Economics Chapter 4 Demand

Ceteris paribus, or "all other things held constant," is an assumption that has what effect on a demand schedule?

• It takes only prices into account

• It considers the effects of all possible changes on demand

• It is accurate no matter what changes occur

• It is accurate only at one price level

The change in consumption resulting from a change in real income

• demand curve

• income effect

• elastic

• inferior good

How is future price related to current demand?

• If the price is expected to rise, current demand will drop

• If the price is expected to fall, current demand will rise

• If the price is expected to rise, current demand will rise

• Future price is not related to current demand

What determines how a change in prices will affect total revenue for a company?

• elasticity of demand

• the company's pricing policy

• values of elasticity

• the consumers' incomes

The way that a change in price determines whether or not consumers buy goods

• elasticity of demand

• substitution effect

• law of demand

• complement

A shift in the demand curve means ...

• a change in demand at every price

• a rise in prices

• a decrease in both price and quantity demanded

• a change in consumer income

A graphic representation of the quantities of a good that will be bought at each price

• demand curve

• income effect

• elastic

• inferior good

A good that is always used with another good

• elasticity of demand

• substitution effect

• law of demand

• complement

What determines the price and the quantity produced of most goods?

• the consumer's perception of necessity

• the interaction of supply and demand

• the availability of substitutes for the goods

• the quality of the goods that are produced

a good that replaces another demanded good

• law of demand

• inferior good

• substitute

• complement