The Demand Curve quiz #2 Flashcards
The Demand Curve quiz #2
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If the price of a product were to go down, what would happen to quantity demanded? Quantity demanded would increase. Which statement best illustrates the law of demand? If the price of a good rises, people buy less of it. Which of the following examples demonstrates the law of demand? When the price of pizza falls, more pizzas are purchased. Why do most demand curves have a negative slope? Most demand curves have a negative slope because of the substitution and income effects. In moving along a demand curve for good x, what changes? Only the price of good x changes, causing quantity demanded to change. If the price of a good were to change, will it shift demand or change quantity demanded? A change in price causes a change in quantity demanded, not a shift in demand. Which of the following would increase the demand for beef? An increase in consumer income (if beef is a normal good) or a rise in the price of a substitute. Which of the following defines demand? Demand is the relationship between the price of a good and the quantity consumers are willing and able to buy at each price. How can marginal utility theory be utilized to find the demand curve? Marginal utility theory explains why consumers buy less as price rises, helping to derive the downward-sloping demand curve. The law of demand applies most directly to which group? buyers, sellers, producers, lawmakers The law of demand applies most directly to buyers (consumers). Which phrase defines a demand schedule? A demand schedule is a table showing the quantity demanded at various prices. Which statement is consistent with the law of demand? As price increases, quantity demanded decreases. Which of the following is not a component of demand? Supply is not a component of demand. Which economic system is characterized by supply and demand? A market economy is characterized by supply and demand. Which of the following can both increase and decrease demand depending on the type of good? Changes in consumer income can increase or decrease demand depending on whether the good is normal or inferior. Which of these statements best represents the law of demand? When the price of a good rises, the quantity demanded falls. What is the relationship between the price and the number of necklaces Rachael supplies? As price increases, the quantity supplied typically increases (supply relationship). Why do economists use the term 'law' when they describe demand? Economists use 'law' because the relationship between price and quantity demanded is consistent and predictable. Which of the following helps to explain why the aggregate demand curve slopes downward? The substitution effect and the income effect help explain the downward slope. Which of the following situations best illustrates the law of demand? A store lowers the price of shoes and sells more pairs. What is demand? Demand is the relationship between price and the quantity of a good consumers are willing and able to buy. How does the ceteris paribus assumption affect a demand curve? Ceteris paribus means all other factors are held constant except price, isolating the effect of price on quantity demanded. Which of the following illustrates the law of demand? A decrease in price leads to an increase in quantity demanded. Which of the following would most likely lead to a decrease in demand? A decrease in consumer income (for a normal good) or a change in tastes away from the product. What happens to the total quantity demanded when the price of the product rises above $50? Total quantity demanded decreases when the price rises above $50. Which of the following likely affects the demand curve? Changes in consumer preferences affect the demand curve. What are three characteristics of a demand curve? A demand curve is downward sloping, shows the relationship between price and quantity demanded, and is based on ceteris paribus. Demand for a product is most likely to increase because Demand increases due to higher consumer income, increased population, or positive changes in tastes. The typical slope of the demand curve as perceived by a monopolistic competitor will The demand curve for a monopolistic competitor is typically downward sloping. If the price of chocolate increases, in the market for chocolate this will cause: An increase in price will cause a decrease in quantity demanded. Generally, a seller can charge a higher price for a product when A seller can charge a higher price when demand is high or supply is limited. Offering to buy more of a product if a manufacturer lowers its wholesale price is an example of This is an example of the law of demand. Demand for a product is most likely to increase because: Demand increases due to factors like higher income, more buyers, or favorable preferences. A change in quantity demanded can be described as: A movement along the demand curve due to a change in price. A competitive firm's average-revenue schedule is also known as its demand schedule. True; in perfect competition, the average-revenue schedule is the same as the demand schedule. The market demand for a product has increased if: The market demand has increased if, at every price, a greater quantity is demanded. An increase in the price of beef provides ________. An increase in price provides an incentive for consumers to buy less beef. An increase in the price of a good will shift the demand curve of the good to the left. False; a price increase causes movement along the curve, not a shift. To an economist, an increase in demand means the same thing as an increase in quantity demanded. False; an increase in demand means the curve shifts, while an increase in quantity demanded is movement along the curve. When higher prices result in a lower quantity demanded, economists call this relationship This relationship is called the law of demand.
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