Consumer Preferences and Choice Quiz

Industrial goods are goods used by industries, not consumers.

The law of demand describes the inverse relationship between price and quantity demanded.

Producer surplus is not a determinant of consumer demand.

Giffen goods defy the law of demand, as their demand increases with price.

Normal goods' demand increases with income, while inferior goods' demand decreases.

Income of consumers generally influences elasticity of demand.

Utility refers to the satisfaction derived from consuming goods or services.

Substitution effect occurs when consumers change consumption patterns due to price changes.

Opportunity cost represents the trade-off of choosing one option over another.

Engel curve illustrates how quantity demanded changes with income for a particular good.

Total utility measures overall satisfaction, while marginal utility measures satisfaction from the last unit consumed.

Indifference curve shows combinations of goods yielding equal satisfaction.

Inferior goods are less preferred as income rises, unlike normal goods.

Monopoly is a market with one dominant seller, while oligopoly has few dominant sellers.

Marginal utility declines as more units of a good are consumed.

Consumer surplus represents the benefit consumers receive from paying less than they were willing to.

Demand curve slope is zero in perfectly elastic demand, indicating any quantity is demanded at a particular price.

Public goods are non-excludable and non-rivalrous, like national defense.