(TMQ)Econ Quiz CH 3 Part 1 & 2 NV

What is the law of demand?

• It states that as the price of a product increases, supply also increases.

• It states that as the price of a product decreases, demand for it decreases.

• It states that as the price of a product increases, demand for it decreases.

• It states that demand is not related to the price of a product.

What are the two separate behavior patterns that overlap to form the law of demand?

• The substitution effect and the income effect.

• The supply effect and the demand effect.

• The cost effect and the benefit effect.

• The price effect and the quantity effect.

What do the substitution effect and the income effect describe in the context of the law of demand?

• The ways in which a consumer can change his or her spending patterns for other goods.

• The methods a producer uses to adjust production levels.

• The strategies a government employs to regulate the economy.

• The techniques a marketer uses to influence consumer behavior.

What occurs when consumers react to an increase in a good's price by consuming less of that good and more of other goods?

• The income effect

• The substitution effect

• The demand effect

• The price elasticity effect

What happens when a person changes his or her consumption of goods and services as a result of a change in real income?

• The substitution effect

• The demand effect

• The income effect

• The price elasticity effect

What does a market demand schedule represent?

• A. The quantity of a good a single consumer will buy at each different price.

• B. The total sales of a market over a month.

• C. The quantity of a good all consumers in a market will buy at each different price.

• D. The price at which a market will sell a good.

What type of good is one that consumers demand more of when their incomes increase?

• Inferior good

• Substitute good

• Complementary good

• Normal good

How does population change affect demand?

• It does not affect demand at all.

• It only affects the demand for luxury goods.

• Changes in population size affect the demand for most products.

• It decreases the demand for normal goods.

What is an inferior good?

• A good that consumers demand more of when their income decreases.

• A good that consumers demand more of when their income increases.

• A good that is always in high demand regardless of income changes.

• A good that is not affected by consumer expectations.

What are complements in the context of related goods?

• Goods that are used in place of one another

• Goods that are bought and used together

• Goods that are unrelated to each other

• Goods that are always expensive