Unit 3 Microeconomics

What does the Law of Demand state?

• As price increases, quantity demanded increases.

• As price decreases, quantity demanded decreases.

• As price increases, quantity demanded decreases.

• Price has no effect on quantity demanded.

What is a demand schedule?

• A graph showing total market sales.

• A table linking prices and quantities demanded.

• A list of products available in the market.

• A report on consumer preferences.

How does a decrease in price generally affect quantity demanded?

• It increases quantity demanded.

• It decreases quantity demanded.

• It has no effect on quantity demanded.

• It only affects luxury goods.

Which of the following best describes a demand curve?

• A table that shows consumer income levels.

• A graph showing how prices affect quantity demanded.

• A chart showing the relationship between supply and demand.

• A list of substitutes for a product.

What happens to the demand curve when there is an increase in demand?

• It shifts to the left.

• It remains the same.

• It shifts to the right.

• It becomes horizontal.

What does inelastic demand mean?

• Demand changes significantly with price.

• Demand remains constant despite price changes.

• Demand is only affected by luxury items.

• Demand fluctuates based on consumer income.

If two goods are substitutes, what happens when the price of one increases?

• Demand for both goods decreases.

• Demand for the other good increases.

• Demand for both goods remains the same.

• Demand for the other good decreases.

According to the Law of Supply, what happens to the quantity supplied as prices increase?

• It decreases.

• It remains the same.

• It increases.

• It becomes elastic.

What is a supply schedule?

• A list of prices in a market.

• A graph showing price trends.

• A list of quantities supplied at various prices.

• A record of consumer preferences.

If the price of t-shirts is set at $9.00 and the quantity supplied is 50, what would happen if the price decreased to $3.00?

• The quantity supplied would increase.

• The quantity supplied would decrease.

• The quantity supplied would remain the same.

• The price would stay at $9.00.