3.1 and 3.2 Study Guide

Which of the following is NOT a demand shift?

• Tastes and Preferences

• Number of Consumers

• Prices of Related Goods

• Cost of Production

If the price of a substitute good increases, what will happen to the change in demand for the original good?

• Increase

• Decrease

• Remain unchanged

• Become elastic

If the population increases, what effect does this typically have on the change in demand?

• Increase

• Decrease

• Remain unchanged

• Become inelastic

Which of the following best describes an inferior good?

• A good for which demand decreases as consumer income rises

• A good for which demand increases as consumer income rises

• A good for which demand remains unchanged regardless of changes in consumer income

• A good for which demand is entirely dependent on its price

If the price of complementary goods decreases, what happens to the demand for the original good?

• Increases

• Decreases

• Remains unchanged

• Becomes inelastic

What defines a normal good?

• A good for which demand increase as consumer income rises

• A good for which demand decreases as consumer income rises

• A good for which demand remains unchanged regardless of changes in consumer income

• A good for which demand is entirely dependent on its price

What does "ceteris paribus" mean in economics?

• All other things being constant

• Demand and supply equilibrium

• Price elasticity of demand

• Opportunity cost concept

Does demand focus on consumers?

• True

• False

Is the demand curve downward sloping?

• True

• False

Movement along the demand curve is known as ___?

• Change in demand

• Change in quantity demanded

• Change in supply

• Change in quantity supplied