Law of Demand

The desire to have some good or service and the ability to pay for it

• supply

• equilibrium

• demand

• quantity demanded

Which of these best describes the law of demand?

• if prices go up, quantity demanded will fall and if prices go down, quantity demanded will go up

• if prices go up, quantity demanded will also go up and if prices go down, quantity demanded will also go down

• there is no law of demand, each situation is unique and demand and prices cannot be predicted

• prices will go up for certain goods when quantity demanded goes up and vice versa

A change in the price of a good causes people to buy more or less of an item. This best describes the concept of

• the demand curve

• change in quantity demanded

• change in demand

• elasticity

The quantity demanded of a good or service changes at all price levels best describes the concept of

• change in quantity demanded

• elasticity

• change in demand

• demand curve

The downward slope of a demand curve

• represents the law of demand
• shows that as the price of a good rises, consumers increase the quantity they demand
• indicates how the quantity demanded changes when incomes rise and the good is a normal good
• indicates how demand changes when incomes rise and the good is a normal good

How is a decrease in the price of a good illustrated on a demand graph?

• The demand curve shifts to the right.

• The demand curve shifts to the left

• There is upward movement along the demand curve

• There is downward movement along the demand curve.

What is the relationship between the Price and Quantity Demanded?

• Positive Relationship

• Direct Relationship

• Inverse Relationship

• Mixed Relationship

The law of demand states; there is an INVERSE relationship between price and quantity demanded. Which of the following is not a true statement?

• Price goes up qty demanded goes down.

• Price goes down, qty demanded goes up.

• Price goes up, demand goes down.

• All answers are correct.

According to the Law of Demand, when prices drop...

• demand will also drop

• demand will increase

• quantity demanded is unchanged

• supply increases

The more of a product that you consume, the less satisfaction the consumer enjoys..

• income effect

• diminishing marginal utility

• demand elasticity

• purchasing power