The law of demand says ...

The lower the price, the more consumers will buy.

The demand curve illustrates

The quantities demanded at each price by consumers.

Goods used in place of one another

Which of the following describes the substitution effect?

As the price rises, people will substitute other products.

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Demand Quiz

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Supply and Demand Test

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Questions 28

Answers

1
The law of demand says ...
The lower the price, the more consumers will buy.
The lower the price, the more consumers will substitute.
The higher the price, the more consumers will buy.
The lower the price, the fewer consumers will buy.
2
A drop in price will ...
Not affect the Law of demand.
Not affect the demand for goods.
Increase the demand for goods.
Decrease the demand for goods.
3
Consumers react to an increase in price by consuming less of that good and more of other goods.
Inelastic
Total Revenue
Substitution Effect
Cetaris Paribus
4
Demand that is not very sensitive to a change in price.
Cetaris Paribus
Substitution Effect
Normal Good
Inelastic
5
A good for which the demand falls when income rises.
Income Effect
Substitute
Complement
Inferior Good
6
Which of the following is NOT an example of complements.
Skis and ski boots
Row boat and oars
Electric shaver and charging cord
Cubs and White Sox
7
A graphic representation of a demand schedule.
Complements
Law of Demand
Substitutes
Demand Curve
8
A good consumed instead of one that’s price has risen.
Inferior Good
Substitute
Complement
Income Effect
9
The demand curve illustrates
The difference in price charged by different stores.
The quantities demanded at each price by consumers.
The products which are in most demand
The difference in demand for different products.
10
Substitutes are
Goods which cause a shift in the demand curve
Goods that cannot be replaced
Goods used in place of one another
Goods that are bought and used together
11
Change in consumption resulting from a change of real income.
Complement
Inferior Good
Elasticity of Demand
Income Effect
12
The T in SPITE stands for?
Total Cost
Total Revenue
Taste
Time
13
Price goes up quantity demanded goes down.
Law of Demand
Complements
SPITE
Substitutes
14
The I in SPITE stands for?
Involved
I don't know
Income
Inside
15
Demand that is very sensitive to a change in price.
Substitute
Elasticity of Demand
Inferior Good
Income Effect
16
Which of the following describes the substitution effect?
As demand rises, people will substitute other products.
As the price rises, people will substitute other products.
As demand falls, people will substitute other products.
As the price falls, people will substitute other products.
17
Which of the following is an example of a good with inelastic demand?
Chewing Gum
Television sets
Life saving medicine
Computers
18
If you keep buying despite a price increase, your demand is
Inelastic
Normal
Strong
Elastic
19
For most goods, a rise in people’s income means that there will be
An increase in demand.
A decrease in demand
A substitution effect
A rise in prices
20
A good that consumers will demand more of when their income increases.
Normal Good
Substitution Effect
Cetaris Paribus
Inelastic
21
Peanut Butter and Jelly.
Substitutes
Demand Curve
SPITE
Complements
22
The P in SPITE stands for?
Price of Related Goods
Price
Production cost
Possibility
23
A good that is bought and used along with another good.
Income Effect
Elasticity of Demand
Complement
Substitute
24
Everything stays constant.
Substitution Effect
Total Revenue
Normal Good
Cetaris Paribus
25
Factors that shift the demand curve.
Complements
SPITE
Substitutes
Demand Curve
26
Pepsi and Coke.
Substitutes
Law of Demand
Complements
SPITE
27
The S in SPITE stands for?
Subsititute
Subprime
Subway
Subcategory
28
The E in SPITE stands for?
Equilibrium
Extra Cost
Expectation
Exam

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