Demand And Supply For Goods And Services! Trivia Quiz

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Demand And Supply For Goods And Services! Trivia Quiz - Quiz

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Questions and Answers
  • 1. 

    Market demand is the demand of an individual consumer

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is incorrect. Market demand refers to the total demand of all consumers in a particular market for a specific product or service. It is not limited to the demand of an individual consumer.

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  • 2. 

    If a 20% change in the price of a product results in an 8% change in the quantity demanded, then the demand for the product is?

    • A.

      Elastic; 4.0

    • B.

      Inelastic; .8

    • C.

      elastic; 2.5

    • D.

      Inelastic; .4

    Correct Answer
    D. Inelastic; .4
    Explanation
    The given answer "inelastic; .4" is correct because it indicates that the demand for the product is inelastic. Inelastic demand means that a change in price has a smaller percentage change in quantity demanded. In this case, a 20% change in price results in only an 8% change in quantity demanded, indicating that the demand is not very responsive to price changes. The value of .4 represents the price elasticity of demand, which is calculated by dividing the percentage change in quantity demanded (8%) by the percentage change in price (20%).

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  • 3. 

    Which of the following has an impact on the demand elasticity of a product?

    • A.

      Availability of substitutes

    • B.

      How important the product is to the consumer (if it is a need versus a luxury item)

    • C.

      How much time a consumer has to react to the price change.

    • D.

      All of the above

    Correct Answer
    D. All of the above
    Explanation
    The demand elasticity of a product is influenced by the availability of substitutes, the importance of the product to the consumer, and the amount of time the consumer has to react to price changes. Availability of substitutes affects the elasticity as consumers can easily switch to alternatives if the price of the product increases. The importance of the product determines how sensitive consumers are to price changes, with luxury items being more elastic than necessary items. The time available for consumers to react to price changes also impacts elasticity, as consumers may have more time to adjust their consumption patterns if they are given more notice.

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  • 4. 

    Which of the following is false about demand curves?

    • A.

      They normally slope down from left to right

    • B.

      They show the relationship between price and the quantity demanded

    • C.

      They can be used to calculate a product's elasticity of demand

    • D.

      They can slope down from the right to the left

    Correct Answer
    D. They can slope down from the right to the left
    Explanation
    Demand curves represent the relationship between price and quantity demanded. They typically slope down from left to right, indicating that as price decreases, quantity demanded increases. This is because as price decreases, consumers are willing and able to purchase more of a product. Demand curves can also be used to calculate a product's elasticity of demand, which measures the responsiveness of quantity demanded to changes in price. However, demand curves cannot slope down from the right to the left as this would imply that as price increases, quantity demanded also increases, which contradicts the law of demand.

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  • 5. 

    Demand indicates how much of a product a consumer _____________  buy at a given price all other things constant.

    • A.

      Is willing and able to

    • B.

      Wants to and will

    • C.

      Wants and needs

    • D.

      Are able to

    Correct Answer
    A. Is willing and able to
    Explanation
    Demand indicates how much of a product a consumer is willing and able to buy at a given price all other things constant. This means that demand is not only about the consumer's desire or want for the product, but also their ability to purchase it. It takes into account both the consumer's willingness and their financial capability to buy the product at a specific price.

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  • 6. 

    The market demand schedule of a good reflects the demand of an individual consumer

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The market demand schedule of a good reflects the demand of multiple consumers in the market, not just an individual consumer. It represents the quantity of the good that all consumers are willing and able to buy at different price levels. It takes into account the aggregate demand from various individuals with different preferences, incomes, and tastes. Therefore, the statement that the market demand schedule reflects the demand of an individual consumer is incorrect.

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  • 7. 

    This occurs when a decrease in price increases a consumer's real income, making that consumers feel more wealthy.

    • A.

      Real wealth effect

    • B.

      Substitution effect

    • C.

      Income effect

    • D.

      Wealthy feeling

    Correct Answer
    C. Income effect
    Explanation
    The given answer explains that the occurrence happens when a decrease in price leads to an increase in a consumer's real income. This increase in real income makes the consumer feel wealthier. Therefore, the answer suggests that the phenomenon described is the income effect.

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  • 8. 

