Chapter 4 Review Guide - Economics

Which term refers to the usefulness or satisfaction derived by using an item?

• demand

• incentive

• quantity

• utility

Which of these names the only thing that can cause movement along a demand curve?

• unit elastic demand

• a substitution

• a change in price

• diminishing satisfaction

Diminishing marginal utility results from lessened

• income.

• satisfaction.

• demand.

• elasticity.

For which of these would a consumer be the least likely to find a substitute?

• electricity

• postal delivery

• DVD players

• fruit drinks

Which term describes a feeling of greater wealth on the part of a consumer?

• the elastic effect

• the inverse effect

• the substitution effect

• the income effect

What are the characteristics of demand?

• the desire and ability to buy a product

• the ability and willingness to buy a product

• the willingness and desire to buy a product

• the desire, ability, and willingness to buy a product

Changes in quantity demanded and changes in price have a(n) _____ relationship.

• indirect

• positive

• inverse

• neutral

A hungry man is willing to pay a high price for food. After he is no longer hungry, he is not willing to pay the same high price. Which of the following best defines this example?

• complement

• diminishing marginal utility

• unit elasticity

• the substitution effect

On a demand curve, movement along the curve, as opposed to a shift in the entire curve, is a result of ___

• a. a change in price.

• b. an increase in demand.

• c. a decrease in demand.

• d. a change in demand.

What is the income effect?

• a change in quantity demanded caused by a change in the price of the item

• a change in demand caused by substitution

• a proportional change in quantity demanded based on consumer taste

• an increase in purchase of complements based on an increase in tourism