# Chapter 4: Demand

14 Questions | Total Attempts: 388

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• 1.
Why does a market demand curve show larger quantities than an individual demand curve?
• A.

A market demand curve shows the quantities demanded by all consumers, and an individual demand curve shows the quantities demanded by one consumer.

• B.

A market demand curve is based on a market demand schedule whereas an individual demand curve is based on the demand schedules of selected customers.

• C.

A market demand curve tracks many products, but an individual demand curve tracks only one product

• D.

A market demand curve gives data for all the stores in a region, but an individual demand curve gives data for only one store.

• 2.
The law of demand states that
• A.

Producers demand the highest possible price for their product and consumers demand the lowest possible price.

• B.

Producers provide only the goods and services for which there is a real consumer demand.

• C.

Only consumers who are willing and able to pay have an actual demand for a product.

• D.

When prices go down, quantity demanded increases; when prices go up, quantity demanded decreases.

• 3.
A market demand schedule shows
• A.

How many units of a product individual customers buy on a regular basis.

• B.

How much of a good or service all consumers are willing and able to buy at each price.

• C.

The cost of products and the number of units sold.

• D.

It shows how to calculate the best price to charge for a product.

• 4.
Which of the following is an example of demand?
• A.

You are calculating how much a week-long backpacking trip would cost.

• B.

You have saved \$150.00 and want to buy new shoes and accessories for the prom.

• C.

You have money for a birthday gift for a friend but can't decide what to buy.

• D.

You need a white shirt for work but only have \$5.00 on hand.

• 5.
What is the substitution effect?
• A.

The increased benefit consumers get from using different brands of the same product rather than being loyal to one

• B.

The reduced satisfaction consumers get from using a second or third unit of a product

• C.

A switch to more expensive, higher quality products when income increases

• D.

A change in the amount of a product consumers buy because they buy other similar goods

• 6.
A change in quantity demanded is
• A.

A change in the amount of a product consumers will buy because of a change in price.

• B.

A shift in the demand curve vertically or horizontally.

• C.

A change in market situations that leads to a change in availability.

• D.

A change in how much individuals will buy when the price remains the same.

• 7.
Three factors that can cause a change in demand are
• A.

Market size, consumer tastes, and advertising.

• B.

Consumer expectations, marginal utility, and substitutes.

• C.

Income, consumer tastes, and complements.

• D.

Income, substitutes, and advertising.

• 8.
What happens when the income of consumers rises?
• A.

The market size increases.

• B.

The demand for quality products decreases.

• C.

Consumers tend to buy more discounted and generic products.

• D.

Consumers usually demand more normal goods.

• 9.
Consumers' expectations about the price of a good or service will often
• A.

Influence whether a product becomes popular or not.

• B.

Influences consumers to buy substitute products.

• C.

Determine whether consumers buy products now or later.

• D.

Affect the demand for the product's complements.

• 10.
Demand for a product is inelastic when
• A.

The price rises compared to the price of substitutes.

• B.

The quantity demanded changes little as the price changes.

• C.

The product is price sensitive.

• D.

A change in price leads to a large change in the quantity demanded.

• 11.
The availability of substitutes
• A.

Produces a demand curve with a steeper slope.

• B.

Makes a product unit elastic.

• C.

Makes the demand for a product more elastic.

• D.

Leads more consumers to purchase a product.

• 12.
When the price of a good or service goes up, your demand will probably
• A.

Fall if the cost consumes a large proportion of your income.

• B.

Be inelastic if the cost consumes a large proportion of your income.

• C.

Increase if the product is inexpensive.

• D.

Increase if your income also increases.

• 13.
The demand for necessities
• A.

Varies according to price.

• B.

Remains the same no matter what the price.

• C.

Tends to be inelastic.

• D.

Is not affected by available substitutes.

• 14.
Economists measure elasticity of demand by
• A.

Compiling a seller's market demand schedule.

• B.

Plotting shifts in demand.

• C.

Calculating diminishing marginal utility.

• D.

Calculating a seller's total revenue.

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