Economics Quiz

What does the term "demand" refer to in economics?

• The quantity of a product that producers are willing to sell

• The consumer’s desire and willingness to buy a product or service

• The amount of money consumers are willing to spend

• The supply of products available in the market

Which of the following factors affect demand?

• Price of the product

• Income of buyers

• Tastes or preferences

• All of the above

According to the law of demand, what happens when the price of a product increases, all else being equal?

• Demand increases

• Demand decreases

• Demand remains the same

• Demand becomes unpredictable

What is the term for goods that are often purchased together, such as pancakes and maple syrup?

• Substitute goods

• Complementary goods

• Normal goods

• Inferior goods

Which of the following is an example of an exception to the law of demand?

• Veblen goods

• Normal goods

• Inferior goods

• Complementary goods

What is the term for the relationship between the quantity demanded of one good and the price change of another?

• Price elasticity of demand

• Income elasticity of demand

• Cross elasticity of demand

• Unitary elasticity of demand

How is price elasticity of demand calculated?

• % Change in Price / % Change in Demand Quantity

• % Change in Demand Quantity / % Change in Price

• % Change in Income / % Change in Demand Quantity

• % Change in Demand Quantity / % Change in Income

What does a perfectly inelastic demand curve look like?

• Horizontal

• Vertical

• Downward sloping

• Upward sloping

Which factor does NOT affect price elasticity of demand?

• Availability of substitutes

• Urgency of the purchase

• Price of complementary goods

• Price of unrelated goods

What is the definition of "derived demand"?