    About 90 percent of big fish- such as giant tuna, swordfish, and Chilean sea bass- are gone from the world's oceans mainly due to over fishing to satisfy demand.  In fact, at a UN summit meeting in 2002, 192 nations signed a declaration to try to restore such fish to healthy levels by 2015.  Chilean sea bass is a good example of what happened to the big fish.  Eight to ten years ago, very few people had heard of this fish.  There wasn't much demand, and it was selling at $3 to $4 a pound.  Then it became the "hot new fish."  Suddenly, Chilean sea bass was featured on thousands of restaurant menus and sold in most supermarkets.  Fishermen couldn't catch enough sea bass to keep up with the rising demand, though they tried.  They were over fishing and not giving the fish enough time to replenish their populations.  Today, even with the protection afforded by the nations signing the declaration, Chilean sea bass is so scarce that it sells for $18 to $20 a pound, and it is typically found on the menu of upscale restaurants.  At $20 per pound, the quantity demanded has decreased considerably.  Unfortunately, the species also is nearly gone from our oceans.   According to the reading, why have nearly all of the big fish gone from the world's oceans?

    • A.

      They are healthy to eat.

    • B.

      The United Nations has failed to protect them

    • C.

      High demand of these fish has led to overfishing

    • D.

      They are cheap and easy to catch

    Correct Answer
    C. High demand of these fish has led to overfishing
    Explanation
    The reading explains that nearly all of the big fish have disappeared from the world's oceans mainly due to overfishing caused by the high demand for these fish. The increased popularity and demand for certain fish, such as Chilean sea bass, led to fishermen overfishing and not allowing enough time for the fish populations to replenish. Despite efforts by the United Nations to protect these fish, the high demand has resulted in their scarcity and a significant decrease in their population.

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  • 9. 

    About 90 percent of big fish- such as giant tuna, swordfish, and Chilean sea bass- are gone from the world's oceans mainly due to over fishing to satisfy demand.  In fact, at a UN summit meeting in 2002, 192 nations signed a declaration to try to restore such fish to healthy levels by 2015.  Chilean sea bass is a good example of what happened to the big fish.  Eight to ten years ago, very few people had heard of this fish.  There wasn't much demand, and it was selling at $3 to $4 a pound.  Then it became the "hot new fish."  Suddenly, Chilean sea bass was featured on thousands of restaurant menus and sold in most supermarkets.  Fishermen couldn't catch enough sea bass to keep up with the rising demand, though they tried.  They were over fishing and not giving the fish enough time to replenish their populations.  Today, even with the protection afforded by the nations signing the declaration, Chilean sea bass is so scarce that it sells for $18 to $20 a pound, and it is typically found on the menu of upscale restaurants.  At $20 per pound, the quantity demanded has remained inelastic.  Unfortunately, the species also is nearly gone from our oceans.   How has the increase in price affected the quantity demanded for Chilean sea bass?

    • A.

      It has increased quantity demanded dramatically.

    • B.

      It has decreased quantity demanded dramatically.

    • C.

      It has not affected quantity demanded greatly.

    • D.

      It has caused a shift in the demand curve to the right

    Correct Answer
    C. It has not affected quantity demanded greatly.
    Explanation
    The increase in price for Chilean sea bass has not greatly affected the quantity demanded. Despite the significant increase in price from $3 to $4 per pound to $18 to $20 per pound, the demand for Chilean sea bass has remained relatively stable. This suggests that the demand for the fish is inelastic, meaning that consumers are willing to pay higher prices for it and continue to purchase it even at a higher cost. However, it is important to note that the species is nearly gone from the oceans, indicating that the increase in price has not been able to prevent its decline.

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  • 10. 

    A change in the price of a good or service will NOT cause that product's demand curve to shift

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    A change in the price of a good or service will not cause that product's demand curve to shift because the demand curve represents the relationship between the price of a product and the quantity demanded at each price. A change in price will lead to a movement along the demand curve, resulting in a change in quantity demanded, but it will not shift the entire curve. Shifts in the demand curve are caused by factors other than price, such as changes in consumer preferences, income, or the prices of related goods.

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  • 11. 

    The ___________is demonstrated by the fact that people will buy more hot dogs and hamburgers when the price of pizza increases. 

    • A.

      Substitution effect

    • B.

      Income effect

    • C.

      Elastic effect

    • D.

