# MCQs on Law of Demand

Law of demand is a fundamental principle of Economics, it states that quantity demanded is always inversely related to the price of the goods. In other words, with increase in price, quantity demanded will be less and vice versa.

Following are some of the law of demand multiple choice questions and answers that will help the students in brushing up their understanding of the concept of law of demand.

Q1. The law of demand states, with increase in price there is

(a) decrease in quantity demanded

(b) increase in quantity demanded

(c) decreased demand

(d) increased demand

Q2. The following would cause a change in the quantity demanded for a product?

(a) changing prices of related products

(b) changing consumer tastes

(c) increasing consumer income

(d) decreasing price of product

Q.3 Increase in demand can occur due to:

(a) Increase in income of the consumer

(b) Decrease in price of the complementary good

(c) Increase in price of the substitutes

(d) All of these

Q4. Violation of Law of Demand occurs when:

(a) Negative income effect is greater than substitution effect

(b) Negative income effect is less than substitution effect

(c) Income effect is negative

(d) Substitution effect is negative

Q5. Movement along the demand curve illustrates

(a) shift in quantity demanded

(b) complement effect

(c) change in quantity demanded

(d) income effect

Q6. Increase in demand is shown by demand curve when

(a) the curve shifts right

(b) the curve shifts left

(c) movement along the curve there is no change

(d) movement along the curve

Q.7 The demand curve is always

(a) level

(b) irregular

(c) upward sloping

(d) downward sloping

Q.8 Which of the following is a complement product to peanut butter?

(a) Sugar

(b) Jelly

(c) Mustard

(d) Soda

Q.9 The Law of Demand is measured from the perspective of

(a) Consumer

(b) Shopkeeper

(c) Wholesaler

(d) Manufacturer

Q.10 Goods for which demand goes down when income goes up are called

(a) Public Goods

(b) Inferior Goods

(c) Normal Goods

(d) Private Goods
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