Economics Chapter 03

Demand is considered inelastic if a rise in price results in a large drop in demand.

As price increases, supply increases, but demand decreases.

Economists use the concept of marginal utility to help explain consumers' spending patterns.

The quantity demanded varies with the price of an item.

The Law of Demand states that buyers will purchase

Price varies inversely with changes in supply.

In an actual economy, the conditions of perfect competition are usually met.

Storekeepers will lower their prices when they want to clear out merchandise.

Products/services considered a luxury by a large number of consumers will be subject to

If fewer people want a product while its supply remains constant, suppliers must

Relatively elastic demand refers to a situation in which a drop in the price of an item causes

Demand for gasoline as a fuel for automobiles is considered to be elastic.

Supply is inelastic if a change in price causes a larger percentage change in supply.

As demand decreases, so does the market price.

Which of the following statements is not true about a demand curve?

What are considered luxuries by one person may be normal expenses to another person.

People will not buy something if they expect the purchase to yield them more satisfaction.

The supply of some commodities is more sensitive to price changes than the supply of others.

The price at which supply and demand are equal is called the

Which of the following conditions are assumed to exist under perfect competition?

Because equilibrium price is established in the market, it is also called the market price.

At the equlibrium price, the market is cleared, meaning that all possible sales are made.

The desire to buy an item at a specified price and time with abilility/willingness to pay is 

A line graph that shows the amount of a product that would be demanded at each price is called

Unlike demand, supply is not subject to elasticity.

A maximum price that sellers may charge for their products is called a

A table containing values for the price of a good and the quantity supplied at that price is

The principle that the next purchase will be less satisfying than the previous one is the

At a lower price

Supply is said to be elastic if a change in price causes a smaller percentage change in supply.

The point on a graph where the demand and supply curves intersect is where

Relatively inelastic demand refers to a situation in which the drop in the price of an item

The amount of goods or services offered for sale at a particular price is called

Which of the following statements is not true as the price of a product goes up?

The amount of goods/services that buyers/sellers will exchange fluctuates w/ changes in price..

As a product is consumed, it becomes more satisfying.

A graph containing values for the price of a good and the quantity supplied at that price is 

The more demand expands or contracts after a price change, the

The amount of natural resources available is usually unlimited.

Once consumers purchase something, the money spent is no longer available for other purchases.

For any new price to be established, there has to be a shift in supply, demand, or both.

Any price other than the equilibrium price results in either surpluses or shortages.

The price at which goods and services may actually be bought or sold is called

Quantity demanded varies inversely with changes in price.

In the model of perfect competition, there are many buyers and sellers who can affect prices.

Other products can easily be substituted for a luxury item.

Price represents a small portion of the family income.

Elasticity of demand for a good or service is an important factor in many business decisions.

A table of the quantity demanded of a good at different price levels is called

A minimum price that sellers may charge for their products is called a

The percentage of change in demand that follows a price change is called

Manufactured goods are subject to a greater supply elasticity than goods provided by nature.

Which of the following statements is not true about a luxury item?

Demand is considered elastic if a rise in price results in a small drop in demand.

The Law of Demand states "Quantity demanded varies inversely with changes in price."