Law of Demand

What does the Law of Demand state about the relationship between price and demand?

• Higher price means higher demand, and lower price means lower demand.

• Higher price means lower demand, and lower price means higher demand.

• Price changes do not affect demand.

• Demand changes do not affect price.

What happens to the demand curve when people's income increases?

• A) The curve shifts left

• B) The curve shifts right

• C) The curve remains stationary

• D) The curve becomes steeper

What is the effect on the demand curve when there is a decrease in people's income?

• A) The curve shifts right

• B) The curve shifts left

• C) The curve remains unchanged

• D) The curve becomes less steep

How does an increase in income affect the demand for a normal good?

• Demand decreases

• Demand remains unchanged

• Demand increases

• Demand first increases, then decreases

Which illustration depics a demand curve that consists of a point, where 3 units are demanded at a price of $9

• 
• 

Which graph depicts a supply curve?

• A

• B

• C

• D

What does the law of demand state?

• As the price of a good increases, the quantity demanded increases.

• As the price of a good decreases, the quantity demanded remains unchanged.

• As the price of a good increases, the quantity demanded decreases.

• As the price of a good decreases, the supply of the good increases.

A decrease in the price of a complement good will likely:

• Increase the demand for the original good.

• Decrease the demand for the original good.

• Have no effect on the demand for the original good.

• Increase the supply of the original good.

A decrease in the price of a complement good will likely:

• Increase the demand for the original good.

• Decrease the demand for the original good.

• Have no effect on the demand for the original good.

• Increase the supply of the original good.

What effect does an increase in consumers' income have on the demand for a normal good?

• Demand decreases.

• Demand increases.

• Demand remains unchanged.

• Demand becomes perfectly elastic.