chapter 2

What is the definition of demand?

• The ability and willingness to sell specific quantities of goods at a particular price

• The ability and willingness to buy specific quantities of goods at a particular price

• The ability and willingness to produce specific quantities of goods at a particular price

• The ability and willingness to consume specific quantities of goods at a particular price

What are economic goods?

• Intangible things (with value) that cannot be seen or touched

• Goods that are for common use and will benefit everyone

• Goods that have no production cost

• Goods of value that can be seen and touched

What does the law of demand state?

• The higher the price of a good, the lower is the quantity demanded

• The lower the price of a good, the lower is the quantity demanded

• The higher the price of a good, the higher is the quantity demanded

• The lower the price of a good, the higher is the quantity demanded

What is the relationship between the quantity of a good demanded by a single individual and its price called?

• Market demand

• Individual demand

• Cross demand

• Derived demand

What is the measure of the sensitivity/responsiveness of the quantity demanded due to a change in its price?

• Income elasticity of demand

• Cross elasticity of demand

• Supply elasticity of demand

• Price elasticity of demand

What is the degree of elasticity when a small percentage of change in the price of a good leads to a larger percentage of change in the quantity demanded?

• Perfectly inelastic demand

• Elastic demand

• Unitary elastic demand

• Inelastic demand

What is the relationship between the total quantity of a product supplied by adding all the quantities supplied by all sellers in the market and its price called?

• Market supply

• Composite demand

• Individual supply

• Joint supply

What is the measure of the sensitivity/responsiveness of the quantity supplied due to a change in the price of a product or service?

• Cross elasticity of supply

• Price elasticity of supply

• Income elasticity of supply

• Demand elasticity of supply

What is the degree of elasticity when a small percentage of change in the price of a good leads to a larger percentage of change in the quantity supplied?

• Unitary elastic supply

• Elastic supply

• Perfectly inelastic supply

• Inelastic supply

What is the ability and willingness to sell or produce a particular product and services in a given period of time at a particular price called?

• Market supply

• Market demand

• Supply

• Demand