Topic 3 (Part 1) Test_English_SH

Match the following

• Substitute Effect

• If prices of a good increases, a consumer will spend the same amount of money, but will be able to buy less.

• Income Effect

• When something is too expensive, consumers will buy something else as a substitute.

• Demand

• Consumers want goods and can pay for them.

• Quantity Demanded

• A table that shows the demand of a good for all customers of a business.

• Market Demand Schedule

• The amount of goods that people want to buy.

According to the law of demand, if the price of an item decreases, what would generally happen to demand?

• Demand would increase.

• Demand would decrease.

• Demand would stay the same.

According to the law of demand, when the price of an item increases, what would generally happen to demand?

• Demand would increase.

• Demand would decrease.

• Demand would stay the same.

Select ALL that apply: According to the substitution effect, which of the following would be good substitutes for driving a car if gas prices gets too high.

• Flying on a plane.

• Taking the bus.

• Riding on a subway.

Examine the market demand schedule. According to the schedule, if the price of a pizza is $4.00, what is the quantity of slices of pizza that will be demanded?

• 50 slices

• 100 slices

• 150 slices

• 200 slices

• 250 slices

According to the market demand curve, at what price would a slice of pizza cost if the demanded slices of pizza per day was 100 slices?

• $6

• $5

• $4

• $3

• $2

True or False: The Y-axis for a demand curve will always be the quantity demanded.

• True

• False

True or False: the X-axis for a demand curve will always be the quantity demanded.

• True

• False

Match the following

• Substitutes

• The reason why demand shifts or changes.

• Inferior goods

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

• Non-Price Determinants

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

• Complements

• Goods that are used in place of one another.

• Normal Good

• Two goods that are bought and used together.

Match the following

• Consumer Tastes and Advertising

• What someone knows about the future can affect demand for certain goods today.

• Price of Related Goods

• Advertising and trends people see online and in public will influence what they will want and like.

• Changes in Income

• The characteristics of a population (age, race, gender, occupation, income level).

• Demographics

• Demand for one good can shift because of the demand of another good.

• Consumer expectations

• Our income affects demand for most goods and services.