      Complementary effect

    Correct Answer
    A. Substitution effect
    Explanation
    The substitution effect is demonstrated by the fact that people will buy more hot dogs and hamburgers when the price of pizza increases. This means that as the price of pizza rises, consumers will look for alternative options that are relatively cheaper, such as hot dogs and hamburgers. This behavior is driven by the substitution effect, which refers to the tendency of consumers to substitute one good for another when there is a change in relative prices.

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  • 12. 

    About 90 percent of big fish- such as giant tuna, swordfish, and Chilean sea bass- are gone from the world's oceans mainly due to over fishing to satisfy demand.  In fact, at a UN summit meeting in 2002, 192 nations signed a declaration to try to restore such fish to healthy levels by 2015.  Chilean sea bass is a good example of what happened to the big fish.  Eight to ten years ago, very few people had heard of this fish.  There wasn't much demand, and it was selling at $3 to $4 a pound.  Then it became the "hot new fish."  Suddenly, Chilean sea bass was featured on thousands of restaurant menus and sold in most supermarkets.  Fishermen couldn't catch enough sea bass to keep up with the rising demand, though they tried.  They were over fishing and not giving the fish enough time to replenish their populations.  Today, even with the protection afforded by the nations signing the declaration, Chilean sea bass is so scarce that it sells for $18 to $20 a pound, and it is typically found on the menu of upscale restaurants.  At $20 per pound, the quantity demanded has remained inelastic.  Unfortunately, the species also is nearly gone from our oceans.   What determinant of demand caused the shift in demand for the Chilean Sea bass?

    • A.

      Income Effect

    • B.

      Substitution Effect

    • C.

      Consumer tastes and advertising

    • D.

      Inferior good effect

    Correct Answer
    C. Consumer tastes and advertising
    Explanation
    Consumer tastes and advertising caused the shift in demand for the Chilean Sea bass. As the fish gained popularity and was featured on restaurant menus and sold in supermarkets, consumer preferences shifted towards it. The increased demand led to overfishing and scarcity of the fish, resulting in a higher price. Despite the rising price, the quantity demanded remained inelastic, indicating that consumer preferences and advertising played a significant role in driving the demand for Chilean Sea bass.

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  • 13. 

    This measures the responsiveness of a consumer's quantity demanded when price changes. 

    • A.

      Ceteris Paribus

    • B.

      Income effect

    • C.

      Elasticity of Supply

    • D.

      Elasticity of demand

    Correct Answer
    D. Elasticity of demand
    Explanation
    The given correct answer is "Elasticity of demand". This concept measures how sensitive or responsive consumers are to changes in price. It quantifies the percentage change in quantity demanded for a product in response to a percentage change in its price. High elasticity of demand indicates that consumers are highly responsive to price changes, while low elasticity suggests that consumers are less responsive.

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  • 14. 

    A graphic representation of an individual's or group's demand fo a particular good at various prices is called:

    • A.

      Supply schedule

    • B.

      Supply curve

    • C.

      Complementary schedule

    • D.

      Demand Curve

    Correct Answer
    D. Demand Curve
    Explanation
    A demand curve is a graphical representation of the relationship between the price of a good and the quantity of that good that consumers are willing to buy. It shows the quantity demanded at different prices, with the price on the vertical axis and the quantity on the horizontal axis. The demand curve slopes downward from left to right, indicating that as the price of a good decreases, the quantity demanded increases, and vice versa. This curve helps in understanding the demand behavior and determining the equilibrium price and quantity in a market.

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  • 15. 

    Goods or services that are purchased and used in combination are called?

    • A.

      Partnership effect

    • B.

      Ceteris Paribus

    • C.

      Substitution Effect

    • D.

      Complementary Goods

    Correct Answer
    D. Complementary Goods
    Explanation
    Complementary goods are goods or services that are purchased and used together. They have a positive relationship, meaning that the demand for one good or service is directly related to the demand for the other. For example, if someone buys a printer, they will also need to purchase ink cartridges. The demand for ink cartridges is dependent on the demand for printers. This concept is important in understanding consumer behavior and market dynamics, as the price or availability of one good can affect the demand for its complementary good.

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  • 16. 

    According to  ____________, when prices increase quantity demanded will decrease.  In addition, when price decreases the quantity demanded will increase, all other things constant. 

    • A.

      The Law of Supply

    • B.

