Econ 3.1 Quiz

What is the Law of Demand?

• As price increases, quantity demanded increases

• As price decreases, quantity demanded decreases

• As price increases, quantity demanded decreases

• Price and quantity demanded have no relationship

Which of the following best describes the substitution effect?

• Consumers buy more when their income increases

• Consumers switch to cheaper alternatives when prices rise

• Consumers buy less when their income decreases

• Consumers prefer higher-priced goods

What is a demand schedule?

• A list of consumer preferences

• A table showing price and quantity relationships

• A production timeline

• A marketing plan

The income effect refers to:

• The change in purchasing power when prices change

• The total income of all consumers

• The profit earned by businesses

• The cost of production

Which factor does NOT shift the demand curve?

• Change in consumer preferences

• Change in price of the good itself

• Change in consumer income

• Change in population

A market demand schedule is:

• Individual consumer preferences

• The sum of all individual demand schedules

• Business production plans

• Government regulations

When plotting a demand curve, what goes on the vertical axis?

• Quantity

• Time

• Price

• Income

What happens to market demand when consumer income increases?

• The demand curve shifts left

• The demand curve shifts right

• The demand curve becomes steeper

• There is no change in the demand curve

The Law of Demand is primarily based on:

• Government regulations

• Supply chain logistics

• Consumer behavior patterns

• Business profits

What represents a point on the demand curve?

• Total revenue

• Consumer satisfaction level

• A price-quantity combination

• Production costs