Demand Open Notes Quiz

The study of the economic behavior and decision making of small units such as households and firms is known as

• economics

• microeconomics

• macroeconomics

• none of the above

If there is a decrease in income then we can expect to see an increase in demand or a shift to the right for

• normal goods

• inferior/generic goods

• name brand goods

• complementary goods

Which of the following statements exhibits the demand for a widget (made up economic item)?

• I want a widget.

• I want a widget and can afford it.

• I want a widget, can afford it and am willing to buy it.

• I am willing to buy a widget but I can't afford it.

The law of demand states that when

• prices are high consumers will by more, prices are low consumers will buy less.

• prices do not factor into the law of demand.

• prices are high consumers will by less, prices are low consumers will buy more.

• prices will shift the curve to the right or the left.

There is a(n) (a)   relationship between price and QD of a product.

• inverse (negative)

• direct (positive)

• surplus

• shortage

All of the following are true about the income effect EXCEPT:

• when prices drop you get “more bang for your buck”

• consumers feel richer when prices drop

• consumers feel poorer when prices rise

• when consumers get paid more they buy more

The substitution effect states that:

• consumers will buy more today if they think prices will go up in the future

• consumers are willing to buy more if they are paid more

• consumers are brand loyal and never substitute products

• consumers react to an increase in a good’s price by consuming less of one good and more of other goods

The demand curve below is

• downward sloping

• upward sloping

• sideways sloping

• non-sloping

The demand curve is downward sloping because of the

• law of supply

• inverse relationship between price and quantity demanded

• direct relationship between price and quantity demanded

• positive relationship between price and quantity demanded

Changes in demand are reflected as a

• shift in the curve

• movement along the curve

• change in quantity demanded

• change in supply