Quiz 3

Question 1

A market-

Answer 1

Is an institution that brings together buyers and sellers

Question 2

The law of demand states that, other things equal,

Answer 2

Price and quantity demanded are inversely related

Question 3

The demand curve shows the relationship between-

Answer 3

Price and quantity demanded

Question 4

When the price of a product increases, a consumer is not able to buy as much of it with a given money income. This describes the-

Answer 4

Income effect

Question 5

An increase in the price of the product will reduce the amount of it purchased because-

Answer 5

Consumers will substitute other products for the one whose price has risen

Question 6

Because successive units of a good produce less and less additional satisfaction, the price must fall to encourage a buyer to purchase more units of the good. This statement is most consistent with which explanation for the law of demand?

Answer 6

Diminishing marginal utility

Question 7

Which of the following would not shift the demand of curve for beef?

Answer 7

A reduction in the price of cattle feed

Question 8

If two goods are complements,-

Answer 8

A decrease in the price of one will increase the demand for the other

Question 9

If the price of product L increases, the demand curve for close-substitute product J will-

Answer 9

Shift to the right

Question 10

College students consume a lot of Mac and ramen during college when they finish school and start careers their consumption of the goods frequently declines. Ramen noodles and boxed Mac are-

Answer 10

Inferior good