1 / 50

Demand Review II

Demand Review II. What is defined as the desire, willingness, and ability to purchase a particular product at a particular price? Demand. What law states that at a certain point, the next unit of a product ads less benefit than the unit before? Law of Diminishing Marginal Utility.

ppeak
Télécharger la présentation

Demand Review II

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Demand Review II

  2. What is defined as the desire, willingness, and ability to purchase a particular product at a particular price? • Demand

  3. What law states that at a certain point, the next unit of a product ads less benefit than the unit before? • Law of Diminishing Marginal Utility

  4. When price increases, what says that the quantities of the product demanded will decrease? • Law of Demand

  5. Create a demand curve showing the Law of Demand: P D Q

  6. Create a demand curve showing the income effect: P D Q

  7. Which of the following does NOT reflect the Law of Demand? • Income effect • Substitution effect • Law of Diminishing Marginal Utility • A change in consumer income • A sale • #4

  8. What is the economic relationship of a hotdog and hamburger? • Substitutes

  9. What is the relationship between mustard and ketchup? • Complements

  10. What is the phrase that refers to the added benefit to consuming one more unit of a product? • Marginal utility

  11. What happens to the demand for orange juice when the price of lemon aid falls? D2 D1

  12. What happens to the demand for a product when the price of its complement decreases? • Increases • Shifts to the right

  13. What happens to the demand for a product when the price of its substitute falls? • Decreases • Shifts to the left

  14. Create a demand curve demonstrating what happens to the demand for Honda cars when the safety of Toyotas becomes doubtful:

  15. What is the economic relationship between an IPod and earphones? • Complements

  16. What happens to the demand for earphones when the price of IPods increases? • Decreases • Shifts to the left

  17. What happens to the demand for Prom dresses the week before a big price increase? • Decreases • Shifts to the left

  18. Demand curve for glasses when contact lenses go on sale: D2 D1

  19. What do consumers do when price is higher than the product’s marginal utility? • Stop buying the product

  20. Which is NOT a factor that causes a change in demand (as opposed to a change in the quantities demanded)? • Change in income • Change in tastes or preferences • Change in number of consumers (population) • Change in the price of the item • #4

  21. What is the relationship between an electric fan and an air conditioning unit? • Substitutes

  22. What answers the following question? • When price changes, how much do quantities demanded change? • Elasticity • Price elasticity • Elasticity of demand

  23. What are the 3 determinants of demand elasticity? • Urgency/need • Availability of adequate substitutes • The proportion of income required to purchase the product

  24. What is the likely elasticity of demand of a product that has adequate substitutes? • Elastic

  25. When a product is urgent without adequate substitutes, the price elasticity is likely: • Inelastic

  26. When a change in price causes a proportional change in quantities demanded, the elasticity is: • Unit elastic

  27. When price changes cause relatively larger changes in quantities demanded, the elasticity of demand is: • Elastic

  28. Create a demand curve that shows inelastic demand:

  29. Whoo Hoo! Econ is Fun!...

More Related