      Elasticity of demand

    • C.

      The Law of Demand

    • D.

      The Income effect law

    Correct Answer
    C. The Law of Demand
    Explanation
    The Law of Demand states that when prices increase, the quantity demanded will decrease, and when prices decrease, the quantity demanded will increase, all other things remaining constant. This means that there is an inverse relationship between price and quantity demanded. As prices go up, consumers are less willing or able to purchase the same quantity of a good or service. Conversely, when prices go down, consumers are more willing or able to purchase a larger quantity.

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  • 17. 

    A consumers demand of this good,_________________, will decrease as his or her income increases. 

    • A.

      Normal Good

    • B.

      Inferior Good

    • C.

      Substitute good

    • D.

      Complementary Good

    Correct Answer
    B. Inferior Good
    Explanation
    An inferior good is a type of good for which demand decreases as income increases. This means that as a consumer's income increases, they are likely to switch to higher-quality goods, making the demand for inferior goods decrease. Therefore, the correct answer for this question is "Inferior Good".

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  • 18. 

    Diego's Hummer has been parked in the garage for the past 6 months because gas prices have reached $4.00 a gallon.  He now carpools to school.  Diego's demand for gasoline is?

    • A.

      Elastic

    • B.

      Unitary elastic

    • C.

      Inelastic

    • D.

      His dad is cheap

    Correct Answer
    A. Elastic
    Explanation
    Diego's demand for gasoline is elastic. This means that a small change in gas prices will have a significant impact on the quantity of gasoline that Diego demands. Since he has chosen to carpool to school instead of using his Hummer, it suggests that he is sensitive to the high gas prices and is willing to change his behavior to reduce his consumption of gasoline.

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  • 19. 

    When Sarah graduated from college she obtained a job as an accountant and was paid $65,000 a year job.  For that reason she was able to fill up an entire room closet full of her favorite Ugg boots.  Ugh boots are what type of product for Sarah?

    • A.

      Inferior good

    • B.

      Complementary good,

    • C.

      Substitute good

    • D.

      Normal good

    Correct Answer
    D. Normal good
    Explanation
    Sarah's ability to fill up an entire room closet full of her favorite Ugg boots suggests that she has a high income and can afford to buy a large quantity of these boots. This indicates that Ugg boots are a normal good for Sarah, as her demand for them increases with her income.

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  • 20. 

    Which of the following does NOT cause a shift in a demand curve?

    • A.

      Price of related goods

    • B.

      Consumer expectations about future prices

    • C.

      Number of consumers

    • D.

      A change in the price of the good

    Correct Answer
    D. A change in the price of the good
    Explanation
    A shift in a demand curve is caused by factors other than a change in the price of the good itself. The price of related goods, consumer expectations about future prices, and the number of consumers can all influence the demand for a product and cause the demand curve to shift. However, a change in the price of the good itself would result in a movement along the demand curve, not a shift.

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  • 21. 

    Which of the following situations best illustrates the substitution effect?

    • A.

      The price of your favorite songs on I Tunes decreases, and you are able to buy two songs this week instead of the usual one song per week.

    • B.

      Alco offers a special where you buy one pair of shoes you and you get the second pair half off.

    • C.

      You planned to eat a Subway $6 footlong sandwich but the price increased to $10. You decided to go to Metro Buffet for an all you can eat lunch for $9.00

    • D.

      Your friend asked the person you wanted to go out with to prom out, so you asked someone else.

    Correct Answer
    C. You planned to eat a Subway $6 footlong sandwich but the price increased to $10. You decided to go to Metro Buffet for an all you can eat lunch for $9.00
    Explanation
    This situation best illustrates the substitution effect because the individual originally planned to buy a Subway footlong sandwich, but due to the increase in price, they decided to substitute it with a meal at Metro Buffet instead. The substitution effect occurs when a change in price leads to a change in the consumption of a substitute product or service. In this case, the higher price of the footlong sandwich led the individual to choose a cheaper alternative.

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  • 22. 

    If the demand for a product is inelastic, then a price increase will cause total revenue to________

    • A.

      Remain the same

    • B.

      Increase

    • C.

      Decrease

    • D.

