Question

multiple choice
identify the choice that best completes the statement or answers the question.

1. a ____ shows the quantities demanded by everyone who is interested in purchasing a product at all possible prices.

a. demand curve
b. marginal utility
c. market demand curve
d. demand schedule

1. according to the law of demand, when the price of something increases, the quantity demanded

a. reverses.
b. remains unchanged.
c. decreases.
d. increases.

1. which of the following choices could cause the shift shown in the graph?

a. a decrease in income
b. an increase in population
c. an increase in the price of a complement
d. a decrease in the price of a substitute

1. when a customers need for a product is not urgent, demand tends to be

a. complementary.
b. inelastic.
c. elastic.
d. unit elastic.

1. what do economists use to measure elasticity?

a. demand
b. utility
c. revenue
d. total expenditures

1. what is the relationship between income and demand?

a. an increase in income increases demand
b. an increase in price increases income
c. a decrease in income increases demand
d. a decrease in price decreases income

1. when you are hungry, you receive the most satisfaction from the first apple and less satisfaction from each additional apple. what explains this?

a. law of elasticity of demand
b. income effect
c. substitution effect
d. law of diminishing marginal utility

1. what are the characteristics of demand?

a. the desire, ability, and willingness to buy a product
b. the ability and willingness to buy a product
c. the willingness and desire to buy a product
d. the desire and ability to buy a product

Explanation:

1. A market - demand curve shows the quantities demanded by all interested buyers at all possible prices. A demand curve is for an individual, not all buyers. Marginal utility is the additional satisfaction from consuming one more unit. A demand schedule is a table, not a graphical representation like this.
2. The law of demand states that price and quantity demanded are inversely related. So, when price increases, quantity demanded decreases.
3. An increase in population increases the number of buyers in the market, shifting the demand curve to the right. A decrease in income shifts it left for normal goods. An increase in the price of a complement shifts it left, and a decrease in the price of a substitute shifts it left.
4. When a customer's need is not urgent, they are more responsive to price changes, so demand is elastic.
5. Economists use total expenditures (price times quantity) to measure elasticity. If total expenditures change in the opposite direction of price change, demand is elastic; if they change in the same direction, demand is inelastic; if they don't change, demand is unit - elastic.
6. For normal goods, an increase in income increases demand.
7. The law of diminishing marginal utility states that as you consume more of a good, the additional satisfaction (marginal utility) from each additional unit decreases.
8. Demand requires the desire, ability, and willingness to buy a product.

Answer:

1. c. market demand curve
2. c. decreases
3. b. an increase in population
4. c. elastic
5. d. total expenditures
6. a. an increase in income increases demand
7. d. law of diminishing marginal utility
8. a. the desire, ability, and willingness to buy a product