Demand Quiz Review

Which of the following items is likely to have the most inelastic demand? a) Salt b) Doughnuts c) Computers d) Televisions

a) Salt

Garbage companies begin charging households more for each can of garbage they collect. Which of the following is least likely to happen as a result? a) The amount of household garbage remains the same. b) Households begin to recycle more. c) Households find more ways to reduce the amount of garbage they have. d) Households demand fewer packaging materials in the goods they buy.

a) The amount of household garbage remains the same.

Demand for insulin tends to be price-inelastic because the drug is considered a) a necessity b) a substitute c) a good value d) a useful item

a) a necessity

Demand for a product tends to be price-inelastic when the product has a) few if any substitutes b) more consumers than suppliers c) substantial market value d) fixed instead of flexible prices

a) few if any substitutes

A drop in price will a) increase the quantity demanded of goods. b) not affect the quantity demanded of goods. c) decrease the quantity demanded of goods. d) change the law of demand.

a) increase the quantity demanded of goods.

The inverse relationship between the price of a product and the quantity that consumers will buy is known as a) the law of demand b) the theory of efficient production c) the principle of fair pricing d) the concept of diminishing returns

a) the law of demand

The market demand for a good is the sum of individual demands for the good. a) true b) false

a) true

Which of the following is likely to increase the demand for peanut butter? a) Fewer children in the population b) News that insects have destroyed much of the peanut crop. c) A big increase in the price of jelly. d) A report from the Surgeon General of the United States that eating peanut butter makes people nutty.

b) News that insects have destroyed much of the peanut crop.

In economics, the term quantity demanded refers to the quantity of a good that people a) would like to consume on a given date b) will buy at a particular price at a particular time c) will buy at different prices during a given time period d) would like to have available during a given time period

b) will buy at a particular price at a particular time

Which of the following illustrates the economic meaning of demand? a) Alice orders her brother to turn down the loud music he is playing in his room. b) Rico says he wants a new pair of in-line skates but doesn't have the money right now. c) Shoes go on sale and Michael buys two pairs instead of one. d) None of the above

c) Shoes go on sale and Michael buys two pairs instead of one.

The demand for a good is elastic when a) a change in price has no effect on quantity demanded. b) the price of a complementary good changes c) a change in price has a big effect on quantity demanded. d) the demand curve shifts to the right.

c) a change in price has a big effect on quantity demanded.

Demand for automobiles tends to be price-elastic because automobiles a) have long-term value b) have few close substitutes c) are large expenditure items d) are considered luxury products

c) are large expenditure items

An increase in the price of a product will reduce the amount of it purchased because: a) supply curves are upsloping. b) the higher price means that real incomes have risen. c) consumers will substitute other products for the one whose price has risen. d) consumers substitute relatively high-priced for relatively low-priced products.

c) consumers will substitute other products for the one whose price has risen.

If consumers quickly switch to substitutes when the price of pepsi increases by only a small amount, the demand for pepsi is said to be a) static b) inelastic c) elastic d) market-driven

c) elastic

If the price of fish rises (event) in supermarkets, a) the demand curve for beef will shift to the left. b) the demand for fish will shift to the right. c) the demand curve for chicken will shift to the right. d) None of the above

c) the demand curve for chicken will shift to the right.

If your water bill increases because the price of water goes up, a) the demand for desert-type landscaping will shift to the left. b) the demand for water will shift to the left. c) the demand for desert-type landscaping will shift to the right. d) the demand for bath soap will shift to the right.

c) the demand for desert-type landscaping will shift to the right.

Recall that a change in demand is different from a change in quantity demanded. A change in demand can be caused by all of the following except a change in a) tastes, styles and preferences b) the price of other goods c) the price of the good you are buying d) change in number of buyers in the market

c) the price of the good you are buying

Substitutes are goods a) that are bought and used together. b) that cannot be replace. c) used in place of one another. d) that are inelastic.

c) used in place of one another.

Which of the following is NOT an example of complements? a) skis and ski boots b) electric shaver and charging cord c) rowboats and oars d) calculator and cell phone

d) calculator and cell phone

For most goods, a rise in people's income means that there will be a(n) a) substitution effect b) rise in prices c) decrease in demand d) increase in demand

d) increase in demand

The demand curve shows an inverse, or negative, relationship between a) elastic or inelastic prices b) price and quantity supplied c) short-run and long-run prices d) price and quantity demanded

d) price and quantity demanded

When a price rises and quantity demanded decreases, this is called the a) quantity effect. b) income effect. c) substitution effect. d) price effect.

d) price effect.

Demands differ from wants in that a) wants require a plan to acquire a good but demands require no such plan b) demands are unlimited, whereas wants are limited by income c) wants imply a decision about which demands to satisfy, while demands involve no specific plan to acquire the good. d) to have demand for a product you must have a desire, a willingness and the ability to make the purchase.

d) to have demand for a product you must have a desire, a willingness and the ability to make the purchase.