Demand Curves

Refer to Figure above. Which of the following goods is an inferior good?

• Steak

• Clothing

• Hamburger

• Food

You are the manager of Fun World, a small amusement park that only charges per ride. The diagram shows the demand curve for a typical customer. At $5 per ride, how much consumer surplus does each customer get?

• $5

• $15

• $25

• $50

Consumer surplus is the area

• below the demand curve and above the price.

• above the supply curve and below the price.

• above the demand curve and below the price.

• above the demand curve and below the price.

When the price is P_1, consumer surplus is

• A

• A + B

• A + B + C

• A + B + D

When the demand for a product or service is higher than the supply this causes what?

• shortage

• consumer

• surplus

• equilibrium

A _____ is a graph that lists prices on the vertical axis and quantities on the horizontal axis.

• demand curve

• market demand

• utility demand

• demand schedule

According to the _____, quantity demanded and price move in opposite directions.

• law of demand

• demand curve

• demand schedule

• market demand

What does a downward-sloping demand curve indicate in terms of consumer behavior?

• A) As price decreases, quantity demanded increases.

• B) As price increases, quantity demanded increases.

• C) As price decreases, quantity demanded decreases.

• D) Price and quantity demanded are unrelated.

Which of the following factors can cause a shift in the demand curve to the right?

• A) A decrease in consumer income for a normal good.

• B) An increase in the price of a substitute good.

• C) A decrease in the price of a complementary good.

• D) A decrease in consumer preferences for the good.

What is the term for the responsiveness of quantity demanded to a change in price?

• A) Price elasticity of demand

• B) Income elasticity of demand

• C) Cross-price elasticity of demand

• D) Supply elasticity