Economics: Chapter 4 Review- Demand

Generally speaking, the lower the price, the greater the quantity demanded.

• True
• False

Consumer wants are the same as consumer demand.

• True
• False

The demand curve slopes upward, indicating that price and quantity are positively correlated.

• True
• False

Demand is elastic if it is greater than 1.0.

• True
• False

An individual point on a demand curve shows the quantity demanded at a particular price.

• True
• False

When two goods are complements, a decrease in the price of one shifts the demand for the other leftward.

• True
• False

Opportunity cost of time is constant among all consumers.

• True
• False

Real income refers to

• how much money you actually earn.
• your income minus your taxes.
• how much your income can buy.
• your income minus taxes and benefits.

Which situation shows the law of diminishing marginal utility at work?

• you are willing to pay more for every succeeding slice of pizza you purchase.
• you are willing to pay the same price for every succeeding lsice of pizza you purchase.
• You will only purchase succeeding slices of pizza if they cost less.
• Each slice of pizza you buy gets smaller.

Which of the following parts of a consumer budget would be most price elastic?

• housing
• cable
• telephone
• automobile