Chapter 3 - Demand

If you keep buying despite a price increase, your demand is

• elastic.
• strong.
• normal.
• inelastic.

A demand curve illustrates the

• differences in price charged by different stores.
• quantities demanded at each price by consumers.
• differences in demand for different products.
• products that are most in demand.

Substitutes are goods

• that are bought and used together.
• used in place of one another.
• that cannot be replaced.
• that cause a shift in the demand curve.

A drop in price will

• increase the quantity demanded of goods.
• decrease the quantity demanded of goods.
• not affect the quantity demanded of goods.
• change the law of demand.

A measure of how consumers react to a change in price is known as the

• elasticity of demand.
• law of demand.
• income effect.
• demand curve.

For most goods, a rise in people's income means that there will be a(n)

• substitution effect.
• rise in prices.
• increase in demand.
• decrease in demand.

Which of the following is determined by dividing the percent change in quantity demanded by the percent change in price?

• demand curve
• law of demand
• income effect
• elasticity

Which of the following describes the substitution effect

• As the price of a good falls, people will substitute other products.
• As the price of a good rises, people will substitute other products.
• As demand rises, people will substitute other products.
• As demand falls, people will substitute other products.

Which of the following is an example of a good with inelastic demand?

• television sets

• computers

• PS4

• life-saving medicine

If a firm knows that the demand for its product is inelastic what will happen if they raise prices?

• make the demand for the product elastic.

• increase total revenue.

• have no effect.

• decrease total revenue.