Chapter 4 Economics Review

An increase in the price of peanut butter causes a decrease in the demand for jelly. The goods are?

Complements

6 reasons for a change in demand

Consumer income, consumer taste, substitute goods, complement goods, expectations, number of consumers

A new study finds that cell phones cause cancer. The demand for cell phones will...?

Decrease, consumer taste

A natural disaster decreases the population by 40%. Demand for chewing gum will..?

Decrease, number of consumers

What three questions determine demand elasticity

Delayed? Substitutes? Large portion of income?

The price of gas increases dramatically. What would happen to the demand for big cars? Small cars?

Demand for big cars would go down, demand for small cars would go up.

Price of eggs decreases. Demand for bacon will..?

Increase, complements

You receive a pay raise at work. Your demand for video games will..?

Increase, consumer income

A news report states that chewing gum increases IQ. Will demand increase or decrease? Why?

Increase, consumer taste

A rain storm kills 90% of the apples in the US. The demand for apples will..?

Increase, expectations

The price of Pepsi increases by 50%. The demand for Coke will..?

Increase, substitute

What is a change in quantity demand?

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

What is the big advantage of a demand curve to a demand schedule?

Show all mathmatical values

What is a change in demand?

change/shift in a markets total demand

what economic model would illustrate diminishing marginal utility?

demand curve

IN economic terms how does an All you can eat buffet stay in business?

diminishing marginal utility

Which way does the demand curve always slope?

down and to the right

What is a market demand curve?

graph showing quantity demanded at each and every price that might prevail in market

What is marginal utility?

how useful something is

Which way does the demand curve shift for an decrease in demand?

left

How do you calculate total revenue?

multiply quantity of goods sold by price of goods

What is the income effect?

portion of change in quantity demand caused by a change in consumers income when price of product changes

What is the substitution effect?

portion of change in quantity demanded thats due to a change in relative price of the good

Which way does the demand curve shift for an increase in demand?

right