Quiz Chap 4 Demand

What happens to demand when a product is considered elastic?

• Quantity demanded changes little as price changes.

• Quantity demanded significantly changes as price changes.

• Demand remains constant regardless of price.

• Demand can only change in response to changes in income.

Which of the following is an example of an inelastic good?

• Coffee

• Insulin

• Soft drinks

• Televisions

What does the total revenue test measure?

• The relationship between price increases and total costs.

• The effect of consumer preferences on demand.

• The elasticity of a good based on changes in total revenue.

• The income effect on consumer purchasing behavior.

Which of the following best describes the substitution effect?

• Buying more of an item because of a rise in purchasing power.

• Switching to a different product due to a price change.

• Spending less of your income on luxury goods.

• Feeling more satisfied after consuming additional units of a good.

Define complementary goods and provide an example.

What is the law of diminishing marginal utility? Explain its significance in demand.

Explain the difference between a change in demand and a change in quantity demanded.

What factors influence the elasticity of demand for a product? Give two examples.

What is demand?

What are the six factors that affect demand?