The quantity demanded of a product increases as __________ .
A. consumer income rises
B. the prices of other products fall
C. the price of the product rises
D. the price of the product falls
The Law of Demand can be explained as __________ .
A. a lot of people wanting the same thing
B. the higher the price, the smaller the quantity demanded, ceteris paribus
C. people willing to make limited sacrifices to acquire products
D. legal reasons people make purchases in the marketplace
In considering the relationships between price and quantity demanded, ceteris paribus directs the economist to assume that __________ .
A. price increases affect quantity
B. quantity increases affect prices
C. neither price nor quantity affect demand
D. all other variables remain unchanged
When there is a change in the quantity demanded it means that __________ .
A. the hours the customer can buy products each day have increased
B. the number of products in inventory have increased
C. the quantity a consumer is willing to buy changes when the price changes
D. the selling price of the products has not changed
The market demand curve __________ .
A. shows the relationship between the price of a good and the quantity that all consumers together are willing to buy
B. is drawn assuming that variables such as income and tastes are variable
C. is drawn assuming that the number of consumers is variable
D. is drawn assuming that the selling price is fixed
Suppose that there are only three consumers of a product. At a price of $6 per unit, the first consumer would buy 12 units of the product, the second consumer would buy 8 units, and the third consumer would buy 3 units of the product. If you drew a market demand curve for this product, the quantity demanded at a price of $6 would be __________ .
A. 23 units
B. 20 units
C. 12 units
D. 11 units
When demand decreases and the demand curve shifts to the left, equilibrium price __________ and equilibrium quantity __________ .
A. increases; increases
B. increases; decreases
C. decreases; increases
D. decreases; decreases
The price elasticity of demand reflects the responsiveness of __________ .
A. firms to changes in demand
B. demand to a change in price of a substitute good
C. demand to a change in price
D. quantity demanded to a change in price
Suppose that Victoria and her friends are running a fundraiser by selling donuts. They want to know what will happen to their revenue if they increase the price of each donut from $0.80 to $1. What concept do they need to apply to find out their expected revenue?
A. price elasticity of supply
B. price elasticity of demand
C. cross elasticity of demand
D. income elasticity of demand
A good synonym for elasticity would be __________ .
A. change
B. demand
C. responsiveness
D. stickiness
The price elasticity of demand is calculated by __________ .
A. the change in price divided by the change in quantity demanded
B. the change in quantity demanded divided by the change in price
C. the percentage change in price divided by the percentage change in quantity demanded
D. the percentage change in quantity demanded divided by the percentage change in price
The ratio of the percentage change in quantity demanded to the percentage change in price is known as the __________ .
A. demand-side shift factor
B. income elasticity of demand
C. price elasticity of demand
D. cross elasticity of demand
If the price elasticity of demand is 0.5, this means that a __________ increase in price causes a __________ decrease in quantity demanded.
A. 20%; 100%
B. 30%; 15%
C. 20%; 1%
D. 5%; 1%
If the price elasticity of demand is 2, this means that a __________ increase in price causes a __________ decrease in quantity demanded.
A. 15%; 100%
B. 15%; 10%
C. 20%; 40%
D. 30%; 20%