True/False
Indicate whether the
statement is true or false.
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1.
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A demand schedule lists only prices.
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2.
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If the demand for chocolate increases, the demand curve shifts to the
left.
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3.
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In the elasticity equation, the numerator is the percentage of change in the
quantity demanded.
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4.
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If movie prices increase by 30 percent and attendance (quantity of tickets
demanded) drops by 40 percent, demand is considered inelastic.
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5.
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A demand curve is a graph that may contain a straight line that slopes downward
from left to right.
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6.
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Elasticity of demand deals with the relationship between price and quantity
demanded.
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7.
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The law of demand states that as prices rise, the quantity demanded rises
also.
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8.
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Economists state that the more utility you receive from an item, the higher
price you are willing to pay for it
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9.
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A demand schedule is a list of prices and the quantities demanded at each
price.
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10.
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As income rises, demand for normal goods rises.
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11.
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Leading experts in the field of economics can predict with certainty when an
economic event will occur.
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12.
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Pepsi and Coke can be considered substitutes.
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13.
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If DVD prices drop by 30 percent and the quantity demanded increases 60 percent,
demand is inelastic.
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14.
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Demand schedules demonstrate that as price decreases, quantity demanded always
decreases as well.
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15.
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The less time you have to respond to a price change in a good, the more likely
it is that your demand for the good is going to be inelastic.
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16.
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If demand is elastic and the price is decreased, total revenue will
increase.
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Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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17.
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The prices consumers pay are determined by
a. | chance. | c. | markets. | b. | producers. | d. | advertising. |
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18.
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A market is any place
a. | where buyers and sellers meet. | c. | with a sign designating a
store. | b. | where only sellers offer goods for sale. | d. | where fruits and vegetables are
sold. |
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19.
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In economics, demand means
a. | willingness and desire to buy a good. | c. | ability to buy a
good. | b. | willingness and ability to buy a good. | d. | willingness to buy a
good. |
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20.
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Demand curves
a. | slope upward from left to right. | c. | show a positive
relationship. | b. | slope downward from left to right. | d. | slope downward from right to
left. |
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21.
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Which of the following could increase demand for a good?
a. | higher birthrate | c. | higher prices in the future | b. | increased
immigration | d. | All of the
above |
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22.
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A shift of the demand curve represents
a. | a movement on the demand curve. | c. | a change in
demand. | b. | a change in the quantity demanded. | d. | All of the
above |
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23.
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Who determines whether a good is normal or inferior?
a. | individuals | c. | government | b. | sellers | d. | All of the
above |
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24.
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If demand for a good is elastic and its price decreases, total revenue
a. | goes up. | c. | remains the same. | b. | goes down. | d. | cannot be
predicted. |
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25.
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What will happen in the car market if consumers expect higher prices in the near
future?
a. | The demand for cars will decrease. | c. | The supply of cars will
drop. | b. | The demand for cars will increase. | d. | The demand for cars will not
change. |
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26.
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If the number of buyers in the market increases, which of the following will
happen?
a. | The supply in the market will increase. | c. | The demand in the market will
increase. | b. | The demand in the market will decrease. | d. | The supply in the market will
decrease. |
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27.
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The law of demand can be represented
a. | in picture form as a graph. | b. | in words. | c. | as a schedule
listing prices and quantities demanded. | d. | All of the
above |
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28.
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Market demand represents
a. | all individual demand curves added together. | b. | all the producers in
the market. | c. | all buyers and sellers in the market. | d. | All of the
above |
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29.
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If the demand for computers increases, the demand curve will
a. | go up. | c. | shift to the left. | b. | go down. | d. | shift to the
right. |
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30.
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If the demand curve shifts to the left, it means
a. | sellers will produce less. | c. | there is less of the
product. | b. | buyers want to buy less. | d. | there is more of the product. |
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31.
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Which of the following will not change the demand for a product?
a. | a change in the price of a substitute | b. | a change in income | c. | a change in
expectations about the future price of the product | d. | a change in the price of the
product |
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32.
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A normal good
a. | has not been damaged. | b. | will be purchased, regardless of changes in
income. | c. | will be in higher demand if a person’s income increases. | d. | will be in higher
demand if a person’s income decreases. |
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33.
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When goods are substitutes, which of the following occurs?
a. | The demand for one good moves in the opposite direction as the price of the other
good. | b. | The demand for one good moves in the same direction as the price of the other
good. | c. | The demand for one good does not affect the price of the other. | d. | The supply of one
good moves in the opposite direction as the price of the other good. |
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34.
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If there are few or no substitutes for a good, then which of the following is
true?
a. | The demand would not change. | c. | The demand would be
elastic. | b. | The supply would be elastic. | d. | The demand would be
inelastic. |
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35.
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With complementary goods, which of the following occurs?
a. | The demand for one good moves in the opposite direction as the price of the other
good. | b. | The demand for one good moves in the same direction as the price of the other
good. | c. | The demand for one good does not affect the price of the other. | d. | The supply of one
good moves in the opposite direction as the price of the other good. |
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36.
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A change in quantity demanded can be caused by
a. | income. | c. | price. | b. | preferences. | d. | price of a
substitute. |
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37.
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On a demand curve, a change in quantity demanded is represented by
a. | a shift to the left. | c. | a movement along the curve. | b. | a shift to the
right. | d. | All of the
above |
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38.
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The demand for necessities such as milk, electricity, and water is
usually
a. | elastic. | c. | unit-elastic. | b. | inelastic. | d. | None of the
above |
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39.
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Elasticity of demand measures
a. | how much buyers respond to a change in income. | b. | how much sellers
respond to a change in price. | c. | how much buyers respond to a change in
price. | d. | how much sellers respond to a change in income. |
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40.
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If a decrease in income increases the demand for a good, the good is
a. | inferior. | c. | a complement. | b. | normal. | d. | a substitute. |
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