Revision for Quiz

When a price goes up, consumers are more likely to do what?

A. Buy more                           B. Buy less

C. Produce more                     D. Produce less

• Buy More

• Buy Less

• Produce More

• Produce Less

In economics, the term utility refers to what?

• The usefulness of a product

• The price of a product

• The production cost of a product

• The re-sale value of a product

Which of these is an example of an incentive?

• An economic policy in a country

• The highest price that can be charged for a good or service

• An industry owned and controlled by a government

• A drop in the price of a product

Which of the following replaces a costly item with a less costly one?

                  

                          

• the substitution effect

• the income effect

• change in demand

• consumer taste

Which is a likely complement to a tablet computer?

• DVDs

• Pencils

• Movie Tickets

• apps

Prices for common vegetables tend to be elastic. Why?

• because other vegetables are available

• because vegetables cannot be substituted

• because consumers must eat

• because vegetables are inexpensive

Consumer demand for utilities such as electricity is generally

• elastic

• inelastic

• unit elastic

• variable

Why do businesses need to know the demand elasticity of their products?

• To create better products

• To better understand their consumers

• To maximize their total revenues

• To respond more quickly to market changes

Demand elasticity is the extent to which a change in price causes a change in the quantity demanded.

• True

• False

To estimate elasticity, add the direction of a price change to the direction of the change in total revenue, or total expenditures.

• True

• False