Demand Quiz

A graphic representation of a demand schedule is called...

• income effect

• demand

• demand curve

• market demand schedule

Which of the following best describes the Law of Demand? (2 Correct Answers)

• the quantity of a good demanded is inversely related to its price

• the quantity of a good demanded is a direct relationship to its price

• when there is an increase in price, there is a decrease in quantity demanded

• when there is an increase in price, there is an increase in quantity demanded

What is an example of the substitution effect?

• The price of cookies has increased causing the quantity demanded of milk to decrease

• The price of butter has increased causing the quantity demanded of olive oil to increase

• The baby population has increased causing an increase in the demand for baby carriages

• The advertisements of the health benefits of almonds has increased the demand for almond milk

What is the basic idea of a market economy?

• the government's role within regulating competition

• creating job security for the population

• having conglomerates take over small businesses

• the voluntary buying and selling of goods between producers and consumers

On a demand curve, the x-axis is

• the price

• the income

• the goods

• the quantity demanded

Assume bologna is an inferior good. What will happen to the demand of bologna if the income of consumers buying bologna decreases?

• the demand of bologna will stay constant

• the demand of bologna will increase

• the demand of bologna will decrease

• the demand of bologna will fluctuate

Which economic concept is defined as a situation in which the rise and fall in a good’s price greatly affects the amount that consumers are willing to buy?

• diminishing marginal utility

• elastic demand

• consumer expectations

• real income effect

The difference between a market demand curve and an individual demand curve is that the market demand curve...

• is usually much shorter than an individual demand curve

• is curved and not straight

• provides data about only one consumer

• provides data about many consumers

What is an example of diminishing marginal utility?

• buying a pack of toilet paper each month which reduces my buying satisfaction

• riding a bike to a place rather than driving a car to save on cost

• eating pizza in replacement of hot dogs due to the increase in price of hot dogs

• the price of apartments decreases making the quantity demanded to increase

Which statement is true about the real income effect?

• a raise in the price of a good increases consumers' real income

• a raise in the price of a good does not change consumers' real income

• a fall in the price of a good increases consumers' real income

• a fall in the price of a good decreases quantity demanded