Chapter 2

Question 1

When info on a graph is not affected by external effects, and represents the economy at a certain point in time, it is called

Answer 1

Holding all else constant

Question 2

The delta sign represents

Answer 2

Change

Question 3

Individual demand is:

Answer 3

Choosing the best quantity to buy at a given price

Question 4

The demand curve is also

Answer 4

Marginal benefit

Question 5

The marginal benefit of an additional good brings less benefit than the previous one. This is called

Answer 5

Marginal depreciation

Question 6

The sum of the quantity at a given price for multiple people is called

Answer 6

Market demand curve

Question 7

What is the law of demand:

Answer 7

When the price falls, demand increases

Question 8

What are the two reasons for demand increase

Answer 8

1) Changing demand among existing customers
2) Changing demand from new customers

Question 9

List the 6 factors that shift demand curve: NNIPPE

Answer 9

1) Income
2) Preferences
3) Prices of related goods
4) Network Effects
5) Number and type of buyer
6) Expectations

Question 10

When you buy less of something as income has increased, this product is called (income related)

Answer 10

Inferior goods

Question 11

When your demand for a good does not change as income increases, this is called (income related)

Answer 11

Normal good (you would buy more if you had more money), like food

Question 12

Inferior/ normal goods affects demand: the factor is

Answer 12

Income

Question 13

You decide your demand for buying a car is higher because you are a dad and the commute gives you more time at home. This affects demand, and the factor is

Answer 13

Personal Preferences

Question 14

Substitute goods/ complimentary goods is an example of what factor

Answer 14

Prices of related goods

Question 15

If the price of gas goes up, the sales of cars may go down. What factor has affected the decrease in demand?

Answer 15

Prices of related goods

Question 16

If a good loses value the greater quantity, (such as a prom dress), this is an example of

Answer 16

Congestion effect

Question 17

If you don’t buy Tims coffee at $5 increase in price because it is too sweet, there is a decrease in demand, because of which factor?

Answer 17

Expectation

Question 18

If an increase in staff bring better value to the business, this is an example of what factor?

Answer 18

Network effect

Question 19

If baby boomers are reaching retirement, housing in Florida increases in demand, this is an example of which factor?

Answer 19

Number and type of people.