Supply and Demand Test

The demand curve represents the purchasing behavior of

• consumers

• producers

• consumers and producers

• laborers

Which of the following summarizes the law of demand?

• When the price of a product is higher, more consumers will purchase the product.

• Inflation causes higher prices.

• When the price of a product is lower, consumers will purchase more of that product.

• Investors only care about profit.

If the price of gas goes up, there will be

• a decrease in demand for gas.

• an increase in demand for gas.

• a change to the supply curve for gas.

• no change to the demand curve for gas.

Which of the following will result in an increase in demand due to consumer expectations?

• Consumers think it will be a cold winter, so they buy more blankets.

• Producers think it will be a warm summer, so they produce more swimsuits.

• Consumers suddenly love neon, so they buy more neon shoes.

• Consumers income rises so people buy fewer inferior goods.

If the price of peanut butter decreases, then what will happen to the demand for jelly?

• There will be a decrease in demand for jelly.

• There will be an increase in demand for jelly.

• There will be an increase in demand for peanut butter.

• There will be no change to the demand curve for jelly.

What two effects help explain the downward sloping shape of the demand curve?

• Substitute and Complement Effects

• Normal and Inferior Effects

• Supply and Demand Effects

• Substitute and Income Effects

Which of the following scenarios would NOT shift the demand curve for picture frames?

• A decrease in the price of picture frames.

• A change in the price of printing photos.

• A celebrity promotes the wonders of picture frames.

• An increase in income for most picture frame purchasers.

For a normal good, when the consumer income of an economy decreases,

• fewer consumers will purchase that product.

• more consumers will purchase that product.

• the demand of that product will not change.

• none of the above are true.

On the demand curve, price and quantity demanded are

• decreasing simultaneously.

• both measured on the x-axis.

• directly related.

• indirectly (inversely) related.

Movement along the demand curve means there is a(n)

• decrease in demand.

• increase in demand.

• change in the product's price.

• change in the consumer's income.