Supply and Demand (EPF 4)

If income decreases and consumers purchase more of a product, the product is considered to be a/an ___________

(a)  

• inferior good
• normal good
• superior good

With inelastic demand, consumers are relatively ______________ to changes in prices.

(a)  

• insensitive
• sensitive

With elastic demand, the percentage change in quantity is _____________ the percentage change in price.

(a)  

• larger than
• smaller than
• the same as

When quantity demanded is less than quantity supplied, price will _______________

(a)  

• fall
• rise
• remain the same

When quantity demanded is less than quantity supplied, price will fall causing quantity demanded to _________

(a)  

• increase
• decrease
• remain the same

When quantity demanded is less than quantity supplied, price will fall causing quantity demanded to increase and quantity supplied to ___________.

(a)  

• decrease
• increase
• remain the same

The relationship between price and quantity demanded typically is _______________.

(a)  

• inverse
• positive
• direct

If trumpets are normal goods, what will happen to price of trumpets when income in the economy increases.

• Price increases

• Price decreases

• Price remains the same

If trumpets are normal goods, explain what will happen to the quantity of trumpets when income in the economy increases.

• Quantity increases

• Quantity decreases

• Quantity remains the same

Many new trumpet producers enter into the market. What will happen to the price of trumpets in the market?

• price falls
• price increases
• price remains the same