Economics Ch. 4
A demand schedule shows
a listing of the various quantities demanded of a particular product at all prices that might prevail in the market.
An increase in the price of cameras results in a decrease in the demand for film. The two products are
complements
An increase in the price of milk causes a decrease in the demand for cereal. The two products are
complements
Advertising, fashion trends, and new product introductions serve to
create consumer demand.
diminishing marginal utility
decline in extra satisfaction from using additional quantities of a product
The movement shown in this graph represents a change in what?
demand
For most products and services, an increase in price results in
demand for less of the product.
inelastic
describes a given change in price that causes a relatively smaller change in quantity demanded
elastic
describes change in demand when a change in price causes a relatively larger change in quantity demanded
unit elastic
describes change in demand when a given change in price causes a proportional change in quantity demanded
demand
desire, ability, and willingness to buy a product
when a customer's need for a product is not urgent, demand tends to be
elastic
demand elasticity
extent to which a change in price causes a change in quantity demanded
marginal utility
extra usefulness gained from using one more unit of a product
According to this demand curve, if the price of movie videos increases from $14 to $16, the quantity demanded will
fall from 600 to 400
If a modest price increase has little or no effect, the demand for the product is
inelastic
demand schedule
listing that shows the quantities demanded of a product at all prices
elasticity
measure of consumer responsiveness that shows how a dependent variable responds to a change in an independent variable
When a manufacturer of pain medication reduced the price of the medication by 30%, the quantity demanded increased by almost exactly 30%. Demand for the product is
unit elastic
change in demand
willingness to buy more or less of a product at the same price
In the experiment described in the passage, Noumenon Corporation was trying to determine the price that
would bring in the most money
based on the table, at what price would the market demand for burritos be 14?
$4
According to the demand curves, at a price of $20, how many more mystery novels would Kara demand than would Damien?
1 more
According to this demand curve, how many movie videos will be demanded at a price of $10?
1000
Assume that Damien and Kara are the only two people in the market for mystery novels. Based on the graphs, what would be the market quantity demanded for mystery novels at a price of $5?
15
Study the illustration. At a price of $25, how much more of the product is demanded on curve D'D' than on curve DD?
2 units
Based on this graph, how many Beanie Babies™ were demanded at a price of $6 before they became a fad?
200
Based on the table, what is the market demand for burritos at a price of $5?
8
A business doubled the price of a product in order to increase profits. Which of the following scenarios might have occurred?
A dramatic decline in revenues demonstrated the elasticity of the product.
Based on the passage and what you know about demand, why are sales of baseball cards dropping?
Baseball cards are a complement of the sport of baseball.
Which of the following choices could cause the movement shown in this graph?
a decrease in the price of cameras
On Curve A in the graph, suppose the price dropped from $10 to $7. Would quantity demanded increase or decrease and by how much?
Quantity demanded would increase by 1 unit.
Find the price of $15 on the demand schedule. What point does this price and quantity correspond to in the graph?
X
change in quantity demanded
a change that is graphically represented as movement along the demand curve
What does the movement from b' to b on the graph represent?
a decrease in demand
Which of the following choices could cause the movement shown in this graph?
a decrease in income
Which of the following events could cause the movement shown in the graph?
an increase in population
Based on this passage, McDonald's is serving rice in its Indonesian restaurants because of
an increase in the price of a substitute
income effect
change in quantity demanded because a price change altered consumers' real income
substitution effect
change in quantity demanded due to a change in the relative price of the product
Which products shown in the table are likely to have elastic demand?
fresh tomatoes, gasoline from a particular station, butter
Which products shown in the table are likely to have inelastic demand?
gasoline in general, services of medical doctors
demand curve
graph showing the quantity demanded at every price
market demand curve
illustrates the quantities demanded by everyone interested in purchasing a product
microeconomics
part of economic theory that deals with behavior and decision making by individual units
The movement in the graph shows that the quantity demanded of butter decreased because the
price of margarine decreased
substitutes
products used in place of other products
complements
products where the use of one product increases the use of another
Based on the graph, how does the market demand for concert tickets change if the price increases from $30 to $40?
quantity demanded decreases by 4,000
Law of Demand
quantity demanded of a product varies inversely with its price
The change from the old demand curve to the new demand curve shown in the table represents a
shift of the demand curve to the right.
If you were to graph this demand schedule, the demand curve would
slope downward from left to right
microeconomics
study of the economic behavior of individual units, such as people and firms
What does the movement shown on this graph represent?
the inverse relationship between price and quantity demanded
Consumers' willingness to replace a costly item with a less costly item is an example of
the substitution effect
