Demand and Consumer Behavior Quiz

According to economists, what is demand?

• The behavior and decision-making of entire economies

• The quantity of a good that people are willing to buy at a specific price

• The ability and willingness to pay for a product

• The desire to have a particular item

What is the law of demand?

• Consumers buy less of a good when its price increases

• Consumers buy the same amount of a good when its price decreases

• Consumers buy less of a good when its price decreases

• Consumers buy more of a good when its price increases

What are the three patterns of human behavior that explain the law of demand?

• The substitution effect, the income effect, and the principle of diminishing marginal utility

• The substitution effect, the income effect, and the principle of increasing marginal utility

• The substitution effect, the wealth effect, and the principle of diminishing marginal utility

• The substitution effect, the wealth effect, and the principle of increasing marginal utility

What is the substitution effect?

• Consumers react to a decrease in prices by purchasing more of one good and less of another

• Consumers react to an increase in prices by purchasing less of one good and more of another

• Consumers react to a decrease in prices by purchasing less of one good and more of another

• Consumers react to an increase in prices by purchasing more of one good and less of another

What is the income effect?

• Consumers feel wealthier when prices are lower, leading to greater spending and increased demand

• Consumers feel poorer when prices are lower, leading to decreased spending and decreased demand

• Consumers feel poorer when prices are higher, leading to decreased spending and decreased demand

• Consumers feel wealthier when prices are higher, leading to greater spending and increased demand

What is the principle of diminishing marginal utility?

• Consumers derive the most satisfaction from their first purchase of a particular product and more if they buy the same product a second time

• Consumers derive the most satisfaction from their first purchase of a particular product and less if they buy the same product a second time

• Consumers derive the least satisfaction from their first purchase of a particular product and more if they buy the same product a second time

• Consumers derive the least satisfaction from their first purchase of a particular product and less if they buy the same product a second time

What is a demand schedule?

• A table that shows the numbers of doughnuts that students are willing and able to purchase at specific prices

• A graph that shows the relationship between price and quantity demanded

• A tool used by economists to organize data that lists the quantity of a good that people will buy at each price in the market

• A graph that shows the quantity demanded at each and every price that might be present in the market

What does a demand curve represent?

• The relationship between price and quantity demanded

• The relationship between price and consumer income

• The relationship between price and consumer taste

• The relationship between price and quantity supplied

What are the determinants of demand?

• Consumer income, consumer demand, government policies, and technological advancements

• Consumer income, consumer preference, population, expectations, and related goods or services

• Consumer income, consumer preference, government regulations, and technological advancements

• Consumer income, consumer taste, population, expectations, and related goods or services

How does a change in consumer income affect demand?

• An increase in income leads to an increase in demand, while a decrease in income leads to a decrease in demand

• An increase in income leads to an increase in demand, while a decrease in income leads to an increase in demand

• An increase in income leads to a decrease in demand, while a decrease in income leads to a decrease in demand

• An increase in income leads to a decrease in demand, while a decrease in income leads to an increase in demand