Unit 2 Test

In economics, the concept of demand is defined as the desire to own something

• that has not yet been manufactured or produced.

• and a willingness to pay more than other consumers for it.

• that a manufacturer is capable of producing.

• combined with the ability to pay for it.

Joan has noticed that the price of bagels has gone up. Because of this, she has decided to buy a less expensive yogurt every morning for her breakfast. This is an example of the

• substitution effect.

• income effect.

• market demand schedule.

• law of demand.

If Tony responds to a sharp increase in his transportation costs by buying fewer clothes, he is demonstrating

• the income effect.

• the substitution effect.

• horizontal demand.

• an individual demand schedule.

Why does demand generally become more elastic over time?

• People have time to find substitutes and change behaviors.

• Few substitutes become available.

• People buy more products over time.

• People don't change their shopping behavior over time.

Study the demand curves below. If the price of a slice of pizza decreased from $4.00 to $2.00, how would that change the number of slices of pizza demanded each day by the market?

• The demand would decrease by 2 slices per day.

• The demand would increase by 100 slices per day.

• The demand would increase by 2 slices per day.

• The demand would decrease by 100 slices per day.

Ashley started taking classes at a local community college and had to switch her job from full time to part time, so she makes less money. How would this development likely affect the graphs below?

• Her individual demand curve would extend downward.

• Her individual demand curve would shift to the left.

• The market demand would move up the demand curve.

• The market demand curve would shift to the right.

Which of the following goods would be considered a complement to flashlights in the context of a demand for goods?

• batteries

• binoculars

• floodlights

• candles

Which of the following describes the relative elasticity in demand for the product shown in a period of economic change?

• Demand is inelastic because it makes up a large share of most people’s budget.

• Demand is inelastic because it is a luxury item.

• Demand is inelastic because it is a low-cost necessity.

• Demand is elastic because there are no substitutes.

The owner of a hamburger stand is thinking about raising the price of a hamburger from $3.00 to $5.00. Based on the table, what can the owner expect about demand in that case?

• Demand will be elastic.

• Demand will increase revenue.

• Demand will be inelastic.

• Demand will be unitary elastic.

If the demand curve shifted more to the right on this graph, which of the following could be the new equilibrium point?

• $800

• no change in equilibrium point

• $500

• $200