Economics Chapter 3

Which of the following best describes the way economists view peoples gasoline purchases?

• People need gas

• Theare are no substitutes for gasoline, so people will pay any given price to maintain consumption.

• Both of the above

• None of the above.

The demand for a good is elastic when

• total revenue increases with each decrease in price.

• total revenue decreases with each decrease in price.

• price changes have no effect on total revenue

• the demand curve shifts to the right

Describes how much a change in price affects the quantity demanded.

• Demand

• Change in demand

• Complimentary Good

• Price effect

Something used in place of a particular product.

• Substitute good

• Market demand

• price elasticity of demand

• demand curve

People want to buy more of a product when its price falls.

• Complimentary Good

• Change in demand

• Price elasticity of demand

• Diminishing marginal utility

The quantities of something a person is willing and able to buy at different possible prices.

• Products

• Demand Curve

• Substitute good

• Demand

The point reached when the next item consumed is less satisfying than the one before.

• Price effect

• Complimentary Good

• Change in demand

• Household demand

Items that people typically use together, such as peanut butter and jelly.

• Demand

• Price elasticity of demand

• Price effect

• Complimentary Good

People want to buy less of a product at all possible prices.

• Price Effect

• Change in demand

• Market demand

• Price elasticity of demand

The sum of all individuals' demands in a given market.

• Household economics

• Complimentary good

• Market demand

• Price effect