Theory of demand

Sugar and honey are viewed as substitute for each other in many cooking applications. If the price of sugar rises, we would expect _________________.

• the demand for honey to increase

• the quantity demanded of honey to increase

• the demand for honey to decrease

• the quantity demanded of honey to decrease

The definition of demand in an economic perspective is ________________.

• the desire to purchase goods and services at a certain price.

• the desire of all individuals in a market to purchase goods.

• the desire of an individual to obtain goods and services, supported by the ability to pay a certain price.

• he ability of an individual to spend his/her income to purchase goods and services.

The law of demand states that if the price of CD’s rise, consumers will

• Buy more CDs
• Buy fewer CDs
• Quantity demanded will not change

The diagram represents a

• increase in demand
• decrease in demand

As prices go up, ______________ goes down.

• Supply
• Demand
• Utility

Demand includes people who are willing and _____________ to buy a product.

• Able
• Hopeful
• Elastic

Which of the following could be a substitute for a soft drink?

• Bread
• Water
• Shirt

Medicine is a _______________.

• Necessity
• Luxory
• Utility

normal goods have negative income effect

• true

• false

• none of the above

Which of the following factors cause a shift in a demand curve?

• Consumer’s income.

• Producer’s goals.

• Level of technology.

• Price of the goods.