ECON: Demand Intro

What does the law of demand state about the relationship between price and quantity demanded?

• Inverse relationship: as price increases, quantity demanded decreases

• Direct relationship: as price increases, quantity demanded also increases

• Random relationship: changes in price may or may not affect quantity demanded

• No relationship: changes in price do not affect quantity demanded

What effect describes the behavior of consumers purchasing more of a product when its price decreases due to increased purchasing power?

• Substitution effect

• Income effect

• Price effect

• Utility effect

Which of the following is NOT a shifter of demand?

• Cost of production

• Number of consumers

• Tastes and preferences

• Consumer expectations

If the price of a complement good decreases, what happens to the demand for the related good?

• It increases

• It becomes unpredictable

• It decreases

• It stays the same

What is the difference between a change in demand and a change in quantity demanded?

• There is no difference; both terms mean the same

• Change in demand is caused by price changes, while change in quantity demanded is caused by shifters

• Change in demand is caused by shifters, while change in quantity demanded is caused by price changes

• Change in demand refers to movement along the curve, change in quantity demanded refers to shifts in the curve