Why does an economist create a market demand schedule?
to predict how people will change their buying habits when prices change
Which is an example of the law of demand at work?
-Demand for pizza rises when the price of pizza falls.
-The price of pizza goes up when the price of cheese goes up.
-The price of pizza falls when demand for pizza falls.
-Demand for pizza goes down when
Demand for pizza rises when the price of pizza falls
If prices rise and income stays the same, what is the effect on demand?
Fewer goods are bought.
How does the substitution effect work when the price of an item drops?
Consumers buy the item as a substitute for other things.
If prices rise but income stays the same, what is the effect on the quantity demanded?
Fewer goods are bought.
What happens when the price of Item A increases?
Consumers buy the cheaper Item B as a substitute for Item
How can expectations about the future change consumer behavior?
Immediate demand for a good will rise if its price is expected to rise.
How might advertising lead to a shift in the demand curve?
by helping to create fads and trends
How can the demand for one good be affected by increased demand for another one?
If goods are used together, increased demand for one will increase demand for the other.
How can expectations about the future change what consumers buy now?
Demand for a good will go up if its price is expected to rise.
How does an increase in population affect the demand curve?
The entire curve shifts to the right.
Which of the following will happen if the price of butter goes up?
-The demand for butter increases.
-Main Ideas
-The demand for margarine increases.
-The demand curve for margarine moves to the left.
-The demand curve for butter moves to the right.
The demand for margarine increases.
A music store holds a one-day half-price sale on all CDs. Consumers react to the sale by buying more CDs than on a typical day. This action is an example of
the law of demand
Economists say that a demand curve is accurate only as long as the ceteris paribus assumption is true. This means that
all things other than price hold constant.
If you create a demand schedule for an individual and for a market for the same product, what will remain the same in both schedules?
prices of the good or service
John gets a raise and decides to start buying enriched pasta instead of cheaper instant noodles. For John, instant noodles are examples of
inferior goods
During a six-month period, the price of a popular shoe rises from $28 to $39 a pair. During this same period, demand for this shoe will probably
decrease
Businesses often use information such as age, income level, and occupation to sell products to certain groups of people. Such statistical data are called
demographics