Economics Vocabulary Quiz
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Questions and Answers

Which term refers to the concept that as the price of a good increases, the quantity demanded decreases?

  • Law of Demand (correct)
  • Income Effect
  • Price of Substitute
  • None of the above
  • What does the term 'Income Effect' refer to?

  • The change in quantity demanded due to changes in consumer income (correct)
  • The change in price of a substitute good
  • The change in quantity supplied due to changes in producer income
  • None of the above
  • What is the 'Price of Substitute' in economics?

  • The price of a good that is used as a substitute for another good (correct)
  • The price of a complementary good
  • The price of a luxury good
  • None of the above
  • Which term refers to the concept that measures the responsiveness of quantity demanded to a change in price?

    <p>Elasticity (D)</p> Signup and view all the answers

    What does the term 'Price of Compliment' refer to in economics?

    <p>The price of a good that is directly related to another good (B)</p> Signup and view all the answers

    What is 'Elastic Demand' in economics?

    <p>When the quantity demanded is highly responsive to changes in price (C)</p> Signup and view all the answers

    Study Notes

    Law of Demand

    • The law of demand states that as the price of a good increases, the quantity demanded decreases, ceteris paribus (all other things being equal).

    Income Effect

    • The income effect refers to the change in quantity demanded of a good or service resulting from a change in the consumer's purchasing power, typically due to a change in income.

    Price of Substitute

    • The price of a substitute is the price of a good or service that can be used in place of another good or service, influencing the demand for the original good.

    Elasticity of Demand

    • Elasticity of demand measures the responsiveness of quantity demanded to a change in price, with high elasticity indicating a large change in quantity demanded in response to a small price change.

    Price of Complement

    • The price of a complement is the price of a good or service used together with another good or service, influencing the demand for the original good.

    Elastic Demand

    • Elastic demand refers to a situation where a small change in price leads to a large change in the quantity demanded, often characterized by a high elasticity of demand.

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    Description

    Test your knowledge of economics vocabulary with this quiz! Learn about concepts such as the Law of Demand, Income Effect, and Price of Substitute. Challenge yourself and see how well you understand these key terms in the field of economics.

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