Demand Curve Quiz

What does a demand curve show?

• The relationship between price and supply

• The relationship between price and demand

• The relationship between supply and income

• The relationship between income and demand

How does the demand curve usually slope on a graph?

• Upwards from left to right

• Downwards from left to right

• Horizontally

• Vertically

What happens to the quantity demanded as the price goes down?

• It decreases

• It remains the same

• It increases

• It fluctuates

What is one explanation for the relationship between price and demand?

• The supply effect

• The income effect

• The production effect

• The cost effect

What does the income effect assume about consumers' incomes?

• They increase

• They decrease

• They remain the same

• They fluctuate

According to the income effect, what happens if the price of a good falls?

• Consumers buy less

• Consumers buy more

• Consumers' income decreases

• Consumers' income increases

What is the substitution effect?

• The effect of income changes on demand

• The effect of price changes on similar products

• The effect of supply changes on demand

• The effect of demand changes on supply

What happens to demand when the price of one product in a range of similar products is reduced?

• Demand decreases

• Demand remains the same

• Demand increases

• Demand fluctuates

What does the demand curve indicate at higher prices?

• Higher quantity demanded

• Lower quantity demanded

• Constant quantity demanded

• Fluctuating quantity demanded

What is the effect called when consumers with lower income can now buy a product due to a price fall?

• Substitution effect

• Income effect

• Price effect

• Demand effect