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Economics Quiz Chapter 3

10 Questions
Economics Quizzes & Trivia

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

Questions and Answers
  • 1. 
  • 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.  __________________    ___________________