Economics Demand Quiz

What is the law of demand?

• B. It states that as the price of a good increases, the quantity demanded increases

• D. It states that as the price of a good decreases, the quantity demanded increases

• C. It states that as the price of a good decreases, the quantity demanded decreases

• A. It states that as the price of a good increases, the quantity demanded decreases

What is the difference between a demand schedule and a market demand schedule?

• A. A demand schedule is for individual consumers while a market demand schedule is for all consumers in the market

• B. A demand schedule is for all consumers in the market while a market demand schedule is for individual consumers

• D. A demand schedule is for producers while a market demand schedule is for consumers

• C. There is no difference between the two

What is the income effect in relation to demand?

• A. It refers to the change in demand due to a change in the marketplace

• B. It refers to the change in demand due to a change in consumer tastes

• C. It refers to the change in demand due to a change in income

• D. It refers to the change in demand due to a change in consumer expectations

What factor affects elasticity of demand by considering the availability of substitutes?

• A. Market size

• B. Consumer tastes

• C. Substitutes

• D. Complements

What is the total revenue test used for in relation to elasticity of demand?

• D. To determine if a product is elastic or inelastic

• C. To calculate the elasticity of demand

• B. To calculate the proportion of income spent on a good or service

• A. To determine if a product is a necessity or luxury

What is the law of diminishing marginal utility?

• D. It states that the marginal benefit of each additional unit increases as each unit is used

• C. It states that as the price of a good decreases, the quantity demanded increases

• B. It states that the marginal benefit of each additional unit declines as each unit is used

• A. It states that as the price of a good increases, the quantity demanded decreases

What is the substitution effect in relation to demand?

• A. It refers to the change in demand due to a change in the marketplace

• B. It refers to the change in demand due to a change in consumer tastes

• C. It refers to the change in demand due to a change in income

• D. It refers to the change in demand due to the purchase of substitute products

What factor affects demand by considering consumer expectations about future price of items?

• C. Consumer expectations

• D. Substitutes

• B. Market size

• A. Income effect

What factor affects demand by considering the number of consumers in an area?

• D. Consumer expectations

• C. Consumer tastes

• B. Market size

• A. Income effect

What determines elasticity of demand by considering the proportion of income spent on a good or service?

• C. Whether product is a necessity or luxury

• B. Proportion of income spent on good or service

• D. Market size

• A. Availability of substitutes