When a consumer is able and willing to buy a good or service, he or she creates which of the following:

• Consumption

• Demand

• Elasticity

• Allocation

What are inferior goods?

• Goods that are not well produced

• Goods that no one wants to buy

• Goods for which the demand rises when income rises

• Goods for which the demand falls when income rises

What does it mean when the demand for a product is inelastic?

• People will not buy any of the product when the price goes up

• A price increase does not have a significant impact on buying habits

• Customers are very sensitive to the price of the product

• There are very few satisfactory substitutes for the product

What do sellers do if they expect the price of goods they have for sale to increase dramatically in the near future?

• Sell the goods now and try to invest the money instead of resupplying

• Sell the goods now but try to get the higher price for them

• Store the goods until the price rises

• Store the goods indefinitely regardless of when the prices rise

What does elasticity of demand measure?

• an increase in the quantity available

• a decrease in the quantity demanded

• how much buyers will cut back or increase their demand when prices rise or fall

• the amount of time consumers need to change their demand for a good

Which item was once considered a luxury has now become a necessity in America?

• Property

• Cars

• Telephone

• Fresh Water

Demand for life-saving medicine is usually  ______.

• Higher in price

• Inelastic

• Elastic

• Luxury

If the elasticity of demand of a good is equal to 1, it is described as _____?

• Normal good

• Unitary elastic

• Complements

• Equal

Which of the following is the best example of the law of supply?

• A sandwich shop increases the number of sandwiches they supply every day when the price is increased

• A food producer increases the number of acres of wheat he grows to supply a milling company

• A catering company buys a new dishwasher to make their work easier

• A milling company builds a new factory to process flour to export

When the selling price of a good goes up, what is the relationship to the quantity supplied?

• The cost of production goes down

• The profit made on each item goes down

• It becomes practical to produce more goods

• There is no relationship between the two