ECO 3.2

The demand for essential goods typically:

• Decreases sharply with price increase

• Remains stable despite price changes

• Increases with price increase

• Is unaffected by income changes

If people expect the price of a product to rise next week, what do they do now?

• They buy more now

• They wait for the price to rise

• They stop buying forever

• They sell more

What happens when a product goes out of fashion?

• Demand goes up

• Demand goes down

• Demand stays same

• Everyone still buys it because... nostalgia?

Who introduced the Law of Demand?

• Adam Smith

• Milton Friedman

• Alfred Marshall

• Captain Economics

In which book was the Law of Demand explained?

• Wealth of Nations

• Demand and Supply

• The Price Is Right

• Principles of Economics

What kind of relationship exists between price and quantity demanded?

• It’s complicated

• Direct

• Equal

• Inverse

Which of the following is the correct formula representing the Law of Demand?

• Px = f(Dx)

• Dx = f(Px)

• Dx + Px = f

• Dx= p(fx)

Why should the price of substitute goods remain unchanged?

• Because all prices rise together

• To avoid a tea vs. coffee war

• Because changes in substitute prices affect demand

• Because substitutes don’t matter

What does the X-axis represent in a demand curve graph?

• Quantity demanded

• Price of the commodity

• Time

• The path to the treasure

What does the Y-axis represent in a demand curve graph?

• Quantity demanded

• Price of the commodity

• Consumer income

• My future