Demand, Supply, and Prices

What happens to the quantity demanded when the price of a good goes up?

• It increases

• It decreases

• It stays the same

• It doubles.

The amount of money the company receives by selling its goods is known as ______.

• quality

• profit

• Total revenue

• Total Recall

Which is an example of inelastic good

• TV

• gasoline

• clothes

• Cola

Fill in the blank: The demand curve shows that as the price rises, the quantity purchased _______.

• A) increases

• B) decreases

• C) remains constant

• D) fluctuates

When the price of orange juice rises, consumers substitute cheaper apple juice for orange juice. This is an example of the ________.

• A) Income Effect

• B) Substitution Effect

• C) Price Elasticity

• D) Demand Curve

What does a fall in price, assuming an individual's budget remains constant, mean for their purchasing power?

• They can purchase more goods

• They can purchase fewer goods

• Their purchasing power remains unchanged

• Their purchasing power decreases.

True or False: Economists measure consumption by the amount of money spent to buy a good.

• True

• False

Which of the following statements is true?

• The income effect always increases demand

• The income effect can lead to a decrease in quantity demanded

• The income effect is unrelated to price changes

• The income effect only applies to luxury goods.

Fill in the blank: The substitution effect explains how a change in price can lead to a change in ___.

• supply

• demand

• quantity demanded

• production

According to the demand schedule, what is the price when the quantity demanded is 0?

• $0

• $40

• $100

• $140