Demand

What is a surplus?

• Not enough production

• An excess of production

• The profit made after products are sold

• The amount of sales of a product over a given period

According to the law of demand, what happens when the price of a product goes up?

• People buy more

• People buy less

• People buy the same amount

As the price of a product goes down, people buy less of that product

• True

• False

Consumers try to buy things at the lowest possible price

• True

• False

What is the difference between a demand schedule and a market demand schedule?

• A market demand schedule shows prices at a given moment

• A market demand schedule shows consumer behavior for an entire market

• A demand schedule is for one person

An individual demand schedule gives a producer all the information they need

• True

• False

The law of diminishing marginal utility states that the marginal benefit each unit of a good or service tends to increase each time it's used

• True

• False

What is the income effect?

• The change in amount of product producers will make based on average income of consumers

• The change in amount of product consumers will purchase when purchasing powers of their income changes

• The change in income due to changes in producer behavior

• The change in income when prices of prices of products change

What is the substitution effect?

• Producers fight to out price their competitors with substitute products

• Consumers buy a substitute product because it is new/exciting

• Consumers generally reject substitute products because they don't want change

• Consumers react to a change in price of a good by buying a substitute product

Which one of these was NOT a factor that affects demand?

• Income

• Consumer Tastes

• Occupation

• Market Size