Law of Demand

What does the law of demand tell us?

• Raising the price of a product will decrease the quantity demanded

• Raising the price of a product will increase the quantity demanded

• Lowering the price of a product will increase the quantity demanded

• Lowering the price of a product will decrease the quantity demanded

What is the relationship between price and quantity demanded according to the law of demand?

• Inversely proportional

• Constant

• Directly proportional

• Unrelated

In a formal economic sense, what does the word 'demand' refer to?

• The relationship between price and quantity demanded

• A specific quantity of a product

• The price of a product

• The relationship between supply and demand

What does the law of demand say about the relationship between price and quantity demanded?

• They are constant

• They are directly proportional

• They are inversely proportional

• They are unrelated

What is the demand curve a representation of?

• The relationship between supply and demand

• The relationship between price and quantity demanded

• The relationship between quantity demanded and supply

• The relationship between price and demand

As prices for a product decrease, demand for a product should increase..

• diminishing marginal utility

• elasticity

• income effect

• law of demand

According to the Law of Demand, when prices drop...

• demand will also drop

• demand will increase

• quantity demanded is unchanged

• supply increases

Which of the following best describes the 'law of demand'?

• When price increases, the quantity demanded decreases.

• Demand decreases for a normal good when income increases.

• Legal authorities regulate prices.

• People demand the same amount of a good no matter its price.

• Sellers set the price that demanders pay.

Which of the following could cause the shift of demand shown here?

• Buyers of Good X expect the price of Good X to decrease in the future

• An increase in the number of buyers of a good

• People do not like Good X as much as they did before

• An increase in the price of Good Y, which is a complement to good X

• An increase in income if Good X is an inferior good

Somethings have changed about how consumers buy hats, which has resulted in the change shown in the graph shown here. Which of the following changes could this graph represent?

• People like hats more than they did before, and their demand for hats has increased because of this

• There has been a decrease in the price of hats, resulting in an increase in the quantity demanded for hats

• People do not like hats as they did before, so their demand has decreased

• People do not like hats as they did before, resulting in a movement along the demand curve