Unit 2 Study Guide

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.

A change in demand is shown

• along the demand curve

• with a new demand curve left or right of the original demand curve

• without a demand graph

• with a totally vertical line

A change in quantity demanded is shown

• at various points on the demand curve
• with a new demand curve drawn above or below the original demand curve
• with a vertical line

Which of the following would NOT cause a demand curve to shift?

• a change in a consumer's income level
• a change in population
• a change in a consumer's expectations
• a change in the price of a product.

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

Goods that are bought and used together are 

• complementary goods
• substitute goods
• income goods
• unrelated goods

A reduction in the overall population of an area will likely cause a demand curve to shift

• left
• right
•  up
• not at all

Insulin for a diabetic has a/an _______ demand.

• elastic
• inelastic