1.) An increase in demand is defined as an increase in the quantity that people

ID: 1221584 • Letter: 1

Question

1.) An increase in demand is defined as an increase in the quantity that people are willing and able to purchase at

at least one price.

some prices.

different prices.

2.) Changes in demand are caused by each of the following except

changes in income.

changes in the prices of related goods and services.

changes in tastes and preferences.

changes in supply.

3.) As income falls, the demand for normal goods ____ and the demand for inferior goods ____.

falls; falls

rises; rises

falls; rises

rises; falls

4.) When the demand for CDs rises, buyers will purchase more CDs at

all prices.

some prices.

no prices.

5.) If good A and good B are substitutes and the price of good A decreases, the demand for good B will

not change.

decrease.

increase.

become nonexistent.

(1) Different prices.

This constitutes the demand schedule, which shows various quantities purchased at different prices.

(2) Change in supply

Any supply-side factor is not a determinant of change in demand.

(3) Falls, rises

As income falls (rises), demand for normal goods falls (rises) and that of inferior goods rises (falls).

(4) All prices

Higher demand will shift the demand curve to right at all price levels.

(5) decrease

For substitute goods, price of one good is inversely related to demand for the other good.

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