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NABTEB Economics Practice Questions & Explanations

Try 20 of 60+ NABTEB Economics questions as a free quiz — select your answers, submit, and see your score with a full explanation for every one.

  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.
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    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?
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    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?
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    The law of demand states that quantity demanded falls as price rises, other things being equal.
  4. 4.
    A demand schedule shows?
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    A demand schedule is a table showing quantities demanded at different prices.
  5. 5.
    The graphical representation of demand is known as the?
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    A demand curve graphically illustrates the relationship between price and quantity demanded.
  6. 6.
    A normal demand curve slopes?
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    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?
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    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?
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    Price changes cause movement along the same demand curve.
  9. 9.
    A rightward shift of the demand curve indicates?
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    A rightward shift means consumers demand more at every price level.
  10. 10.
    Which factor does NOT cause a shift in demand?
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    A change in a commodity's own price causes movement along the curve, not a shift.
  11. 11.
    Goods that are demanded together are called?
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    Complementary goods are consumed together, such as cars and fuel.
  12. 12.
    Tea and coffee are examples of?
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    Consumers may switch between tea and coffee, making them substitutes.
  13. 13.
    An increase in the price of a substitute good will generally?
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    Consumers switch to the relatively cheaper substitute.
  14. 14.
    Demand for an inferior good usually falls when?
    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?
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    Demand requires both willingness and ability to purchase.
  16. 16.
    The demand curve for a Giffen good may slope?
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    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?
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    Consumers buy more now to avoid higher future prices.
  18. 18.
    A leftward shift of the demand curve may result from?
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    Lower income reduces demand for normal goods.
  19. 19.
    The ceteris paribus assumption in the law of demand means?
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    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?
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    The income effect and substitution effect help explain why demand falls as price rises.
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