Demand Law Quiz

What does the law of demand state about the relationship between price and quantity demanded?

• As price increases, quantity demanded increases.

• As price decreases, quantity demanded remains unchanged.

• As price increases, quantity demanded decreases.

• There is no relationship between price and quantity demanded.

What happens to the demand curve when there is an increase in consumers' income, assuming the good is normal?

• The demand curve shifts to the left.

• The demand curve shifts to the right.

• The demand curve becomes steeper.

• The demand curve becomes flatter.

If the price of a substitute good increases, what happens to the demand for the original good?

• It decreases.

• It increases.

• It remains unchanged.

• It becomes unpredictable.

How does the introduction of a complementary good affect the demand for an original good?

• Demand for the original good decreases.

• Demand for the original good increases.

• Demand for the original good remains unchanged.

• Demand for the original good becomes unpredictable.

What is meant by a "shift in the demand curve"?

• A movement along the demand curve due to a change in quantity demanded.

• A rotation of the demand curve due to a change in price.

• A movement of the demand curve to the left or right due to a change in factors other than price.

• A change in the slope of the demand curve due to technological advancements.

Which factor does NOT cause a shift in the demand curve?

• Change in income.

• Change in the price of the good itself.

• Change in consumer preferences.

• Change in the price of related goods.

What is the income effect in the context of the law of demand?

• The change in demand for a good due to a change in the good's price.

• The change in demand for a good due to a change in consumers' income.

• The change in quantity demanded when a consumer's income increases.

• The change in quantity demanded due to changes in the prices of all goods.

If two goods are substitutes, what is likely to happen if the price of one good increases?

• The demand for the other good decreases.

• The demand for the other good increases.

• The demand for both goods increases.

• The demand for both goods decreases.

What does it mean if two goods are complementary?

• The goods can be used in place of each other.

• The use of one good increases the use of the other.

• The goods have no relationship with each other.

• The increase in the price of one good will increase the demand for the other.

How does a decrease in the price of a good affect the quantity demanded, according to the law of demand?

• Quantity demanded remains unchanged.

• Quantity demanded decreases.

• Quantity demanded increases.

• The effect on quantity demanded is unpredictable.