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Chapter 4 Demand
| Question | Answer |
|---|---|
| Diminishing marginal utility results from lessened​ Responses | Satisfaction |
| Which of the following replaces a costly item with a less costly one? | The substitution effect |
| A hungry man is willing to pay a high price for food. After he is no longer hungry, he is not willing to pay the same high price. Which of the following best defines this example? Responses | DIminishing Marginal utility |
| An economist performs a total expenditures test and finds that a change in price and a change in revenue move in opposite directions and concludes that the test shows ____ Responses | Demand is elastic |
| An economist performs a total expenditures test and finds that a change in price and change in revenue move in the same direction and concludes that the test shows | Demand is inelastic |
| On a demand curve, movement along the curve, as opposed to a shift in the entire curve, is a result of ___ Responses | A change in price |
| Prices for common vegetables tend to be elastic. Why? Responses | because other vegatables are available |
| Why is a demand curve downward sloping? | because quantity demanded increases as prices decreases |
| How would a negative rumor or public report about a product most likely affect the demand curve for that product? Responses | Shift left |
| Consumer Income : | When people EARN more they are usually willing to but different amounts at all possible prices |
| A decrease in consumer income would have an __________ effect ? | OPPOSITE |
| If adequate or similar substitutes are available consumers can switch back and forth between the product andd its substitute to take advantage of the best price | TRUE |
| Elastic Demand : | A change in price and a change in revenue move in opposite directions |
| Unit elastic demand: | Demand is unit elastic when a given change in price causes a proportional change in quantity demanded |
| Inelastic Demand: | A change in price and a change in revenue move in the SAME direction |
| Revenue: | Money brought in by the company |
| If the amount of income is SMALL,then demand tends to be _____ | Elastic |
| If the amount of income is LARGE,demand tends to be _____ | Inelastic |
| Demand : | The amount of product people are willing to buy at different prices |
| Microeconomics | Part of economic theory that deals with behavior and decision making by the individual units,such as people and firms |
| Law of Demand | When the price of something increases,the quantity demanded DECREASES |
| Law of Demand | When the price goes down ,buyers have an incentive to purchase more , and so the quantity demand goes UP |
| Price & Demand : | Are inversely related |
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Aliviah2345