Unit 2 Test

For most products and services, an increase in price results in what reaction for demand?

• Demand for fewer products

• Demand for more products

• reduced demand of substitutes

• increased demand for compliments

If the price of milk increases, this will cause a decrease in the demand for cereal, this is because the products are what?

• Substitutes

• Compliments

• Elastic

• Unrelated

Consumers' willingness to replace a costly item with a less costly item is an example of what?

• The substitute effect

• The income effect

• Demand elasticity

• Complements

When customers' need for a product is not urgent, demand tends to be what?

• Inelastic

• Elastic

• Complementary

• Unit elastic

Because a price change has little to no effect on demand, the product is considered?

• Complementary

• Elastic

• Inelastic

• Unit Elastic

According to this graph, what would the demand (in gals) of gas if the price was set at $3.50

• 40

• 70

• 90

• 60

According to the graph, what was the demand for chocolate at the price of $0.80 BEFORE it became popular?

• 100

• 500

• 400

• 200

What would be a reason that this graph shifted this way?

• The government released a study saying chocolate made you live longer

• The consumers lost money on their tax returns

• the price of milk went up

• the price of a chocolate substitute went down

Assuming that consumer P, Q, and R make up the market, what would be the market demanded for burritos if the price was $4?

• 10

• 5

• 14

• 25

This graph is an example of what kind of elasticity?

• Unit elastic

• Inelastic

• Elastic

• Not elastic