#1
What is the law of demand in economics?
As prices decrease, quantity demanded increases
ExplanationInverse relationship between price and quantity demanded
#2
Which of the following is not a determinant of demand?
Number of producers
ExplanationFactors other than price affecting demand
#3
In economics, what is the term used to describe the amount of a good or service that consumers are willing and able to purchase at a given price?
Quantity demanded
ExplanationQuantity consumers are willing to buy at a specific price
#4
Which of the following is an example of a normal good?
Luxury cars
ExplanationGoods whose demand rises with income
#5
What is the concept of utility in economics?
The satisfaction or pleasure derived from consuming a good or service
ExplanationSubjective benefit gained from consumption
#6
Which of the following is an example of a substitute good?
Butter and margarine
ExplanationGoods that can replace each other in consumption
#7
What is the term used to describe the amount of satisfaction a consumer derives from consuming a good?
Total utility
ExplanationOverall satisfaction from consuming goods
#8
What does the income elasticity of demand measure?
The responsiveness of quantity demanded to a change in income
ExplanationImpact of income changes on demand
#9
What is the substitution effect in economics?
When the price of one good increases, consumers switch to a substitute good
ExplanationShift to alternative goods due to price changes
#10
What is the difference between normal goods and inferior goods?
Normal goods have positive income elasticity while inferior goods have negative income elasticity
ExplanationResponse of demand to income changes
#11
Which of the following is an example of a complementary good?
DVD players and DVD discs
ExplanationGoods consumed together
#12
What does the law of diminishing marginal utility state?
The more of a good a person consumes per period, the smaller the increase in satisfaction
ExplanationDecreasing satisfaction with increased consumption
#13
According to the law of diminishing marginal utility, what happens as a consumer consumes more of a good?
Marginal utility decreases
ExplanationDecrease in additional satisfaction per unit consumed
#14
What is the Engel curve used to depict?
The relationship between income and the quantity demanded of a good
ExplanationIncome elasticity of demand illustrated
#15
What does the substitution effect in consumer behavior suggest about the effect of a price change on the quantity demanded of a good?
It depends on the elasticity of demand
ExplanationElasticity's role in price change impact
#16
What is the slope of a demand curve that has perfectly elastic demand?
Horizontal
ExplanationExtreme price sensitivity
#17
What is the main assumption underlying the concept of consumer rationality in economics?
Consumers always maximize utility
ExplanationUtility optimization as consumer behavior basis
#18
Which of the following is an example of a Giffen good?
Potatoes
ExplanationGoods whose demand increases with price