Unit 2 Price and Markets

Microeconomics deals with behavior and decision making by small units such as ________ and firms.

• individuals

• governments

• countries

• continents

Fill in the blank: Demand is the ability and ________ to buy a product.

• willingness

• necessity

• obligation

• compulsion

A demand curve is a graph showing the quantity demanded at each ________ in the market.

Fill in the blank: The law of demand states that quantity demanded has a ________ or inverse relationship with price.

• negative

• positive

• direct

• neutral

Diminishing marginal utility states that the more units of a product a person acquires, the _______ eager they are to buy more.

• less

• more

Change in quantity demanded is the movement along the demand curve due to a change in ________.

• price

• consumer income

• tastes and preferences

• population

Change in demand is the shift of the entire demand curve due to factors like consumer income, tastes, substitutes, complements, expectations, and number of ________.

• consumers

• producers

• products

• markets

Demand elasticity is the extent to which changes in price cause changes in quantity ________.

• demanded

• supplied

• produced

• consumed

Fill in the blank: Elastic demand occurs when a small change in price causes a ________ change in quantity demanded.

• large

• small

• moderate

• no

Inelastic demand occurs when a change in price causes a relatively ________ change in quantity demanded.

• smaller

• larger

• equal

• proportional