2.1 Demand

Which of these best describes the law of demand?

• if prices go up, quantity demanded will fall and if prices go down, quantity demanded will go up

• if prices go up, quantity demanded will also go up and if prices go down, quantity demanded will also go down

• there is no law of demand, each situation is unique and demand and prices cannot be predicted

• prices will go up for certain goods when quantity demanded goes up and vice versa

A change in the price of a good causes people to buy more or less of an item. This best describes the concept of

• the demand curve

• change in quantity demanded

• change in demand

• elasticity

The diagram represents a

• increase in demand
• decrease in demand

If the price of Frozen Yogurt increased then the demand for ice cream will 

• increase
• decrease

Many consumers to purchase fuel efficient cars (hybrids or electric cars). What happened to demand for Tesla electric cars? Which graph / diagram accurately displays this?

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When XYZ Telecom, a cell service provider, offered reduced rates on weekends, its volume of weekend calling increased sharply. Which graph / diagram accurately displays this?

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A sharp rise in the price of gasoline leads many consumers to reduce travel by car. What happened to demand for gasoline powered cars? Which graph / diagram accurately displays this?

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A complement example would be all except

• butter and margarine 
• peanut-butter and jelly
• flashlight and batteries 
• cameras and film 

When replacing a certain item with with a less costly item is an example of

• the substitution effect 
• the income effect 
• demand elasticity 
• complements 

when consumers have a need for a product that is urgent 

• the demand curve is inelastic 
• the demand curve is elastic 
• the demand curve is complementary 
• the demand curve is unit demand