      None of the options

    Correct Answer
    B. Increase
    Explanation
    If the demand for a product is inelastic, it means that the quantity demanded does not change significantly in response to a change in price. Therefore, when the price of the product is increased, the total revenue will increase as well. This is because the increase in price outweighs the decrease in quantity demanded, resulting in a higher total revenue.

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  • 23. 

    One purpose of advertising is to:

    • A.

      Shift a product's demand curve to the right (outward)

    • B.

      Shift a product's demand curve to the left (inward)

    • C.

      Make a product's demand more elastic

    • D.

      Help the consumers find the product's substitute goods.

    Correct Answer
    A. Shift a product's demand curve to the right (outward)
    Explanation
    Advertising is a marketing strategy used to promote a product or service to potential consumers. By creating awareness and generating interest, advertising aims to increase the demand for a product. When a product's demand curve is shifted to the right (outward), it means that there is an increase in demand at every price level. This can be achieved through effective advertising campaigns that attract more customers and convince them to purchase the product, ultimately leading to an upward shift in the demand curve.

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  • 24. 

    Demand for a normal good decreases as a person income increases

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is false because a normal good is one whose demand increases as a person's income increases. This is because as people earn more money, they are able to afford more goods and services, including normal goods. Therefore, the demand for normal goods typically rises with income levels.

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  • 25. 

    When the price of a haircut was raised from $12 to $16, the number of hair cuts sold each day fell from 20 to 16.  What is the elasticity of demand for haircuts.

    • A.

      Elastic

    • B.

      Inelastic

    • C.

      Unitariy elastic

    • D.

      Fantastic

    Correct Answer
    B. Inelastic
    Explanation
    The given answer "Inelastic" is correct because the change in price from $12 to $16 resulted in a decrease in the quantity demanded from 20 to 16 haircuts per day. This indicates that the percentage change in quantity demanded is less than the percentage change in price, which is characteristic of inelastic demand. Inelastic demand means that consumers are not very responsive to price changes, and a small change in price leads to a proportionally smaller change in quantity demanded.

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  • 26. 

    What would happen to the demand curve for Axe deodorant if Katy Perry, Lil Wayne, Taylor Swift, and Pitbull all announce that it is the only deodorant that they use when performing?  What would be the reason for this shift?

    • A.

      The demand curve would shift left (inwards)- substitution effect

    • B.

      The demand curve would shift right (outwards)-tastes and advertising

    • C.

      The demand curve would shift right (outward)- expectations about the future

    • D.

      The demand curve would shift left (inwards)- taste and advertising

    Correct Answer
    B. The demand curve would shift right (outwards)-tastes and advertising
    Explanation
    If Katy Perry, Lil Wayne, Taylor Swift, and Pitbull all announce that Axe deodorant is the only deodorant they use when performing, it would create a positive association and endorsement of the product. This would likely increase the perceived value and desirability of Axe deodorant among their fans and followers. As a result, more people would be inclined to purchase and use Axe deodorant, leading to an increase in demand. This shift in the demand curve to the right is due to the influence of tastes and advertising, as the endorsement by popular celebrities affects consumer preferences and perceptions.

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  • 27. 

    What would happen to the demand curve for bus tickets in a city if the price of unleaded gasoline increased to $6.25 per gallon?  What would be the reason for the shift? (NOTE: Public bus transportation does NOT use unleaded gasoline)

    • A.

      The demand curve for bus tickets would shift right (outwards)- substitution effect

    • B.

      The demand curve would shift left (inwards)- substitution effect

    • C.

      The demand curve would shift right (outwards)- consumer tastes and advertising

    • D.

      The demand curve would not shift.

    Correct Answer
    A. The demand curve for bus tickets would shift right (outwards)- substitution effect
    Explanation
    The increase in the price of unleaded gasoline would make driving a car more expensive, causing consumers to look for alternative modes of transportation. This would lead to an increase in the demand for bus tickets as people switch from driving to taking the bus. This shift in consumer behavior is known as the substitution effect.

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  • 28. 

    Many high school students would like to own an expensive sports car.  This has led to a high demand for these sports cars in the United States for teenagers. 

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement suggests that there is a high demand for expensive sports cars among high school students in the United States. However, this may not be entirely true. While some high school students may aspire to own such cars, it does not necessarily mean that there is a high demand overall. Factors such as affordability, practicality, and parental approval may limit the actual demand for these cars among teenagers. Therefore, the statement is false.

