11) The law of demand states that
A) people demand less at lower prices.
B) the quantity demanded is directly related to price.
C) the quantity demanded is inversely related to price.
D) changes in price and changes in quantity demanded move in the same direction.
12) Which of the following is an example of the law of demand?
A) An increase in the price of magnetic optical disks is followed by a reduction in the amount of magnetic optical disks purchased.
B) An increase in the price of tablets is followed by an increase in the sale of tablets.
C) A decrease in the price of milk has no effect on the amount of milk consumed.
D) The amount of smartphones sold increases while the price of smartphones is constant.
13) According to the law of demand, an increase in the price of a good causes
A) a rightward shift of the demand curve for that good.
B) a leftward shift of the demand curve for that good.
C) an upward movement along the demand curve for that good.
D) a downward movement along the demand curve for that good.
14) The only variable that can affect a movement along the demand curve is
A) income levels.
B) the price of the good itself.
C) the number of buyers.
D) the number of substitutes.
15) The demand curve is downward sloping because
A) the price must rise to induce firms to increase quantity supplied.
B) a reduction in the price of a good causes individuals to increase their purchase of that good.
C) an increase in the price will cause a leftward shift in the demand curve.
D) all of the above.
16) The money price of a good is also known as its
A) relative price.
B) case price.
C) absolute price.
D) subjective price.
17) Suppose that the price of cornflakes is $3 per box and the price of oatmeal is $4.50 per box. Both boxes contain the same number of ounces of cereal. The relative price of cornflakes in terms of oatmeal is
18) The money price of a good is that price
A) expressed in constant 2005 dollars.
B) expressed in purchasing power against a common item like bread.
C) expressed in today's dollars.
D) that would clear the market.
19) The relative price of a good is that price
A) expressed in today's dollars.
B) expressed in constant 2012 dollars.
C) expressed in terms of the price of another good.
D) that is equal to the equilibrium price.
20) The price of a smartphone increased from $350 to $400 while the price of a smartphone app increased from $1 to $2. The relative price of smartphones in terms of smartphone apps
A) increased from 200 to 350.
B) decreased from 350 to 200.
C) increased from 0.003 to 0.05.
D) decreased from 0.35 to 0.2.