ECONOMICS TEST CHAPTER 4 FALL 2011
Indicate whether the statement is true or false.
____ 1. A desire to buy a product is the only requirement needed for demand to exist.
____ 2. Marginal utility describes the decreasing satisfaction a consumer receives with the purchase of each additional unit.
____ 3. A demand curve illustrates the quantity demanded at all possible prices at a given time.
____ 4. A demand schedule is created from a demand curve.
____ 5. The Law of Demand states that more of a product will be purchased at low prices than at high ones.
Identify the choice that best completes the statement or answers the question.
____ 6. For most products and services, increased price results in
demand for fewer products.
reduced demand for substitutes.
demand for more products.
increased demand for complements.
____ 7. An increase in the price of milk causes a decrease in the demand for cereal.
The two products are
____ 8. Because a modest price increase has little or no effect, the demand for the product is
____ 9. A business doubled the price of a product in order to increase profits. Which of the following scenarios might have occurred?
A sharp increase in revenues demonstrated the elasticity of the product.
A small increase in revenues demonstrated the unit elasticity of the product.
A dramatic decline in revenues demonstrated the elasticity of the product.
A dramatic decline in revenues demonstrated the inelasticity of the product.
____ 10. A demand schedule shows
an upward-sloping curve that illustrates the positive relationship between price and quantity demanded.
a listing of the various...