Econ Demand Quiz

What is the law of demand?

• There is a direct relationship between price and quantity demanded

• There is an inverse relationship between price and quantity demanded

• There is no relationship between price and quantity demanded

• The relationship between price and quantity demanded is unpredictable

What causes the demand curve to shift to the right?

• Positive change in taste and preferences

• Increase in price of related goods

• Decrease in number of consumers

• Decrease in income for normal goods

What is the substitution effect in relation to demand?

• When the price of a substitute product goes up, the demand for the original product goes down

• When the price of a substitute product goes down, the demand for the original product goes down

• When the price of a substitute product goes up, the demand for the original product goes up

• When the price of a substitute product goes down, the demand for the original product goes up

What is the income effect in relation to demand?

• When income increases, demand for normal goods decreases

• When income decreases, demand for inferior goods increases

• When income increases, demand for normal goods increases

• When income decreases, demand for inferior goods decreases

What is the law of diminishing marginal utility?

• As consumption increases, the additional satisfaction decreases

• As consumption increases, the additional satisfaction increases

• As consumption decreases, the additional satisfaction decreases

• As consumption decreases, the additional satisfaction increases

What causes a movement along the demand curve?

• Change in number of consumers

• Change in income

• Change in price

• Change in taste and preferences

What happens to demand when the price of a product decreases?

• Demand increases

• Demand stays the same

• Demand becomes unpredictable

• Demand decreases

What is a determinant of demand related to the number of consumers?

• Change in expectations

• Change in income

• Change in the number of consumers

• Change in taste and preferences

What causes the demand curve to shift to the left?

• Increase in income for normal goods

• Increase in price of related goods

• Increase in number of consumers

• Positive change in taste and preferences

What is the reason for the law of demand?

• Substitution effect

• Income effect

• Law of diminishing marginal utility

• Inverse relationship between price and quantity demanded