Demand

Question 1

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

Answer 1

Demand

Question 2

One of the major factors that influence demand

Answer 2

Price

Question 3

States that when the price of a good or service falls, consumers will buy more

Answer 3

Law of Demand

Question 4

Quantity demanded and price have a ________________

Answer 4

Inverse relationship

Question 5

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

Answer 5

Demand schedule

Question 6

A table that 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

The left hand column of a demand schedule lists various ____________ of a good/service

Answer 7

Prices

Question 8

The right hand column of a demand schedule lists _______________ of a good/service at each given price

Answer 8

Quantity demanded

Question 9

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

Answer 9

Demand curve

Question 10

The demand curve should slope from the _______________ to ________________

Answer 10

Upper left; lower right

Question 11

Shows the sum of the information on the individual demand curves of all consumers in a market

Answer 11

Market demand curve

Question 12

The vertical axis of a demand curve shows _____________, while the horizontal shows _____________

Answer 12

Price; demand

Question 13

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

Answer 13

Law of diminishing marginal utility

Question 14

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 14

Income effect

Question 15

Pattern of behavior that occurs when consumers react to change in the price of a good or service by buying a substitute

Answer 15

Substitution effect

Question 16

A change in the amount of a product that consumers will buy because of a change in price

Answer 16

A change in demand

Question 17

What are the six factors that can cause a change in demand?

Answer 17

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

Question 18

Goods that consumers demand less of when their incomes rise

Answer 18

Normal goods

Question 19

Used books and generic food products

Answer 19

Inferior goods

Question 20

_________ has a strong influence on consumer tastes

Answer 20

Advertising

Question 21

Goods and services that can be used in place of other goods and services to satisfy consumer wants

Answer 21

Substitutes

Question 22

When the use of one product increases the use of another product, the two products are called _________

Answer 22

Compliments

Question 23

Economists use the term _______________ to describe how responsive consumers are to price changes in the marketplace

Answer 23

Elasticity of demand

Question 24

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

Answer 24

Elastic

Question 25

Demand is ___________ when a change in price leads to a relatively smaller change in the quantity demanded

Answer 25

Inelastic

Question 26

Elastic goods and services are often said to be ____________

Answer 26

Price sensitive

Question 27

Goods that have a larger number of substitutes fall into the _______________ category

Answer 27

Elastic

Question 28

If there are no substitutes for a good or service, demand for it tends to be _________

Answer 28

Inelastic

Question 29

Something you must have, such as food or water

Answer 29

Necessity

Question 30

Something that you desire but that is not essential to your life, such as a plasma

Answer 30

Luxury

Question 31

When you calculate elasticity and the number is ________________, it is elastic

Answer 31

Greater than 1

Question 32

When you calculate elasticity and the number is __________________, it is inelastic

Answer 32

Less than one

Question 33

When you calculate elasticity and the number is __________________, it is unit elastic

Answer 33

Equal to 1