GWC N5 Economics Demand

Which answer best describes the substitution effect?

• when consumers switch between products based on their prices
• as the price of a product decreases it becomes relatively cheaper when compared to other rival substitute goods

Ceteris paribus means

• everything changes
• some things change
• all other things remaining the same

The law of demand states

• that demand for a product varies inversely with price
• that demand for a product is unrelated to price
• that demand for a product onnly relies on price

An increase in the price of a product will cause

• a shift in demand
• an extension of demand
• a contraction along the demand curve

Effective demand is

• having enough money to buy everything you want
• having the money to pay for goods and services
• not having the money to pay for goods and services

Utility is

• the satisfaction gained from consuming goods and services
• the satisfaction from wanting goods and services
• the satisfaction from paying for goods and services

Diminishing marginal utility is

• being unhappy from consuming more goods and services
• gaining greater utility from consuming an extra unit of good or service
• marginal utility decreases as a person consumes more of a good or service in a time period.

Demand is

• being willing and able to buy at a particular price
• not being able to buy at a particular price
• being able to buy at a particular price

Consumer surplus

• is the difference between supply and demand
• This is the difference between how much a consumer would be prepared to pay and what is actually paid.
• is the difference between what a supplier is willing to sell at and what consumers pay

A decrease in the price of a product will cause

• a shift in demand
• an extension of demand
• a contraction along the demand curve