ID: A 7. All demand curves slope down because a. as the price of the good falls,
ID: 1165560 • Letter: I
Question
ID: A 7. All demand curves slope down because a. as the price of the good falls, the quantity demanded increases. b. incomes can decline quickly and significantly. e. tastes and preferences change over time d. substitute goods are very often not readily available e. consumers often cannot afford complementary goods . 8. A change in the guantity demanded of skis is a movement along the demand curve for skis. In contrast,a change in demand for skis a. is a movement along the demand curve for skis. b. reflects a change in the price of skis c. is a movement along the demand curve for ski boots. d. is not related to the price of a lift ticket. e. can be caused by an increase in the popularity of the sport 9. Economists have devised measures of how much consumers alter their purchases in response to price changes. These measures are called a. price controls. b. price floors. c. price ceilings. d. price elasticities. e. irrational behaviors 10. The more responsive consumers are to a price change, a. b. c. d. the more price-elastic is the supply the more income-elastic is the demand. the more price-inelastic is the demand. the more price-elastic is the demand. None of the above. e. 11. Assume the demand curve for a certain good is a horizontal line. This demand curve illastrates the idea that people are not acting in their own best interest. a. b. c. d. e. people can purchase any quantity they want at the single prevailing price. people are unwilling to pay less than a certain price for the good. producers of the good are not acting in their own best interest people cannot or will not change the quantity of the good when the price of the good is changed 12. You arrive at the doughnut shop early in the morning feeling very hungry. You and your friend onder coffee and a dozen assorted doughnuts. The first doughnut you eat tastes incredibly good. The second, pretty good The third, just OK. The fourth, you are turning somewhat green. The fifth, you are feeling sick Your friend, an economist, knows you have just experienced firsthand the principle of a total utility b. marginal utility. c. excellent judgment d. differing tastes and preferences e diminishing marginal utility 5:16 PExplanation / Answer
7. a) as the price of the good falls, the quantity demanded increases.
Demand curve slopes downwards because of negative relationship between price and quantity demanded.
8. e) can be caused by an increase in the popularity of the sport.
When demand of skis changes due to change in factors other than price of skis then it causes Change in Demand i.e. shift of demand curve.
9. d) price elasticities
Increase in price causes decrease in quantity demanded. Elasticities shows responsiveness of change in quantity demanded due to change in price.
10. c) the more price-elastic is the demand
Ed = % change in Qd/% change in price
when % change in price causes more change in quantity demanded then it shows more responsiveness and Ed > 1 i.e. more elastic.
11. b) people can purchase any quantity they want at the single prevailing price.
Horizontal demand curve means consumer is willing to purchase any commodity at this price only. Any increase in price causes quantity demanded to fall to zero.
12. e) diminishing marginal utility
As more and more units of a commodity are consumed a stage will utlimately come when marginal utility starts declining. This represents law of diminishing marginal utility.