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  • 29. 

    About 90 percent of big fish- such as giant tuna, swordfish, and Chilean sea bass- are gone from the world's oceans mainly due to over fishing to satisfy demand.  In fact, at a UN summit meeting in 2002, 192 nations signed a declaration to try to restore such fish to healthy levels by 2015.  Chilean sea bass is a good example of what happened to the big fish.  Eight to ten years ago, very few people had heard of this fish.  There wasn't much demand, and it was selling at $3 to $4 a pound.  Then it became the "hot new fish."  Suddenly, Chilean sea bass was featured on thousands of restaurant menus and sold in most supermarkets.  Fishermen couldn't catch enough sea bass to keep up with the rising demand, though they tried.  They were over fishing and not giving the fish enough time to replenish their populations.  Today, even with the protection afforded by the nations signing the declaration, Chilean sea bass is so scarce that it sells for $18 to $20 a pound, and it is typically found on the menu of upscale restaurants.  At $20 per pound, the quantity demanded has remained inelastic.  Unfortunately, the species also is nearly gone from our oceans.  Why is the Chilean sea bass found only in menus for upscale restaurants?

    • A.

      Wealthy individuals like to eat healthy

    • B.

      Poor people don't like fish.

    • C.

      The Chilean sea bass has become expensive

    • D.

      The demand for the Chilean sea bass has decreased

    Correct Answer
    C. The Chilean sea bass has become expensive
    Explanation
    The Chilean sea bass has become expensive because it is scarce and in high demand. Due to overfishing and not allowing enough time for the fish population to replenish, the quantity of Chilean sea bass available has decreased. As a result, the price of the fish has increased, making it a luxury item found only on menus for upscale restaurants.

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  • 30. 

     Use the elasticity of demand equation to  calculate values of Elasticity for all the situations below:  After completing the calculations, determine which situations shows the greatest amount of price elasticity of demand.         Price                        Quantity             Price Elasticity of Demand Initial       New         Initial       New $25            30            100          40              ____A_______ $40            70            120          90              _____B______ $200          220          80            64               _____C______ $50            75            100          50             _____D______

    • A.

      A

    • B.

      B

    • C.

      C

    • D.

      D

    Correct Answer
    A. A
    Explanation
    Situation A shows the greatest amount of price elasticity of demand. This can be determined by calculating the price elasticity of demand for each situation using the formula: Price Elasticity of Demand = (Percentage Change in Quantity Demanded) / (Percentage Change in Price).

    In Situation A, the initial price is $25 and the new price is $30, resulting in a 20% increase in price. The initial quantity demanded is 100 and the new quantity demanded is 40, resulting in a 60% decrease in quantity demanded.

    Using the formula, the price elasticity of demand for Situation A is calculated as (-60% / 20% = -3).

    Comparing this to the other situations, Situation A has the highest absolute value of price elasticity of demand, indicating the greatest responsiveness of quantity demanded to changes in price.

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  • 31. 

     Use the demand elasticity equation to calculate values of Price Elasticity for all the situations below:  After completing the calculations, determine which good shows is the MOST inelastic         Price                        Quantity             Price Elasticity of Demand Initial       New         Initial       New $25            30            100          40              ____A_______ $40            70            120          90              _____B______ $200          220          80            64               _____C______ $50            75            100          50             _____D______

    • A.

      A

    • B.

      B

    • C.

      C

    • D.

      D

    Correct Answer
    B. B
    Explanation
    The price elasticity of demand is calculated by dividing the percentage change in quantity demanded by the percentage change in price. In situation B, the initial price is $40 and the new price is $70, resulting in a 75% increase in price. The initial quantity is 120 and the new quantity is 90, resulting in a 25% decrease in quantity. Therefore, the price elasticity of demand for situation B is -0.33. Since the absolute value of -0.33 is smaller than the absolute value of the price elasticity of demand in the other situations, situation B is the most inelastic.

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  • 32. 

    Which good is more likely to have an inelastic demand?

    • A.

      Cancer medication

    • B.

      McDonald's food

    • C.

      Burger King food

    • D.

      Aeropostale Jeans

    Correct Answer
    A. Cancer medication
    Explanation
    Cancer medication is more likely to have an inelastic demand because it is a necessity for individuals diagnosed with cancer. The demand for cancer medication is not likely to change significantly with changes in price because people are willing to pay a high price to save their lives or improve their health. Inelastic demand means that the quantity demanded does not respond strongly to changes in price, indicating that consumers are less sensitive to price changes for this good.

