Chap 4 Economics

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movement along the demand curve.

A change in quantity demanded is represented by ______

data

A demand schedule is best described as _______

diminishing marginal unit

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?

demand is elastic

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 ________

Diminishing Marginal Utility

As people use more and more of a product, they encounter ____________________.

inverse

Changes in quantity demanded and changes in price have a(n) _________ relationship.

additional

Consider the term marginal utility. Which word is the best synonym for marginal?

true

Demand elasticity is the extent to which a change in price causes a change in the quantity demanded.

false

Demand is elastic when a given change in price causes a relatively smaller change in quantity demanded.

ability

Demand is the desire, ____________________, and willingness to buy a product or service.

true

Demand is unit elastic when a given change in price causes a proportional change in quantity demanded.

a product with many adequate substitutes

For which product is demand likely to be the most elastic?

change in price

On a demand curve, movement along the curve, as opposed to a shift in the entire curve, is a result of _________

incentive

Prices act as a motivating influence, or ____________________ , that causes an individual to take action.

because other vegetables are avalible

Prices for common vegetables tend to be elastic. Why?

inversely

The Law of Demand states that the quantity demanded of a product varies ____________________ with its price.

quantities demanded

The market demand curve that shows the ____________________ by everyone who is interested in purchasing a product at all possible prices.

false

The sole determinate of elasticity is the answer to this question: Can the purchase be delayed?

What portion of the consumer's income is required for the purchase?

To determine elasticity, which question would an economist ask?

false

To estimate elasticity, add the direction of a price change to the direction of the change in total revenue, or total expenditures.

direction, direction

To estimate elasticity, compare the _________ of a price change to the _________ of the change in total revenue.

the desire, ability, and willingness to buy a product

What are the characteristics of demand?

a change in quantity demanded caused by a change in consumer income

What is the income effect?

change in price

What is the main cause of a change in quantity demanded?

An increase in income increases demand.

What is the relationship between income and demand?

total expenditures

What test do economists use to measure elasticity?

decreases

When the price of something increases, the quantity demanded _______

apps

Which is a likely complement to a tablet computer?

the substitution effect

Which of the following replaces a costly item with a less costly one?

a vital medicine

Which product most likely has a demand that is inelastic?

unit elastic

Which term refers to a changing price that causes a proportional change in total revenue?

donut

Which would an economist consider a likely complement for coffee?

tea

Which would an economist consider a likely substitute for coffee?

because quantity demanded increases as price decreases

Why is a demand curve downward sloping?

because it has been demonstrated repeatedly

Why is the Law of Demand called a "law"?

demand

combination of desire, ability, and willingness to buy a product ________

change in demand

consumer demand for different amounts at every price, causing the demand curve to shift to the left or the right ________

change in demand

different amounts demanded at every price, causing the demand curve to shift to the left or the right ________

demand curve

graph showing the quantity demanded at each and every possible price that might prevail in the market at a given time ________

change in quantity demanded

movement along the demand curve showing that a different quantity is purchased in response to a change in price ________

income effect

portion of a change in quantity demanded caused by a change in a consumer's income when the price of a product changes ________

substitutes

products related in such a way that an increase in the price of one increases the demand for the other ________

complements

products related in such a way that an increase in the price of one reduces the demand for the other

complements

products related in such a way that an increase in the price of one reduces the demand for the other ________

law of demand

rule stating that more will be demanded at lower prices and less at higher prices ________

marginal utility

satisfaction or usefulness obtained from acquiring one more unit of a product ________

demand elastic

the extent to which a change in price causes a change in the quantity demanded _______

substitution effect

the portion of a change in quantity demanded caused by a change in price that makes other products more or less costly ________

inelastic

type of elasticity in which the percentage change in the independent variable (usually price) causes a less than proportionate change in the dependent variable (usually quantity demanded or supplied)


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