Ch. 4 Demand Test Econmomics

Define Demand.

• The desire to own something and the ability to pay for it.

• The supply of goods available in the market.

• The cost of producing a good.

• The government regulation of prices.

Microeconomics is the study of:

• The behavior of individual markets and consumers

• The overall economy and large-scale economic factors

• The history of economic thought

• The role of government in the economy

Define Demand Schedule.

• A table showing the quantity demanded at different prices

• A graph showing the relationship between price and quantity demanded

• A list of factors affecting demand

• A schedule of supply quantities at various prices

Demand Schedule Graph: Which of the following best describes a demand schedule graph?

• A graph showing the relationship between price and quantity demanded

• A graph showing the relationship between supply and demand

• A graph showing the relationship between income and demand

• A graph showing the relationship between cost and production

Define Demand Curve.

• A graphical representation of the relationship between the price of a good and the quantity demanded.

• A table showing the quantity supplied at different prices.

• A curve that shows the relationship between the price of a good and the quantity supplied.

• A chart that illustrates the cost of production over time.

Define the Law of Demand.

• The Law of Demand states that, all else being equal, as the price of a product increases, quantity demanded decreases.

• The Law of Demand states that, all else being equal, as the price of a product decreases, quantity demanded decreases.

• The Law of Demand states that, all else being equal, as the price of a product increases, quantity demanded increases.

• The Law of Demand states that, all else being equal, as the price of a product decreases, quantity demanded increases.

Economists use the term “Law” because:

• It is a universally accepted principle.

• It is a legal requirement.

• It is a suggestion.

• It is a hypothesis.

What is the Market Demand Curve?

• A graphical representation of the quantity of goods that all consumers in a market are willing and able to purchase at various prices.

• A curve that shows the relationship between the price of a good and the quantity supplied by producers.

• A chart that displays the total revenue generated by a company at different price levels.

• A diagram that illustrates the cost structure of a firm in a competitive market.

Marginal Utility is defined as:

• The additional satisfaction gained from consuming one more unit of a good or service.

• The total satisfaction received from consuming a certain quantity of a good or service.

• The decrease in satisfaction as more units of a good or service are consumed.

• The cost of producing one more unit of a good or service.

Diminish Marginal Utility is defined as:

• The decrease in satisfaction or usefulness from having one more unit of the same product.

• The increase in satisfaction or usefulness from having one more unit of the same product.

• The constant satisfaction or usefulness from having one more unit of the same product.

• The satisfaction or usefulness from having one less unit of the same product.