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  • 33. 

    The argument "Wall Mart" executives made in the South Park episode was that lower prices were good for society because it allowed people to buy more goods at cheaper prices.  This would lead to a higher standard of living.  This is called the________

    • A.

      Law of Supply

    • B.

      Income Effect

    • C.

      Substitution effect

    • D.

      Elasticity of demand

    Correct Answer
    B. Income Effect
    Explanation
    The correct answer is the "Income Effect." The argument made by the "Wall Mart" executives in the South Park episode suggests that lower prices benefit society by allowing people to purchase more goods at cheaper prices. This increase in purchasing power due to lower prices leads to an improvement in the standard of living, which is known as the income effect.

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  • 34. 

    Above is the MARKET demand schedule for the Samsung Galaxy cell phones at a local cell phone retailer.  Graph the demand schedule.  After graphing shows how the graph would change if the price of Apple I phones suddenly dropped below those of Samsung.

    • A.

      Graph on a separate

    • B.

      Piece of paper and move on to the next question. Click on either option to move on to the next question.

  • 35. 

    What type of goods does this cartoon show?

    • A.

      Complementary goods

    • B.

      Inferior goods

    • C.

      Substitute goods

    • D.

      Planned obsolescence goods

    Correct Answer
    A. Complementary goods
    Explanation
    The cartoon likely shows complementary goods because complementary goods are products that are typically used together or are consumed together. In the cartoon, there may be two or more items that are shown together, indicating that they are complementary and often purchased together.

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  • 36. 

    As the demand for a good increases the price will decrease

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    As the demand for a good increases, the price is expected to increase, not decrease. This is because when the demand for a good rises, there is a higher level of competition among buyers, which leads to an increase in price. Conversely, if the demand decreases, the price would typically decrease as well due to decreased competition among buyers. Therefore, the statement that the price will decrease as the demand for a good increases is false.

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  • 37. 

    How does planned obsolescence impact the demand curve?

    • A.

      It causes the demand curve to shift to the right

    • B.

      It causes the demand curve to shift to the left

    Correct Answer
    A. It causes the demand curve to shift to the right
    Explanation
    Planned obsolescence refers to the strategy of deliberately designing products with a limited lifespan to encourage consumers to replace them more frequently. This creates a higher demand for new products, causing the demand curve to shift to the right. As consumers need to replace their products more often, the demand for new products increases, leading to a higher quantity demanded at each price level. This shift in the demand curve indicates that consumers are willing to buy more of the product at any given price, ultimately benefiting the manufacturers.

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  • 38. 

    What determinant of demand caused the change in the Samsung scenario in question #1?

    • A.

      Consumer Tastes and Advertising

    • B.

      Prices of Related Goods

    • C.

      Income effect

    • D.

      Population and Demographics

    • E.

      None of the options

    Correct Answer
    B. Prices of Related Goods
    Explanation
    The change in the Samsung scenario in question #1 was caused by the determinant of demand known as "Prices of Related Goods." This means that the demand for Samsung products was influenced by the prices of other goods that are related or similar to Samsung products. If the prices of these related goods increase or decrease, it can affect the demand for Samsung products.

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  • 39. 

    When consumers earn more income, their demand for normal products will decrease. 

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    When consumers earn more income, their demand for normal products will not decrease. This is because as consumers' income increases, they have more purchasing power and are able to afford more products, including normal products. Therefore, their demand for normal products is likely to increase rather than decrease.

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  • 40. 

    For a consumer it is better to have an elastic demand for a good?

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Having an elastic demand for a good means that the quantity demanded is highly responsive to changes in price. This is beneficial for consumers because it allows them to adjust their consumption based on price fluctuations. When the price of a good increases, consumers with elastic demand are more likely to reduce their consumption or switch to a substitute, thereby minimizing the impact on their budget. On the other hand, when the price decreases, consumers with elastic demand can increase their consumption, taking advantage of the lower prices. Overall, having an elastic demand gives consumers more flexibility and control over their purchasing decisions.

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Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 21, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Mar 25, 2016
    Quiz Created by
    Historyperryhs
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