Econ - Chapter 3 Review

This takes place when a consumer reacts to a rise in the price of one good by consuming less of that good and more of another of a similar good.

• Income effect

• Substitution effect

• Law of demand

• Demand effect

When the price of apples decreases, how does the income effect influence the demand of the consumption of other goods?

• It has no effect on the demand of other goods

• It causes a decrease in the demand of other goods

• It causes an increase in the demand of other goods

• It causes an increase in the demand of apples

This is a table that shows the quantities demanded at various prices by all consumers in the market

• An individual demand schedule

• A demand curve

• A demand schedule

• A market demand schedule

Under this assumption, "all other things are held constant"

• Carpe Diem

• Alter Ego

• Ceteris Paribus

• Delirium Tremens

The demand for these goods decreases as income increases

• Inferior goods

• Normal goods

• Private goods

• Public goods

All of the following are non-price determinants of demand EXCEPT:

• Changes in income

• Changes in production costs

• Changes in population size

• Consumer expectations about prices in the future

When demand for a good or service increases at every price, the demand curve:

• Shifts up

• Shifts to the left

• Shifts down

• Shifts to the right

When there is an increase in the PRICE of skis, what happens to the DEMAND of ski boots? (think complementary goods)

• It goes up

• It goes down

• It stays the same

• It becomes obsolete

The law of supply declares which of the following?

• Supply falls as price falls

• Supply increases as price falls

• Supply stays the same no matter how prices change

• Supply falls as prices increase

Which of the following typically happens as the price for a good or service rises?

• Suppliers leave the market

• Consumers seek more of a good or service to consume

• Demand becomes increasingly elastic

• More suppliers enter the market