Ch 4 Demand quiz

The law of demand states that as the price increases then 

• quantity demanded increases
• quantity demanded decreases
• demand increases
• demand decreases

A recent scandal in which 1 million fake Chanel hand bags have been discovered. There is in an increase in Louis Vuitton hand bags because

• price of a complement
• price of a substitute
• tastes and preferences
• income

Which of these best describes the law of demand?

• if prices go up, quantity demanded will fall and if prices go down, quantity demanded will go up

• if prices go up, quantity demanded will also go up and if prices go down, quantity demanded will also go down

• there is no law of demand, each situation is unique and demand and prices cannot be predicted

• prices will go up for certain goods when quantity demanded goes up and vice versa

An decrease in demand for iPhones in Hong Kong could be caused by a(n)

• increase in price for Samsung Galaxy
• increase in population in HK
• the price for iPhones is expected to increase next week
• the price of iPhone apps increased

Thousands of people leave a small town due to a factory closing down.  Sales at the local grocery store become slow. What causes this change?

• Prices or availability of substitutes
• Prices or availability of complementary goods
• Change in the weather or season
• Population (Change in the number of buyers)

The price of movie tickets in a town has risen from $7 to $9. What is the most likely effect of the change in price?

• The demand curve for movie tickets will move right.
• The quantity demanded for movie tickets will increase.
• The demand curve for movie tickets will move left
• The quantity demand for movie tickets will decrease

When replacing a certain item with with a relatively less expensive similar item or product is an example of

• the substitution effect

• the income effect

• demand elasticity

• complements

Describes very little a change in demand with a large change in price 

• elastic 
• inelastic 
• demand curve 
• price 

Change in quantity demanded due to a change in price that is so great that it alters a consumers over all real income

• elasticity

• inelastic

• income effect

• total expenditures

The formula for calculating elasticity of demand is:

• The % change in price over the % change in quantity demanded
• The % change in quantity demanded over the % change in price
• The change in price over the change in quantity demaned
• The change in quantity demanded over the change in price