# Economics Quiz Chapter 3

10 Questions

This quiz will be over sections 1 and 2 in chapter 3

• 1.
Explain what the difference is between demand and quantity demanded?
• 2.
Give me one example of the substitution effect.
• 3.
What is the relationship between market size and what happens to the demand of a certain product.
• 4.
The law of demand states that an increase in a good's price causes a decrease in the quantity demanded and that a decrease in price causes an increase in the quantity demanded?
• A.

True

• B.

False

• 5.
Check box all of the below examples that would be considered an Income Effect.
• A.

If the price of a CD is lowered from \$15 dollars to \$10 dollars.

• B.

If the price of a CD increases from \$15 dollars to \$18 dollars.

• C.

If you received a demotion in your job and with it come a pay cut.

• D.

If you are promoted and your boss gives you a raise which increases your pay \$1000 per week.

• E.

You are fired from your workplace and have to go on Unemployment Insurance

• 6.
Choose the best response that explains the concept of diminishing marginal utility.  Is it:
• A.

The 4th concept in the law of demands?

• B.

The satisfaction received from consuming each additional unit, as that units price declines?

• C.

I buy 4 tacos at \$1.00 a piece, because I will eat them all at one sitting?

• D.

I buy 3 tacos at \$1.00 and then buy the 4th one at \$1.50 cents as my hunger diminishes?

• 7.
Consumer demand for _____________________ products is an example of the substitution effect at work.  Generic products are _____  _________________ name products.
• 8.
The Demand curve is a chart whereas the Demand schedule is a graph that is plotted?
• A.

True

• B.

False

• 9.
If we have an increase in the demand curve (D2) we will have a shift to the right? If we have a decrease in the demand curve (D3) we will have a shift to the left?
• A.

True

• B.

False

• 10.
What was the name of the muscial group in the section under Consumer Tastes and Preferences.  They were talking about the demand curve and shifting of prices.  __________________    ___________________
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