Quiz on the Law of Demand

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 decreases.

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

• The demand for a good is unrelated to its price.

Which of the following best explains why the law of demand occurs?

• Consumers want to buy more when prices are higher to ensure quality.

• Higher prices encourage consumers to find substitutes or buy less.

• Producers increase production when prices decrease.

• Consumers are unaffected by price changes when it comes to demand.

What is a "demand curve"?

• A graph showing the relationship between price and quantity supplied.

• A graph showing the relationship between price and quantity demanded.

• A curve representing consumers’ satisfaction with goods.

• A graph illustrating producers' production costs at various prices.

If the price of a product rises, what generally happens to the quantity demanded of that product?

• It stays the same.

• It increases.

• It decreases.

• It depends on the supply curve.

Which of the following is NOT a factor that shifts the demand curve?

• Changes in consumer income.

• Changes in the price of the good.

• Changes in consumer preferences.

• Changes in the prices of related goods (substitutes and complements).

Which of the following factors would cause an increase in demand for a product if consumers expect prices to rise in the future?

• Number of buyers

• Future price expectations

• Preferences

• Income

If there is an increase in consumer income, what is likely to happen to the demand for a normal good?

• Demand decreases

• Demand increases

• Demand stays the same

• Demand depends on future price expectations

When the number of buyers in a market increases, how does it typically affect demand for a product?

• Demand decreases

• Demand increases

• Demand remains unchanged

• Demand depends on preferences

How does a change in consumer preferences in favor of a particular product affect its demand?

• Demand decreases

• Demand increases

• Demand remains the same

• Demand depends on future prices

If the price of a substitute good increases, what happens to the demand for the original good?

• Demand decreases

• Demand increases

• Demand remains the same

• Demand depends on future prices