Economics Chapter 4

What are the characteristics of demand?

• the desire and ability to buy a product

• the ability and willingness to buy a product

• the willingness and desire to buy a product

• the desire, ability, and willingness to buy a product

Change in quantity demanded and changes in price have a(n)___________________relationship.

• indirect

• postive

• inverse

• neutral

A hungry man is willing to pay a high price for food. After he is no longer hungry, he is not willing to pay the same price. Which of the following best defines this example?

• a complement

• diminishing marginal utility

• unit elasticity

• the substitution effect

On a demand curve, movement along the curve, as opposed to a shift in the entire curve, is a result of________?

• achange in price

• an increase in demand

• a decrease in demand

• a change in demand

What is the income effect?

• a change in quantity demanded caused by a change in consumer income

• a change in demand caused by substitution

• a proportional change in quantity demanded based on income

• an increase in purchase of complements based on an increase in income

Which would an economist consider a likely substitute for coffee?

• water

• tea

• chicken

• donuts

Which would an economist consider a likely complement for coffee?

• water

• tea

• chicken

• donut

which product most likely has a demand that is inelastic?

• a meal at a restaurant

• green beans

• a vital medicine

• a vaction

What test do economists use to measure elasticity?

• utilty

• revenue

• total expenditures

• demand

To estimate elasticity, compare the ___________ of the price change to the ____________ of the change in total revenue.

• amount, amount

• direction, direction

• amount, direction

• direction, direction