Question

The term firm is synonymous with a __________ or a __________.

Select the correct answer below:

producer, business

expender, provider

producer, expender

business, provider

Which of the following would likely cause a rightward shift in demand for solar power?

Select all that apply:

• a widely-seen documentary touts the benefits of solar power

• the price of kitchen sinks increases

• the price of coal power increases

• the population decreases

The demand curve for a normal good is sloped _______________. The demand curve for an inferior good is sloped _______________.

Select the correct answer below:

upwards, downwards

upwards, upwards

downwards, upwards

downwards, downward

Answer 1

1. Option D.

• The term firm is synonymous with a business or a provider.
• A firm is a physical organization or a business that manufactures various goods and services and provides the output to their customers.
• Hence they are also termed as providers and a business.

2. Option A, C.

• Demand curve shifts to the right when the demand of any good or a service increases.
• When the documentory touts all the benefits of the solar power, more people get attracted and the demand for it increases which causes the demand curve to shift towards right.
• We also know that price and demand are directly related to each other. Hence when an increase in the price of coal power required to run the solar increases, the demand curve also shifts to the right.

3. Option A.

• The demand curve for a normal good is sloped upwards and the demand curve for an inferior good is sloped downwards.
• This is because normal goods have positive income elasticities of demand and hence when the income of people increases, their demand for normal goods like food, clothes etc increases.
• While the inferior goods face a negative income elasticity of demand and hence when the income of people increases, their demand for inferior goods like cheap cars decreases.