Chapter 4 - Demand - Review

Sophia notices that when the price of movie tickets goes up, fewer people buy tickets. What economic principle does this illustrate?

• As price increases, quantity demanded also increases.

• As price increases, quantity demanded decreases.

• Demand remains constant regardless of price changes.

• Quantity demanded is not affected by price.

Abigail runs a small bakery and wants to understand how the price of her cupcakes affects how many customers want to buy them. What kind of curve would help Abigail see the relationship between the price of her cupcakes and the quantity customers want to buy?

• A curve that shows the relationship between price and supply.

• A curve that shows the relationship between price and quantity demanded.

• A curve that measures only consumer income.

• A curve that tracks price changes over time.

Benjamin is considering buying a new smartphone. Which of the following situations would likely cause an increase in the demand for smartphones?

• A rise in the price of a substitute good.

• A decrease in consumer income.

• A fall in the price of a complementary good.

• A decrease in consumer population.

When Henry's income increases, he starts buying less of instant noodles and opts for more expensive meals. What type of good are instant noodles in this scenario?

• A good that consumers buy less of as their income increases.

• A low-quality good.

• A good that consumers buy more of as their income increases.

• A good with no substitutes.

When the price of coffee increases, Olivia notices that tea is now relatively cheaper. How does the substitution effect influence Olivia's demand?

• Olivia buys less coffee when its price falls.

• Olivia buys more coffee as its price rises.

• Olivia buys more tea when coffee’s price rises.

• It has no effect on Olivia's demand.

If Benjamin's income increases, what is likely to happen to his demand for a normal good?

• Demand decreases.

• Demand remains the same.

• Demand increases.

• It depends on the price of substitutes.

William buys a new smartphone and notices that he needs to download several apps to make the most of his device. Which of the following best describes the relationship between smartphones and apps?

• Butter and margarine.

• Coffee and tea.

• Smartphones and apps.

• Pens and pencils.

Emma owns a coffee shop and notices that when she slightly increases the price of her coffee, the number of customers buying coffee drops significantly. What is this sensitivity of quantity demanded to a change in price called?

• The ability of demand to stay constant regardless of price.

• The sensitivity of quantity demanded to a change in price.

• The change in price due to changes in consumer income.

• The shift of the demand curve.

Emma notices that when the price of her daily coffee increases, she still buys about the same amount each week. Which of the following would indicate that her coffee has inelastic demand?

• Quantity demanded changes significantly with a price change.

• Quantity demanded does not change much with a price change.

• Quantity demanded decreases when income rises.

• Quantity demanded fluctuates rapidly with price changes.

Mia owns a coffee shop. She notices that when she raises the price of her coffee, the number of customers buying coffee drops significantly. In this case, the coffee at Mia's shop is said to have:

• Elastic demand.

• Inelastic demand.

• Unitary demand.

• Complementary demand.