Economics Law of Demand Quiz

Questions and Answers

Price and quantity demanded are inversely related. (correct)

Price increases lead to increased quantity demanded.

Price decreases lead to decreased quantity demanded.

Price has no effect on quantity demanded.

Variations in production costs.

Seasonal discounts on the product.

Changes in consumer income. (correct)

Changes in the quantity of the product available.

It creates a new demand curve without any shifts.

It leads to a movement along the demand curve. (correct)

It causes the demand curve to become vertical.

It causes the demand curve to shift to the left.

Substitutes. Signup and view all the answers

The aggregate demand of individual buyers. Signup and view all the answers

Substitutes have a parallel relationship in demand. Signup and view all the answers

By adding quantities demanded at each price level. Signup and view all the answers

An increase in consumers' income leading to higher demand for luxury goods. Signup and view all the answers

As prices decrease, quantities demanded tend to increase. Signup and view all the answers

They can either increase or decrease demand depending on the relationship. Signup and view all the answers

Study Notes

Establishes a relationship between price and quantity demanded, showing an inverse correlation; as price increases, quantity demanded typically decreases.
External factors beyond price can also significantly impact the demand for a product.

A change in product price results in movement along the demand curve, indicating a corresponding change in quantity demanded.

Prices of Related Goods: The prices of substitutes and complements can influence demand. Consumers look for substitutes to maximize their purchasing power.
Demand shifts can occur independently of price changes due to various external factors, affecting how much of a product is desired.

Calculated through horizontal summation of individual demands from all buyers in the market, providing an aggregate view of total demand for a product.
Helps in understanding overall consumer behavior and preferences in the marketplace.

Establishes a relationship between price and quantity demanded, showing an inverse correlation; as price increases, quantity demanded typically decreases.
External factors beyond price can also significantly impact the demand for a product.

A change in product price results in movement along the demand curve, indicating a corresponding change in quantity demanded.

Prices of Related Goods: The prices of substitutes and complements can influence demand. Consumers look for substitutes to maximize their purchasing power.
Demand shifts can occur independently of price changes due to various external factors, affecting how much of a product is desired.

Calculated through horizontal summation of individual demands from all buyers in the market, providing an aggregate view of total demand for a product.
Helps in understanding overall consumer behavior and preferences in the marketplace.