Demand Test

Which of the following terms refers to the amount of money consumers have available to spend on products?

• Marginal power

• Purchasing power

• Income effect

• Substitution effect

As more units of a product are consumed, the satisfaction from consuming each additional unit...

• stays the same

• increases

• decreases

• Greatly increases slightly, sort of

A demand curve only displays a “snapshot” of a market because...

• prices of products often increase.

• it is based on a demand schedule.

• it represents a specific time period.

• economists cannot make long-term predictions.

Which of the following is a nonprice determinant of demand?

• consumer expectations

• consumer tastes and preferences

• prices of related goods

• prices of related consumers

Which direction will the demand curve shift if consumers’ incomes rise?

• to the right

• to the left

• It will become a circle

• There is no correlation between income and demand

A products’ demand elasticity is affected by...(choose all that are correct)

• whether or not it has available substitutes.

• whether or not it is a necessity.

• How stretchy the material is

• the portion of the consumers’ income the product’s cost represents

If substitutes are not readily available for a product, it has

• inelastic demand.

• elastic demand.

• an income effect.

• a substitution effect.

If a price increase causes a fall in total revenue, demand is...

• fluctuating.

• steady.

• elastic.

• inelastic.

Any increase or decrease in consumers’ purchasing power caused by a change in price

• demand curve

• income effect

• complementary good

• substitution effect

A product that is commonly used with other products

• substitute good

• diminishing marginal utility

• determinant of demand

• complementary good