Fundamentals and Elasticity of Demand

What is demand?

• The desire to own something and the ability to afford it.
• A graph that shows the quantity demanded at every price.
• The usefulness of a product expressed in a dollar sign.

Which of the following best describes the Law of Demand?

• As price goes down, demand goes down. (and vice versa).
• As price goes down, demand goes up (and vice versa).
• As demand goes down, supply goes up.
• As demand goes up, price becomes elastic.

The Law of Demand "works" because of a combination of what two effects?

• Substitution and Income Effects
• Doppler and Lake Effects
• The Ability and Desire Effect
• The Substitution and Elasticity Effect

Consuming more of one good because of a change in price of another good is known as the 

• income effect
• substitution effect
• elasticity effect
• demand effect

This occurs when you feel like you have less money when the price of a good rises.

• Income Effect
• Substitution Effect
• Demand Effect
• Inflation Effect

A table that lists the quantity of a good that a single person will buy at each price in a market.

• demand schedule
• market demand schedule
• elasticity chart
• supply and demand graph

The demand for a good is _____ when a small change in price causes a large change in the quantity demanded.

• elastic
• inelastic
• related
• substituted

If a consumer knows that a product will be going on sale this week, how will his/her CURRENT demand be affected?

• it will go up
• it will go down
• it will stay the same
• what does this have to do with the price of tea in China?

Demand for a product is said to be _______ when a change in price causes very little change in quantity demanded.

• elastic 
• inelastic
• related
• rigid

Insulin for a diabetic has a/an _______ demand.

• elastic
• inelastic