Chapter 4 Demand

What does the figure here illustrate?

A change in demand

True or false: A change in quantity demanded happens when people buy different amounts of a product at the same price.

False

How can a change in the price of a substitute good affect demand for another good?

If a good does not have a satisfactory substitute, consumers are much less likely to switch away from the original good. If a good has a satisfactory substitute, consumers can easily switch from one good to another.

Higher prices are usually associated with smaller amounts demanded, whereas lower prices are usually associated with larger quantities demanded. This is known as the

Law of Demand.

What would happen to the market demand for a popular product if it suddenly went out of style?

Market demand for the product would decrease, shifting the market demand curve to the left.

What is marginal utility?

The additional usefulness or benefit you get from consuming or using one more unit of a good or service

What would happen to people's demand if they had a decrease in income?

Their demand curve would shift to the left because they would purchase a little less of the things they usually buy.

What would happen if people's tastes or preferences for an item suddenly increased?

Their demand curve would shift to the right. Their demand for the item would increase.

Which statement describes the difference between a change in demand and a change in quantity demanded?

There is no change in price when there is a change in demand, whereas a change in quantity demanded always involves a change in price.

What would you do if you expected the price of gasoline to go up in the next few days?

Try to fill your tank before the price went up

The only thing that can cause a change in quantity demanded is

a change in price

A change in price is the only thing that can cause

a change in quantity demanded.

If you decide to buy different amounts of a product even though the product's price did not change, this would be called a

change in demand.

The price of pizza at a local shop has not changed. However, this week you have decided to buy more than usual. This action would be described as a

change in demand.

Because market demand is the sum of all individual demands, market demand would _________ , Incorrect Unavailable if some consumers leave the market.

decrease or fall

If two goods are complements, meaning that the use of one increases the use of the other, an increase in the price of one good will

decrease the demand of its complement.

A table like this one, which shows the different amounts demanded over a possible range of prices, is called a

demand schedule.

At a given point in time, the price of a product and the quantity that someone is willing to buy are the only two variables needed to calculate

demand.

The various amounts of a product someone is willing and able to buy over a range of possible prices at one point in time is called

demand.

In economics, the term "marginal" always means ____________.

extra, additional, or incremental

The market demand for a product would ________ if more consumers entered the market.

increase or rise

The Law of Demand states that the quantity demanded varies ___________ with changes in its price.

inversely

Let's suppose that peanut butter and jelly are two complementary goods you always use together. If the price of peanut butter goes way up, you are likely to buy

less jelly.

A change in demand happens when

people decide to buy different amounts of a product even when the price of that product does not change.

At a given point in time, the calculation of demand comes down to just two variables. They are the

price of the product and the quantity that someone wants to buy at that price.

An increase in consumer income would

shift the demand curve to the right.

The term "demand" refers to

the various amounts of a product someone is willing and able to buy over a range of prices at one point in time.

Suppose that you like two soft drinks equally well. The fact that they are close substitutes for each other means that

you are more likely to switch from one to the other if one has a price change.