Law of Demand

According to the Law of Demand, when prices drop...

• demand will also drop

• demand will increase

• quantity demanded is unchanged

• supply increases

The more money that a person makes, the more they are willing to spend..

• diminishing marginal utility

• substitute effect

• total revenue

• income effect

The more of a product that you consume, the less satisfaction the consumer enjoys..

• income effect

• diminishing marginal utility

• demand elasticity

• purchasing power

As prices for a product decrease, demand for a product should increase..

• diminishing marginal utility

• elasticity

• income effect

• law of demand

A product may be amazing, but unless consumers are __ and __ to purchase it, it's not in demand.

• willing

• wishing

• able

• planning

When prices rise for a particular product, consumers will purchase lower-priced similar items..

• income effect

• substitute effect

• diminishing marginal utility

• law of demand

The basic problem of economics is ___.. we just don't have the resources to take care of ALL of our wants/needs!

• opportunity cost

• diminishing marginal utility

• purchasing power

• scarcity

A product may be amazing, but unless people can actually afford it, it's not really in deman.

• True

• False

An oil refinery fire could cause the price of gas to __

• increase

• decrease

• stabilize

• fluctuate wildly