Unit 2 Demand, Supply, & Prices Exam

What is the study of individual markets and the behavior of consumers and firms called?

• Macroeconomics

• Microeconomics

• Sociology

• Anthropology

What term describes the desire and ability of consumers to purchase goods and services?

• Supply

• Demand

• Production

• Consumption

What term refers to the responsiveness of quantity demanded or supplied to changes in price?

• Elasticity

• Rigidity

• Flexibility

• Stability

What is demand in microeconomics?

• The amount of a product available for sale

• The price of a product

• How much people want a product or service based on the price

• The cost of producing a product

What do demand schedules show?

• The cost of producing a product

• The various quantities supplied of a product at all prices

• The various quantities demanded of a product at all prices

• The marketing strategies for a product

What is a demand curve?

• A graphical representation of supply schedules

• A graphical representation of demand schedules

• A table showing demand quantities

• A list of prices for goods

What does the Law of Demand state?

• Quantity demanded varies directly with price.

• Quantity demanded remains constant regardless of price.

• Quantity demanded varies inversely with price.

• Quantity demanded increases as price increases.

What does marginal utility describe?

• The total satisfaction from a product

• The extra usefulness for every additional unit of a product

• The cost of producing a product

• The demand for a product

What is the only factor that can change the quantity demanded according to the Law of Demand?

• Income

• Price

• Substitution

• Quality

What happens during the income effect when the price of burritos drops?

• People buy fewer burritos

• People spend more per burrito

• People have more money to buy more burritos

• People substitute burritos with pizza