Economic Terms Quiz

What does Figure 1 represent in economic terms?

• A supply curve

• An indifference curve

• A demand curve

• A cost curve

According to Figure 1, what happens to the quantity of matcha demanded as the price of coffee increases?

• It increases

• It decreases

• It stays the same

• It is not related

At a price of $1.00 for coffee, how many units of coffee are demanded according to Figure 1?

• 40 units

• 80 units

• 100 units

• 200 units

What is the price of coffee when 100 units of coffee are demanded, as shown in Figure 1?

• $0.50

• $1.00

• $1.50

• $2.00

Which utility curve represents a higher level of satisfaction for the consumer in Figure 1?

• U0

• U1

• Both are equal

• Cannot be determined from the diagram

How does indifference curve U1 differ from curve U0?

• U1 corresponds to a lower level of well-being than U0.

• U1 corresponds to a higher level of well-being than U0.

• U1 corresponds to an identical level of well-being as U0.

• None of the above.

Which points generate the demand curve for coffee?

What would happen if the price of matcha were to fall?

• The quantity of coffee demanded would rise.

• The quantity of coffee demanded would remain unchanged.

• It depends on whether the substitution effect outweighs the income effect.

Which of the following statements describes the relationship between matcha and coffee?

• Complements

• Substitutes

• Luxuries

• Necessities

What is the marginal rate of substitutions when the price of coffee is $1.00 per ounce?

• -2

• 2

• -1

• 1