Unit 2 Quiz 1

What is the law of demand?

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

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

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

• The price of a good does not affect the quantity demanded.

Which of the following is NOT a determinant of demand?

• Consumer income

• Price of related goods

• Consumer expectations

• Production technology

What is the difference between normal goods and inferior goods?

• Normal goods are of higher quality than inferior goods.

• Demand for normal goods increases as income increases, while demand for inferior goods decreases as income increases.

• Normal goods are more expensive than inferior goods.

• Inferior goods are always substitutes for normal goods.

What happens to the demand curve when there is a change in quantity demanded?

• The demand curve shifts to the right.

• The demand curve shifts to the left.

• There is a movement along the demand curve.

• The demand curve becomes steeper.

How do consumers typically respond to changes in the price of substitutes?

• They buy more of the substitute good if its price increases.

• They buy less of the substitute good if its price decreases.

• They buy more of the substitute good if its price decreases.

• They buy less of the substitute good if its price increases.

What does a demand curve represent?

• A graphical representation of a supply schedule

• A graphical representation of a demand schedule

• A graphical representation of a production schedule

• A graphical representation of a cost schedule

How is the demand curve typically sloped?

• Upward sloping

• Horizontal

• Downward sloping

• Vertical

What relationship does the demand curve show?

• Direct relationship between price and quantity demanded

• Inverse relationship between price and quantity demanded

• No relationship between price and quantity demanded

• Proportional relationship between price and quantity demanded

What does not cause a shift in the demand curve?

• Change in consumer preferences

• Change in income levels

• Change in the price of the good

• Change in the number of buyers

What does the leftward shift of the demand curve indicate?

• Increase in demand.

• Decrease in demand.

• No change in demand.

• Increase in price.