Econ CH 3,4,5

The curve that shows the relationship between the price of a good and the quantity that consumers are willing to purchase at each price is the

• supply curve

• demand curve

• production possibilities curve

• consumption curve

A demand curve for concert tickets would show the

• number of tickets the box office is willing to sell at various prices.

• number of people who need tickets.

• quality of people who want to buy these concert tickets.

• number of tickets that will be purchased at various prices.

In economics, the demand for a good refers to the amount of the good people

• would like to have if the good were free.

• are willing to buy at various prices.

• need to achieve a minimum standard of living.

• will buy at alternative income levels.

The law of demand indicates that

• every physical good has a use.

• when people want a good badly enough, they will find a way to pay for it.

• the desire for a good is unrelated to its price.

• the quantity of a good that people will buy is inversely related to the price of the good.

How will consumers generally react to an increase in the price of butter?

• They will purchase a larger quantity of butter

• They will substitute other goods like margarine for the more expensive butter.

• They will reduce their purchases of substitute goods like margarine.

• They will continue purchasing the same quantity of butter at the higher price.

How will consumers generally react to a decrease in the price of a product?

• They will purchase less of it.

• They will substitute other goods for it.

• They will purchase more of it.

• They will continue purchasing the same quantity at the lower price

A movement along a demand curve

• is called a change in demand

• is the result of a change in the price of a good

• can be caused by many things

• means the product is inelastic

The demand curve for a good

• indicates the relationship between the price of the good and the price of other goods.

• indicates the quantities of the good that people will buy at various prices.

• illustrates the quantity producers will provide at alternative prices.

• is determined primarily by the cost of producing the good.

Assume the demand schedule for cookies is downward sloping. If the price of cookies falls from $1.50 to $1.25 per dozen,

• cookie producers will go out of business.

• the demand for cookies will fall.

• a larger quantity of cookies will be demanded.

• a smaller quantity of cookies will be demanded.

Each point on the demand curve indicates

• the demand for the product.

• the quantity demanded at that price.

• the amount that people need

• the amount people want to buy at different income levels.