economics mr. bordelon demand review. multiple choice 1. the law of demand says a. the higher the...
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EconomicsMr. Bordelon
Demand Review
Multiple Choice1. The law of demand says
A. the higher the price, the more consumers will buy.B. the lower the price, the less consumers will buy.C. the lower the price, the more consumers will buy.D. the lower the price, the more consumers will substitute.
Multiple Choice1. The law of demand says
A. the higher the price, the more consumers will buy.B. the lower the price, the less consumers will buy.C. the lower the price, the more consumers will buy.D. the lower the price, the more consumers will substitute.
Multiple Choice2. A drop in price will
A. increase the demand for goods.B. decrease the demand for goods.C. not affect the demand for goods.D. not affect the law of demand.
Multiple Choice2. A drop in price will
A. increase the demand for goods.B. decrease the demand for goods.C. not affect the demand for goods.D. not affect the law of demand.
Multiple Choice3. Which of the following describes the
substitution effect?A. As the price of a good falls, people will substitute other products.B. As the price of a good rises, people will substitute other products.C. As demand rises, people will substitute other products.D. As demand falls, people will substitute other products.
Multiple Choice3. Which of the following describes the
substitution effect?A. As the price of a good falls, people will substitute other products.B. As the price of a good rises, people will substitute other products.C. As demand rises, people will substitute other products.D. As demand falls, people will substitute other products.
Multiple Choice4. A demand curve illustrates
A. the differences in price charged by different stores.B. the quantities demanded at each price by consumers.C. the differences in demand for different products.D. the products which are most in demand.
Multiple Choice4. A demand curve illustrates
A. the differences in price charged by different stores.B. the quantities demanded at each price by consumers.C. the differences in demand for different products.D. the products which are most in demand.
Multiple Choice5. For most goods, a rise in people’s income
means that there will beA. a substitution effect.B. a rise in prices.C. an increase in demand.D. a decrease in demand.
Multiple Choice5. For most goods, a rise in people’s income
means that there will beA. a substitution effect.B. a rise in prices.C. an increase in demand.D. a decrease in demand.
Multiple Choice6. Which of the following is NOT an example
of complements?A. skis and ski bootsB. row boat and oarsC. electric shaver and charging cordD. calculator and cell phone
Multiple Choice6. Which of the following is NOT an example
of complements?A. skis and ski bootsB. row boat and oarsC. electric shaver and charging cordD. calculator and cell phone
Multiple Choice7. Substitutes are
A. goods that are bought and used together.B. goods used in place of one another.C. goods that cannot be replaced.D. goods which cause a shift in the demand curve.
Multiple Choice7. Substitutes are
A. goods that are bought and used together.B. goods used in place of one another.C. goods that cannot be replaced.D. goods which cause a shift in the demand curve.
Multiple Choice8. If you keep buying despite a price
increase, your demand isA. elastic.B. strong.C. normal.D. inelastic.
Multiple Choice8. If you keep buying despite a price
increase, your demand isA. elastic.B. strong.C. normal.D. inelastic.
Multiple Choice9. Which of the following is an example of a
good with inelastic demand?A. life-saving medicineB. television setsC. computersD. a particular brand of chewing gum
Multiple Choice9. Which of the following is an example of a
good with inelastic demand?A. life-saving medicineB. television setsC. computersD. a particular brand of chewing gum
Multiple Choice10. Total revenue is defined as
A. the amount of profit a company makes.B. the amount of profit a company makes after paying taxes.C. the amount of money a company makes by selling its goods.D. the amount of money affected by price elasticity.
Multiple Choice10. Total revenue is defined as
A. the amount of profit a company makes.B. the amount of profit a company makes after paying taxes.C. the amount of money a company makes by selling its goods.D. the amount of money affected by price elasticity.
Key TermsYou would refer to a(n) _____ to find the
quantity that a person would purchase at each price that could be offered in a market.
Key TermsYou would refer to a demand curve to find
the quantity that a person would purchase at each price that could be offered in a market.
Key TermsFor a(n) _____, a consumer’s demand will
increase as his or her income increases.
Key TermsFor a normal good, a consumer’s demand
will increase as his or her income increases.
Key TermsThe _____ occurs when an increase in price
decreases a consumer’s real income.
Key TermsThe income effect occurs when an increase
in price decreases a consumer’s real income.
Key TermsDemand for goods that are necessities is
usually _____.
Key TermsDemand for goods that are necessities is
usually inelastic.
Key TermsIf the elasticity of demand of a good is
equal to 1, it is described as _____.
Key TermsIf the elasticity of demand of a good is
equal to 1, it is described as unitary elastic.
Key TermsAccording to the _____, when prices
increase, demand will decrease.
Key TermsAccording to the law of demand, when
prices increase, demand will decrease.
Key TermsTwo goods that are bought and used
together are _____.
Key TermsTwo goods that are bought and used
together are complements.
Key TermsInferior goodsLaw of demandElasticElasticity of demand
Main IdeasDescribe the substitution effect in your own
words, and give one example.
Main IdeasThe substitution effect occurs when a
consumer reacts to a rise in the price of one good by consuming less of that good and more of a cheaper substitute. An example is using the generic brand of a good when the name brand version goes up in price.
Main IdeaList and describe three causes for shifts in
the demand curve.
Main IdeasChange in incomeChange in consumer expecationsChange in populationChange in consumer tastes and advertising
Main IdeasWhat are four factors that affect elasticity?
Main IdeasAvailability of substitutesRelative importanceNecessity v. LuxuryPrice change over time
QuestionsWill there always be a demand for inferior
goods? How could demand for an inferior good decrease?
Agree or disagree: An increase in income will shift the demand curve for a normal good to the left.
Demand ScheduleDemand Schedule
Service
Urban Rural
10
$20
$30
$10
$20
$30
Lawn
15
8 2 82 71 42
Taxi
84
78 37 10 8 1
Hair
92
61 18 88 57 19
How many urban residents would take a taxi that costs $20?
Which service has equally low demand in both regions at $30?
Compare taxi rides. What reason could there be for such different demands in different areas?
Which service has inelastic demand in both areas?