Microeconomics 3

What economic principle describes the inverse relationship between the price of a good and the quantity demanded by consumers?

• Law of Supply

• Law of Demand

• Law of Diminishing Marginal Utility

• Law of Equilibrium

Which of the following factors does NOT influence demand?

• Consumer preferences

• Price of the good itself

• Number of suppliers

• Income levels of consumers

When the demand for one good decreases as the price of another good increases, these goods are known as:

• Complementary goods

• Substitute goods

• Inferior goods

• Normal goods

True or False: According to the law of demand, there is a direct relationship between price and quantity demanded.

• TRUE

• FALSE

What term describes the maximum price that consumers are willing to pay for a product?

• Willingness to Pay

• Reservation Price

• Price Ceiling

• Price Floor

Which of the following is NOT a determinant of demand?

• Consumer expectations

• Price of related goods

• Technology and innovation

• Consumer income

What happens to quantity demanded when the price of a normal good increases?

• Quantity demanded increases

• Quantity demanded decreases

• Quantity demanded remains constant

What type of goods are those for which demand decreases as consumer incomes rise?

• Normal goods

• Inferior goods

• Luxury goods

• Giffen goods