Unit 2 Review

What are the two main components of demand?

• A) Price and Quantity

• B) Desire and Ability

• C) Supply and Demand

• D) Cost and Benefit

According to the law of demand, what happens to demand as prices go up?

• A) Demand goes up

• B) Demand stays the same

• C) Demand goes down

• D) Demand fluctuates

On a demand curve, what is shown on the x-axis?

• A) Quantity Demanded

• B) Price

• C) Supply

• D) Time

What does a market demand curve represent?

• A) A single consumer's demand

• B) All consumers' demand

• C) A producer's supply

• D) A single product's supply

What direction does the demand curve shift when there is an increase in demand?

• A) Upward

• B) Downward

• C) Right

• D) Left

Which of the following is NOT a factor that causes a change in demand?

• A) Income

• B) Tastes

• C) Prices of related goods

• D) Production cost

What are substitute goods?

• Goods that are often consumed together.

• Goods that can easily replace one another.

• Goods that are always in high demand.

• Goods that are rarely used.

What happens to the demand for a complement good when the price of one good increases?

• Demand for the complement increases.

• Demand for the complement decreases.

• Demand for the complement remains unchanged.

• Demand for the complement doubles.

According to the law of supply, what happens as prices increase?

• Supply decreases.

• Supply remains constant.

• Supply increases.

• Supply becomes unpredictable.

On a supply curve, what is shown on the x-axis?

• Price

• Quantity supplied

• Demand

• Time