Chapter 4: Microeconomics

5 Written Questions

1. goods for which the rise or fall in price greatly affects the amount of the product that people are willing to buy/demand.
2. a listing that shows the various quantities demanded of a particular product at all prices that might prevail in the market at a given time
3. as the price of a good or service falls, a larger quantity will be bought; as the price of the good or service rises a smaller quantity will be bought.
4. a decrease in the price of a good leads to an increase in the demand for its complementary good.
5. if a price change DOES NOT result in a substantial change in quantity demanded. EX: sugar, milk, salt

4 Multiple Choice Questions

1. indicates a shift in the entire demand curve to the right or left. (Right-increase.. left-decrease)
   1. demand
   2. Change in demand
   3. Change in quantity demanded
   4. law of demand
2. if the price of one similar item rises in relation to the price of another, people will substitutes the lower priced item.
   1. Substitutes
   2. Substitute effect
   3. Elastic
   4. utility
3. amount of additional satisfaction
   1. Elastic
   2. inelastic
   3. marginal utility
   4. utility
4. a graph showing the quantity demanded at each and every price that might prevail in the market.
   1. demand schedule
   2. demand curve
   3. Elastic
   4. demand

4 True/False Questions

1. utility → if a price change DOES NOT result in a substantial change in quantity demanded. EX: sugar, milk, salt

   True        False

2. Substitutes → if the price of one similar item rises in relation to the price of another, people will substitutes the lower priced item.

   True        False

3. Change in quantity demanded → indicates movement along the same demand curve to a lower or higher price and quantity demanded.

   True        False

4. demand → a graph showing the quantity demanded at each and every price that might prevail in the market.

   True        False