Econ Unit 2 Test

A product whose demand increases when consumer income rises is called a:

• Inferior good
• Elastic good
• Normal good
• Complement
• Substitute

When two goods are consumed together, like peanut butter and jelly, they are known as:

• Substitutes
• Complements
• Elastic goods
• Inferior goods
• Unrelated goods

The change in quantity demanded due to a change in consumer purchasing power is called the:

• Income effect
• Substitution effect
• Law of demand
• Elasticity effect
• Marginal utility

A graph that shows the relationship between price and quantity demanded is the:

• Demand curve
• Supply curve
• Production function
• Budget line
• Utility curve

If quantity demanded changes very little when price changes, demand is said to be:

• Elastic
• Inelastic
• Unitary elastic
• Perfectly elastic
• Excessive

A product whose demand decreases when income increases is a:

• Normal good
• Complement
• Inferior good
• Substitute
• Elastic good

According to the __________, as price decreases, quantity demanded increases.

• Law of demand
• Law of supply
• Law of elasticity
• Law of diminishing returns
• Law of cost

When the percentage change in quantity demanded equals the percentage change in price, demand is:

• Elastic
• Inelastic
• Unitary elastic
• Perfectly inelastic
• Highly elastic

If a small change in price leads to a large change in demand, the demand is:

• Elastic
• Inelastic
• Unitary elastic
• Rigid
• Fixed

The measure of how responsive consumers are to a change in price is called:

• Elasticity of demand
• Law of demand
• Income effect
• Marginal utility
• Demand curve