A Leftward Shift in the Demand Curve for a Commodity

question 48

Multiple Choice

A leftward shift in the demand curve for a commodity may

• A) mean consumers are willing to buy more of the good at each price than previously.
• B) decrease the equilibrium price of the commodity.
• C) mean that supply decreased.
• D) mean that the price of a complement has fallen.
• E) follow from a rise in the price of the product.

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Definitions:

Implicit Cost

The opportunity cost associated with a firm's use of resources that it owns, which do not have a direct monetary payment but could generate income if deployed elsewhere.

Option

A financial derivative that gives the holder the right, but not the obligation, to buy or sell an asset at a specified price within a given timeframe.

Rate of Inflation

The percentage increase in the general price level of goods and services in an economy over a period of time.

Rate of Interest

The percentage at which interest is paid by a borrower for the use of money that they borrow from a lender.