Question 1

A demand schedule

Accepted Answer

A demand schedule lists the quantity demanded of a good at different prices, but it is only relevant for a limited time period. A demand schedule does not hold prices, quantity, or variety constant.

Question 2

Gasoline prices in the United States decreased significantly between 2008 and 2009. A decrease in the price of gasoline, holding other things constant, will cause which of the following to occur?

Accepted Answer

The answer of Gasoline prices in the United States decreased...

Question 3

Four points on a demand schedule are given: $12, 2 units; $10, 1 unit; $15, 1.5 units; and $2, 4 units. Which combination is inconsistent with the law of demand?

Accepted Answer

The answer of Four points on a demand schedule are...

Question 4

The alternative quantities demanded for a given time period at different possible prices is known as

Accepted Answer

A demand schedule is a table that shows the different quantities of a product or service that consumers are willing and able to purchase at different prices. It helps to depict the inverse relationship between price and quantity demanded, and is an important tool in determining market demand and price elasticity. The other answer choices are either incorrect or do not accurately describe the concept of demand.

Question 5

A demand curve is a graphical representation of

Accepted Answer

A demand curve is a visual representation of the demand schedule, showing the quantity of a good or service that consumers are willing and able to buy at each price level. It is not a reflection of consumer tastes or national income, nor does it directly show relative prices.

Question 6

An increase in quantity demanded is caused by

Accepted Answer

According to the law of demand, quantity demanded is inversely related to price. Therefore, a decrease in the price of the good will result in an increase in the quantity demanded.

Question 7

For a demand schedule, which of the following is held constant?

Accepted Answer

The answer of For a demand schedule, which of the...

Question 8

When the price of a good falls, there will be

Accepted Answer

A fall in price causes a movement along the demand curve, as quantity demanded increases. It does not cause an outward shift in the demand curve.

Question 9

A market demand schedule for a product indicates that

Accepted Answer

A market demand schedule shows the relationship between the price of a product and the quantity of that product that consumers are willing and able to buy. A negative relationship between price and quantity demanded means that as the price of the product increases, consumers buy less of the product, and as the price of the product decreases, consumers buy more of the product. Therefore, the correct statement is that as a product's price rises, consumers buy less of the good, and as the product's price falls, consumers buy more of the good.

Question 10

A schedule of how much of a good people will purchase for a range of possible prices during a specified time period, other things constant, is the definition of

Accepted Answer

This is the definition of demand, which is one half of the supply and demand model used in economics to explain the behavior of markets. A purchasing contract refers specifically to an agreement between two parties to buy and sell a good at an agreed-upon price, and an economic market is a broader concept encompassing all buyers and sellers of a particular good or service.

Question 11

When economists talk about a demand schedule for a product, they mean

Accepted Answer

A demand schedule provides information on the amount of a good or service that consumers intend to purchase at different prices in a given time period. It is a table that shows the relationship between the price of a good and the quantity of the good that consumers are willing and able to buy at each price.

Question 12

Graphically, a market demand curve is found by

Accepted Answer

A market demand curve is a graphical representation of the quantity demanded by all consumers in the market at different prices. It is found by summing the quantities demanded by all individuals at each price, which is option B. Option A is incorrect because taking an average of all prices that people are willing to pay does not necessarily give us the market demand curve. Option C is incorrect because it deals with individual consumer behavior and not the behavior of all consumers in the market. Option D is incorrect because taking an average of individual demand curves does not necessarily give us the market demand curve since individual demand curves may vary.

Question 13

The market demand curve for a particular good

Accepted Answer

The market demand curve for a particular good is derived by horizontally summing all the individual demand curves for that good. This means adding up the quantities demanded by all consumers at each price level to get the total market demand at those prices.

Question 14

A demand curve is derived from

Accepted Answer

A demand curve is derived from a demand schedule which shows the different quantities of a good or service that consumers are willing and able to buy at different prices. The demand curve is then plotted using this information, showing the relationship between price and quantity demanded.

Question 15

Here's what we know about last year's weekly demand for 2-night DVD rentals in the Village of Harmony: When P = $3, Qd = 100; at P = $5, Qd = 75; and when P = $7, Qd = 50. This year the village population has increased by 25%. What impact is this most likely to have?

Accepted Answer

The increase in population suggests an increase in the total number of potential customers, which could result in an increase in the overall demand for DVD rentals in the village. Therefore, the market demand for DVD rentals is most likely to increase.

Question 16

A demand schedule provides

Accepted Answer

A demand schedule provides the alternative quantities demanded for a given time period at different possible prices. It does not pertain to the quantities people are willing to sell or the amount someone wants to sell. It also does not relate to the amount of a good a person wants at different times of the day.

Question 17

If Apple's iTunes Music Store increases its "fee" for its music downloads, the law of demand predicts that

Accepted Answer

According to the law of demand, as the price of a good increases, the quantity demanded decreases. Therefore, if Apple's iTunes Music Store increases its fee for its music downloads, it is expected that the number of downloads would decrease.

Question 18

In deriving the demand schedule for a good, economists assume that

Accepted Answer

The assumption that all other influences on demand except the product price are held constant is necessary in order to isolate the effect of price changes on the quantity demanded. Assumptions of equal incomes or allocating all income to one good are not necessary for deriving the demand schedule. The assumption of reported income changes is also irrelevant to the determination of the demand schedule.

Question 19

Adding the quantities demanded by all consumers at every price will yield

Accepted Answer

Adding the quantities demanded by all consumers at every price will yield the market demand curve, which shows the relationship between the total quantity demanded and the price in the market.

Question 20

Which of the following will occur as the price of a good decreases?

Accepted Answer

According to the law of demand, as the price of a good decreases, the quantity demanded for that good will increase. This movement is reflected along a stationary demand curve, rather than a shift to the left or right. Therefore, the correct answer is C.

Quiz 3: Demand and Supply