1. Which of the following describes a demand schedule? a. A business firm's expected sales revenue throughout the year
b. The quantity of a good or service produced based on fluctuations in the prices of the factors of production
c. The price that a good or service should be set at to maximize revenue
d. The quantity of a product that consumers are willing and able to buy at each unit price
e. Quotas that a central planner sets in a command economy

2. Which of the following is an incentive to buy more of a good or service for nearly everyone?

A. The product is illegal.
B. A consumer has a limited budget.
C. The product has a lower price.
D. Regulations make it more difficult to produce.
E. The time required to consume it increases.

3. Chips and salsa are complements. What will happen if the price of chips goes up?

a. The demand for chips and salsa will decrease.
b. The demand for chips and salsa will increase.
c. The quantity demanded for chips will decrease and the demand for salsa will decrease.
d. The demand for chips and salsa would both be unaffected.
e. The demand for chips would decrease and the demand for salsa would be unaffected.

4. See attached attachment1

How does this graph illustrate the law of demand? Demand has increased in response to incentives. Quantity demanded has decreased due to an increase in unit price from $12 to $16. Twenty more units are being consumed. Consumers must purchase four more units to get the decrease in price by $20. It shows that marginal utility points toward a higher price.

5. Which of the following would explain the change illustrated in the graph? picked attached (02_01_02)

A. The number of buyers has gone down in the market for Good A.
B. Average consumer income has decreased, with Good A being an inferior good.
C. A good that is a substitute to Good A decreased in price.
D. Consumers expect the price of Good A to go down.
E. A news report lowers consumers' views of the quality of Good A

. 6. Which of the following provides a clear example of the substitution effect?

A. After the price of bananas is lowered, Andrew goes out and buys two more bunches.
B. Stacy wanted ice cream a bit more than a cupcake but chose the cupcake when the price of ice cream increased.
C. Janice switches from one phone service provider to another based on a strong recommendation from a friend. |
D. Faith buys more eggs after she hears on the radio that a salmonella outbreak is about to cause the price of eggs to increase by at least three times.
E. Derrick buys less pancake mix after he sees how much more expensive syrup is than the last time he purchased it.