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3.1   Demand

 

1) In economics, "demand" refers to

A) the intensity of desire for a good.

B) the amount of a good people need rather than the amount they want.

C) the satisfaction a good will provide a person.

D) how much of a good people will buy at any price during a given time period.

 

2) The concept of "demand" in economics refers to

A) the different quantities of a good or service people will buy at different possible prices.

B) the different types of goods and services that people of different income levels want to buy.

C) how changes in the prices of all goods affect people's buying behavior.

D) changes in people's consumption behavior over time.

 

3) The law of demand states that

A) consumers have unlimited demands for a good.

B) a higher price will lead to increased sales.

C) the price can never be too high for some consumers.

D) quantity demanded will vary inversely with the price of the good.

 

4) The law of demand states that

A) consumers will exhaust their incomes as they purchase goods and services at given absolute prices.

B) the quantity demanded of a good is higher at a lower relative price than at a higher relative price.

C) there is a direct positive relationship between relative price and quantity demanded.

D) if the price of a good increases both relatively and absolutely, there will be no change in quantity demanded.

5) The law of demand includes the statement "other things being equal." These other things include all of the following EXCEPT

A) the price of that good in the law of demand.

B) consumers' income.

C) consumers' tastes and preferences.

D) the number of potential buyers.

 

6) According to the law of demand, other things being equal

A) when the price a good goes up, then people buy more of that good.

B) when the price a good goes up, then people buy less of that good.

C) when people's income goes up, then they buy more of a good.

D) when people's income goes up, then they buy less of a good.

 

7) The law of demand tells us that people will buy more of a good if

A) the price of that good decreases.

B) the prices of other goods decrease.

C) people's income increases.

D) every factor that can affect people's buying decisions changes.

 

8) The law of demand is based on the observation that

A) people buy less of a product when the product becomes less fashionable.

B) people buy more of a product when the price falls.

C) people are indifferent to price changes.

D) stores go out of business if they lower prices.

 

9) Refer to the above figure. Which panel demonstrates the law of demand?

A) Panel A

B) Panel B

C) Panel C

D) Panel D

 

10) A fundamental principle in demand analysis is that a change in price leads to

A) a movement along the demand curve.

B) a rightward shift of the demand curve.

C) a leftward shift of the demand curve.

D) a complementary movement on the supply curve.

 

 

 

 

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