Economics Principles and Practices © 2012

Chapter 4: Demand

Self-Check Quizzes

1
In microeconomics, demand means the ______.
A)desire to have or to own a certain product
B)desire, willingness, and ability to buy something
C)area of economics that deals with small units
D)ability to determine prices and make decisions
2
Which of the following illustrates the Law of Demand?
A)People buy more of a product at a high price than at a low price.
B)Purchases increase at a mall during a sale.
C)People say they will buy less of a product if the price goes down.
D)The line on a demand curve slopes upward.
3
Joe will buy one pizza for $10, but is unwilling to buy a second pizza for the same price. This illustrates which of the following concepts?
A)law of demand
B)diminishing marginal utility
C)law of market demand curves
D)diminishing demand curve
4
When the price of Reese's Pieces goes up, consumers buy fewer Reese's Pieces and more M&Ms. This is an example of the __________.
A)substitution effect
B)income effect
C)wealth effect
D)supply effect
5
When prices fall, consumers pay less and have extra money to spend. This illustrates which of the following?
A)consumer effect
B)producer effect
C)substitution effect
D)income effect
6
The demand for VCRs has decreased because of ________.
A)advertising
B)news reports
C)changes in seasons
D)the introduction of new products
7
Expectations of future food shortages would cause all of the following events EXCEPT _________.
A)people buying more food
B)food stores charging higher prices
C)a shift to the right in the demand curve
D)a shift to the left in the demand curve
8
Which of the following statements about demand elasticity is correct?
A)If price increases and total expenditures increase, demand is inelastic.
B)If price decreases and total expenditures increase, demand is inelastic.
C)If price increases and total expenditures stay the same, demand is elastic.
D)All of the above choices are correct.
9
Which of the following questions does NOT help to determine a product's demand elasticity?
A)Is there an excise tax on the product?
B)Can the purchase be delayed?
C)Are adequate substitutes available?
D)Does the purchase use a large portion of income?
10
The demand for a product is unit elastic when the _______.
A)price goes up and the amount that consumers spend on the product go down
B)percent change in quantity demanded roughly equals the percent change in price
C)price goes up and the amount consumers spend on the product goes up
D)price goes down and the amount that consumers spend on the product goes up
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