Supply and Demand Review

Front

The law of demand states that there is a _________ relationship between price and quantity demanded

Back

inverse

Front

According to the law of demand, when price goes up, quantity demanded _____

Back

decreases

Front

When you plot prices and quantity demanded on a graph, what is the result?

Back

demand curve

Front

In which direction does the demand curve slope?

Back

downward

Front

Which of the following is NOT a reason why the demand curve slopes down?
substitution effect,
income effect,
government involvement,
law of diminishing marginal utility

Back

government involvement

Front

What is it called when changes in price motivate consumers to buy cheaper substitute goods? (This is a reason why the demand curve slopes the way it does)

Back

substitution effect

Front

The __________ effect occurs when changes in price affect the purchasing power of customers. They can purchase less with the money they have.

Back

income effect

Front

____________ is another word for utility.

Back

satisfaction

Front

As you consume a product or service, you will eventually get less additional utility from each unit consumed. This is called the _______

Back

law of diminishing marginal utility

Front

The entire demand curve can only shift if something other than price changes.

Back

True