18 Questions
What is the primary motivation behind the substitution effect in the context of demand?
To motivate consumers to buy relatively cheaper substitute goods
Which economic factor causes a shift in the demand curve rather than just a movement along it?
One of the shifters of demand
What economic concept explains why consumers experience less satisfaction from each additional unit of a product consumed?
The Law of Diminishing Marginal Utility
Which factor directly influences the quantity supplied at different prices, leading to a shift in supply?
Number of producers
Which scenario best explains a movement along a fixed demand curve rather than a shift in demand?
A change in price of a product
How does an increase in taxes generally affect the supply of goods?
Decrease supply
What is the term used to describe the point where demand and supply intersect in a market?
Market Equilibrium
If a government enacts laws to set a maximum legal price for a good, what is this called?
Price Ceiling
What concept describes abandoning an activity because of heavy prior investment, even if it is not rational?
Sunk Cost Fallacy
What happens to the slope of the demand curve when demand for a good increases?
Moves to the right
What does 'Ceteris Paribus' mean in economics?
Other things being equal
Which term describes the excess supply that occurs when the market price is above the equilibrium price?
Surplus
What does a normal good refer to?
A product whose demand rises when income rises
Which of the following is a shifter of demand?
Price of related goods
What is the law of demand based on?
Inverse relationship between price and quantity demanded
What is an inferior good?
A product whose demand falls when income rises
Which factor causes a shift in the demand curve?
Number of consumers/population size
What does the law of demand explain about the relationship between price and quantity demanded?
There is an inverse relationship between price and quantity demanded
Learn about the concepts of movements along a fixed demand curve, shifts in demand, and reasons behind the downward sloping demand curve. Explore how changes in economic factors can influence consumer behavior.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
