Microeconomics Chapter 2

The relationship between price expectations and demand is

positive, when future prices rise, current demand will rise.

If Canadian consumers expect the value of the Canadian dollar to rise against the US dollar, what impact would we expect this to have on Canadians' demand for American made products?

the demand for american-made items would rise

What is the law of demand?

there is an inverse relationship between price and quantity demanded, as price increases, demand decreases

A good for which higher income causes an increase in demand is known as

a normal good

A good whose demand decreases when income rises is known as

an inferior good

If the price of shoes increases then the demand of shoelaces would _____?

decrease

As consumers consume more units of an item, the marginal benefit of each additional unit decreases at an increasing rate. This can be seen through:

demand curves that are steeper at lower quantities and flatter at higher quantities

If yogurt and smoothies are substitutes in consumption, then a rise in the price of yogurt will cause the:

demand of smoothies to increase

If a product has a large network effect, it will lead to

greater marginal benefits from using the product and increased demand for the product

A tax cut on consumer income will lead to a rise in demand for what type of good?

normal goods