Econ chapter 4

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

Ability

Which is a likely complement to a tablet computer

Apps

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

Change in demand

What is the main cause of a change in quantity demanded

Change in price

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

Change in quantity demanded

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

Complements

A demand schedule is best described as —

Data

When the price of something increases, the quantity demanded

Decreases

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

False

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

Incentive

Portion of a change in quantity demanded caused by a change in a consumers income when the price of a product changes

Income effect

The law of demand states that the quantity demanded of a product varies — with its price

Inversely

A change in quantity demanded is represented by

Movement along the demand curve

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

Quantities demanded

Products related in such a away that an increase in the price of one increases the demand for the other

Substitutes

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

The substitution effect

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

True

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

True

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

Unit elastic

To determine elasticity, which question would an economist ask?

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

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

a product with many adequate substitutes

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

additional

What is the relationship between income and demand

an increase in income increases demand

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

because it has been demonstrated repeatedly

Prices for common vegetables tend to be elastic. Why?

because other vegetables are available

Why is the demand curve downward sloping?

because quantity demanded increases as price decreases

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 __________.

demand is elastic

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

diminishing marginal utility