10 Questions
What is the definition of a market?
A system that brings buyers and sellers together to exchange goods
What is the Law of Demand stating?
As the price of a product decreases, the quantity demanded increases
What is the income effect?
A decrease in price is similar to an increase in income
What is the effect of a decrease in price on the quantity demanded?
The quantity demanded increases
What is the term for the extra satisfaction gained from consuming one more of a product?
Marginal utility
What happens to the demand for inferior goods when a buyer's income increases?
The demand for the inferior goods decreases.
What is the relationship between the price of a good and its complementary good?
If the price of a good decreases, the demand for its complement will increase.
What represents a change in the quantity demanded?
A move from one point to another point on a single demand curve.
What is the result of producing quantities greater than or less than the allocative efficient level of output?
Deadweight loss is created.
What is the term for the sum of consumer surplus and producer surplus?
Total surplus.
Test your understanding of the fundamentals of economics, including the concept of a market and the law of demand. Learn how price changes affect the quantity demanded and more!
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
