Day: November 9, 2017

Demand for a good is said to be effective only when it is associated with?

Select ONE answer:

1. Knowledge of the characteristics of the good
2. Willingness and ability to pay for the good
3. Consumer expenditure
4. Sufficient disposable income to pay for the good
5. The existence of an adequate supply of the good

What are the determinants of supply?
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This is multiple choice question is suitable for Economics KS5 classes.

The answer is 2 – At first glance all these answers might seem reasonable. Look at 1 – People do indeed make better choices when they are well informed about a good, but you don’t effectively purchase just because you know about it. Now look at 4 – Having sufficient disposable income (after tax) is essential but not sufficient, as you may not like the good at all but if you have sufficient income and are willing to pay for it, then the demand is effective. But we haven’t mentioned 5 – If the good isn’t supplied consumers can’t purchase, but its provision isn’t sufficient to make consumers purchase. 3 – is a pure distraction.

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