Demand

Question 1

______ is the desire to have a good or service and the ability to pay for it

Answer 1

demand

Question 2

______ is one of the major factors that influences demand

Answer 2

price

Question 3

the ______ states that when the price of a good or service falls, consumers will buy more of it

Answer 3

Law of Demand

Question 4

quantity demanded and price have a ______ relationship

Answer 4

inverse

Question 5

a ______ is a table that shows how much of a good or service an individual consumer is willing and able to purchase at each price in the market

Answer 5

demand schedule

Question 6

a ______ shows how much of a good or service all consumers are willing and able to buy at each price in a market

Answer 6

market demand schedule

Question 7

a ______ is a graph that shows how much of a good or service an individual will buy at each price

Answer 7

demand curve

Question 8

a ______ shows the data found in the market demand schedule and the sum of the information on the individual demand curves of all consumers in a market

Answer 8

market demand curve

Question 9

the vertical (y) axis on the demand curve displays ______

Answer 9

prices

Question 10

horizontal (x) axis on the demand curve displays ______

Answer 10

quantities demanded

Question 11

the ______ states that the marginal benefit of using each additional unit of a product during a given period will decline

Answer 11

Law of Diminishing Marginal Utility

Question 12

the ______ is the term used for a change in the amount of a product that a consumer will buy because purchasing power of his/her income changes

Answer 12

Income effect

Question 13

the ______ is the pattern of behavior that occurs when consumers react to a change in the price of a good or service by buying a substitute product

Answer 13

substitution effect

Question 14

a change in the amount of a product that consumers will buy because of a change in price is called a change in the ______

Answer 14

quantity demanded

Question 15

change in demand is also called a ______ because it actually shifts the position of the demand curve

Answer 15

shift in demand

Question 16

six factors can cause a change in demand-

Answer 16

income, market size, consumer tastes, consumer expectations, substitute goods, and complementary goods

Question 17

______ are goods that consumers demand more of when their incomes rise

Answer 17

normal goods

Question 18

______ are goods that consumers demand less of when their incomes rise

Answer 18

inferior goods

Question 19

______ has a strong influence on consumer tastes

Answer 19

advertising

Question 20

goods and services that can be used in place of other goods and services to satisfy consumer wants are called ______

Answer 20

substitutes

Question 21

when the use of one product increases the use of another product, the two products are called ______

Answer 21

compliments

Question 22

economists use the term ______ of demand to describe how responsive consumers are to price changes in the marketplace

Answer 22

elasticity

Question 23

demand is said to be ______ when the percentage change in price and quantity demanded are the same

Answer 23

unit elastic

Question 24

three things determine unit elasticity:

Answer 24

substitute goods or services
proportion of income
necessities vs luxuries

Question 25

a ______ is something you must have, such as food or water

Answer 25

necessity

Question 26

a ______ is something that you desire but that is not essential to your life, such as a plasma television

Answer 26

luxury

Question 27

demand for luxuries tends to be ______

Answer 27

elastic

Question 28

the change in quantity demanded is smaller than the change in price, so demand for necessities is ______

Answer 28

inelastic

Question 29

demand is ______ when a change in price, either up or down, leads to a relatively larger change in the quantity demanded

Answer 29

elastic

Question 30

demand is ______ when a change in price leads to a relatively smaller change in the quantity demanded

Answer 30

inelastic