Demand
This quiz covers Ch. 4 Key Concepts: Stock Market,Demand, Quantity Demanded vs. Demand, Shifts in Demand, Price elasticity of demand, demand determinants and the law of demand.
- 1.This occurs when a decrease in price increases a consumer's real income, making that consumers feel more wealthy.
- A.
Normal Good
- B.
Inferior Good
- C.
Substitution Effect
- D.
Complementary Good
- E.
Demand Curve
- F.
Law of Demand
- G.
Income effect
- H.
Elasticity of demand
- 2.For a ____________, a consumer's demand will increase as his or her income increases.
- A.
Normal Good
- B.
Inferior Good
- C.
Substitution Effect
- D.
Complementary Good
- E.
Demand Curve
- F.
Law of Demand
- G.
Income effect
- H.
Elasticity of demand
- 3.According to the ____________, when prices increase quantity demanded will decrease. In addition, when price decreases the quantity demanded will increase, all other things constant.
- A.
Normal Good
- B.
Inferior Good
- C.
Substitution Effect
- D.
Complementary Good
- E.
Demand Curve
- F.
Law of Demand
- G.
Income effect
- H.
Elasticity of demand
- 4.Goods or services that are purchased and used in combination.
- A.
Normal Good
- B.
Inferior Good
- C.
Substitution Effect
- D.
Complementary Good
- E.
Demand Curve
- F.
Law of Demand
- G.
Income effect
- H.
Elasticity of demand
- 5.A consumers demand of this good_________________ will decrease as his or her income increases.
- A.
Normal Good
- B.
Inferior Good
- C.
Substitution Effect
- D.
Complementary Good
- E.
Demand Curve
- F.
Law of Demand
- G.
Income effect
- H.
Elasticity of demand
- 6.This measures how a consumer's quantity demanded resopnds to a change in price.
- A.
Normal Good
- B.
Inferior Good
- C.
Substitution Effect
- D.
Complementary Good
- E.
Demand Curve
- F.
Law of Demand
- G.
Income effect
- H.
Elasticity of demand
- 7.This describes when consumers react to an increase in a good's price by consuming less of that good and more of other goods.
- A.
Normal Good
- B.
Inferior Good
- C.
Substitution Effect
- D.
Complementary Good
- E.
Demand Curve
- F.
Law of Demand
- G.
Income effect
- H.
Elasticity of demand
- 8.This is a graphic representation of an individual's or group's demand fo a particular good at various prices.
- A.
Normal Good
- B.
Inferior Good
- C.
Substitution Effect
- D.
Complementary Good
- E.
Demand Curve
- F.
Law of Demand
- G.
Income effect
- H.
Elasticity of demand
- 9.A portion of a corporate's profits padi out to stockholders is called____________
- A.
Portfolio
- B.
Share
- C.
Dividend
- D.
Capital gain
- 10.* What is a stock?
- A.
A government loan to a company
- B.
A share of ownership in a company
- C.
A share of profits given out to consumers
- D.
A company loan to consumers
- 11.*What is the stock market?
- A.
A government agency that sells U.S. treasury bonds to the public
- B.
A market where companies trade goods and services with each other
- C.
A market where companies sell goods and services to consumers
- D.
A market where companies sell shares of ownership to the public
- 12.A collection of financial assets that a person has is called?
- A.
Portfolio
- B.
Diversity
- C.
Stock holdings
- D.
Capital savings
- 13.A change in the quantity demanded is the results of a change in:
- A.
Number of people who live in an area
- B.
A change in price of a product
- C.
Tastes of consumers
- D.
Expectations about the future for consumers
- 14.The market demand schedule of a good reflects the demand of an individual consumer
- A.
True
- B.
False
- 15.The Law of diminishing maginal utility affects the consumption of all goods.
- A.
True
- B.
False
- 16.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; 1.2
- B.
Inelastic; .08
- C.
Unitariy elastic; 1.0
- D.
Elastic; 2.0
- 17.How will the total revenue of a product be affected if 3% change in the price of a product results in an 6% change in the quantity demanded?
- A.
Total revenue will not change
- B.
Total revenue will increase
- C.
Total revenue will increase initially but then begin to decrease
- D.
Total revenue will decrease
- 18.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.
Unitary elastic; 1.0
- D.
Inelastic; .4
- 19.If the demand for a product is inelasic, then a price increase will cause total revenue to________
- A.
Remain the same
- B.
Increase
- C.
Decrease
- D.
None of the above
- 20.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
- 21.Which of the following is NOT cause a shift in a demand curve?
- A.
Price of related goods
- B.
Consumer expectations about future prices
- C.
Number of consumers
- D.
The supply of a good
- 22.Which of the following situations best illustrates the substitution effect?
- A.
The price of your favorite songs an ITUNEs decreases, and you are able to buy two songs this week instaed of the usual one song per week.
- B.
Joebgen shoe's offers a special where you buy one pair of shoes you get the second pair half off.
- C.
You planned to eat a Subway $5 footlong sandwich but the price increased so you decided to go to Metro Buffet.
- D.
Your friend asked the person you wanted to go out with to prom out, so you asked someone else.
- 23.Imagine that the Ice Cream Shoppe in town sells ice cream cones that can be topped with one, two, or three scoops of ice cream. Each additional scoop increases the overall price of the ice cream cone, so the shop wants to sell as many scoops as possible. How might the shop counteract the law of diminishing marginal utility?
- A.
They may decrease the price of each additional ice cream scoop
- B.
They may increase the price of each additional ice cream scoop
- C.
They may decrease the amount of flavors that customers are offered.
- D.
They may increase the price of the cone itself.
- 24.When Sarah graduate from college she obtained a job that 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, they complement her style
- C.
Substitute good
- D.
Normal good
- 25.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
Back to top