Chapter 4 Econ Test

Which of the following would cause a change in the quantity demanded for a product?

decreasing the price of the product

The demand curve is always

downward sloping

The relationship between the change in price and total expenditures for an elastic demand curve is

inverse

A company decreases the price of a gallon of milk by 10 percent and the company's total revenues fall significantly. What term describes the demand for milk?

inelastic

How does the demand curve show an increase in demand?

the curve shifts right

The Law of Demand states that

more will be purchased at low prices than high ones

Which of the following illustrates elastic demand?

purchasing fresh vegetables in the summer

Buying only one drink instead of two drinks at lunch time describes what concept

diminishing marginal demand

Which of the following statements describes the demand curve?

it shows that there is an inverse relationship between the price of an item and the quantity demanded

A change in the number of consumers can cause

the market demand curve to shift

How does the change in the price of a good affect its complement?

an increase in the price of a good usually leads to a decrease in the demand for its complement

If a consumer cannot postpone the purchase of a product, demand tends to be

inelastic

Total expenditures are determined by

multiplying the price of a product by the quantity demanded

Which of the following is an example of substitutes?

butter and margarine

What is the main difference between the individual demand curve and the market demand curve?

only the market demand curve shows demand for everyone in the market

the extent to which a change in price causes a change quantity demanded

demand elasticity

change in the quantity demanded due to a change in price that alters a consumers real purchasing power

income effect

the desire, ability, and willingness to buy a product

demand

describes demand when a given change in price causes proportional change in the quantity demanded

unit elastic

describes demand when a given change in price causes a relatively larger change in the quantity demanded

elastic

a measure of responsiveness that shows how a dependent variable responds to a change in an independent variable

elasticity

graph showing the quantity demanded at each and every price at a given time

demand curve

the extra usefulness or satisfaction a person gets from acquiring or using one more unity of a product

marginal utility

products that increase the use of other products

complements

illustrated by movement along the demand curve

change in quantity demanded

area of economics that deals with behavior and decision making of small units

microeconomics

a change in quantity demanded due to a change in the relative of a product

substitution effect

products that can be used in place of other products

substitutes

describes demand when a given change in price causes a relatively smaller change in the quantity demanded

inelastic

What determines who is in the market demand curve?

desire, ability, willingness