D.Taxes decrease

    Show explanation

    As income rises, consumers often switch from inferior goods to better alternatives.
15. 15.

    Effective demand differs from mere desire because it is backed by?

    1. A.Ability to pay
    2. B.Government approval
    3. C.Advertising
    4. D.Production

    Show explanation

    Demand requires both willingness and ability to purchase.
16. 16.

    The demand curve for a Giffen good may slope?

    1. A.Upward
    2. B.Downward
    3. C.Horizontally
    4. D.Vertically

    Show explanation

    Giffen goods are exceptions to the law of demand and may have upward-sloping demand curves.
17. 17.

    When consumers expect prices to rise in the future, current demand will likely?

    1. A.Increase
    2. B.Decrease
    3. C.Remain unchanged
    4. D.Become perfectly elastic

    Show explanation

    Consumers buy more now to avoid higher future prices.
18. 18.

    A leftward shift of the demand curve may result from?

    1. A.A decline in consumer income for a normal good
    2. B.An increase in population
    3. C.Improved consumer preference
    4. D.Higher income levels

    Show explanation

    Lower income reduces demand for normal goods.
19. 19.

    The ceteris paribus assumption in the law of demand means?

    1. A.Other factors remain constant
    2. B.Prices always rise
    3. C.Supply equals demand
    4. D.Consumers maximize profit

    Show explanation

    Ceteris paribus means all other relevant factors are held constant.
20. 20.

    Which of the following best explains the downward slope of the demand curve?

    1. A.Income and substitution effects
    2. B.Government regulation
    3. C.Producer behavior
    4. D.Technological progress

    Show explanation

    The income effect and substitution effect help explain why demand falls as price rises.