Demand Quiz

What is the law of demand?

• The law of demand states that as the price of a good or service increases, the quantity demanded also increases.

• The law of demand states that as the price of a good or service decreases, the quantity demanded also decreases.

• The law of demand states that as the price of a good or service increases, the quantity demanded remains constant.

• The law of demand states that as the price of a good or service increases, the quantity demanded decreases, and vice versa.

Explain the concept of price elasticity of demand.

• Price elasticity of demand measures the responsiveness of quantity demanded to a change in price.

• Price elasticity of demand measures the responsiveness of production to a change in price.

• Price elasticity of demand measures the responsiveness of income to a change in price.

• Price elasticity of demand measures the responsiveness of quantity supplied to a change in price.

What is the difference between a change in quantity demanded and a change in demand?

• A change in quantity demanded is a movement along the supply curve due to a change in price, while a change in demand is a shift of the entire supply curve due to factors other than price.

• A change in quantity demanded is a shift of the entire demand curve due to factors other than price, while a change in demand is a movement along the demand curve due to a change in price.

• A change in quantity demanded is a shift of the entire supply curve due to factors other than price, while a change in demand is a movement along the supply curve due to a change in price.

• A change in quantity demanded is a movement along the demand curve due to a change in price, while a change in demand is a shift of the entire demand curve due to factors other than price.

How does income affect demand?

• Income has a negative effect on demand.

• Income has a positive effect on demand.

• Income has no effect on demand.

• Income has a fluctuating effect on demand.

What is the income effect in relation to demand?

• Change in price due to a change in consumer income.

• Change in consumer preferences due to a change in consumer income.

• Change in supply due to a change in consumer income.

• Change in quantity demanded due to a change in consumer income.

What is the law of diminishing marginal utility?

• The law of increasing marginal utility states that as a person consumes more units of a good or service, the additional satisfaction or utility derived from each additional unit increases.

• The law of diminishing marginal utility states that as a person consumes more units of a good or service, the additional satisfaction or utility derived from each additional unit decreases.

• The law of constant marginal utility states that as a person consumes more units of a good or service, the additional satisfaction or utility derived from each additional unit remains constant.

• The law of marginal utility states that as a person consumes more units of a good or service, the additional satisfaction or utility derived from each additional unit remains the same.

What is the difference between elastic and inelastic demand?

• The difference between elastic and inelastic demand is the time period considered for the change in price.

• The difference between elastic and inelastic demand is the responsiveness of quantity demanded to a change in income.

• The difference between elastic and inelastic demand is the responsiveness of quantity demanded to a change in price.

• The difference between elastic and inelastic demand is the availability of substitute goods.

How does the availability of substitutes affect demand?

• The availability of substitutes increases demand.

• The availability of substitutes has no effect on demand.

• The availability of substitutes fluctuates demand.

• The availability of substitutes reduces demand.