Demand Quiz Flashcards
As the price goes up the quantity demand goes down; as the price goes down quantity demand goes up this represents what?
The law of demand
Why does the law of demand occur?
The substitution effect, the income effect, and the law of diminishing marginal utility
Price doesn’t affect demand, it only affects what?
Quantity demand
The more you bye have a good lesson is faction you get from what?
Each new unit
What causes shifts and demand?
Taste, preferences, fads; number of consumers, Price of related goods, income, future expectations
What happens to a curve as there are changes in price,
It remains the same
What is a normal good?
As income increases demand increases, and as income decreases demand decreases
What is an inferior good?
As income goes up demand goes down, and as income goes down demand goes up
Overtime everything becomes what?
Elastic
As price goes up the total revenue goes up; and as price goes down the total revenue goes down this represents what?
Inelasticity
As price goes up the total revenue goes down; and as price goes down the total revenue goes up this represents what?
Elasticity
A luxuries what kind of good?
Elastic
I necessity is what kind of good?
Inelastic
A good with many substitutes is what?
Elastic
A good with you substitutes is what?
Inelastic
