Eco 211 Midterm Exam
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1. A __________ is any place where parties can come together to trade. Every
market has two sides: a buying side and a selling side.: market
2. __________ is the willingness and ability of buyers to purchase different quan-
tities of a good at different prices during a specific period of time. Both willing-
ness and ability must be satisfied for a buyer to enter a market or reside on the
demand curve.: Demand
3. The __________ establishes a negative relationship between price (P) and quan-
tity demanded (QD).: law of demand
4. As the price of a good __________, quantity demanded __________, ceteris
paribus. We hate paying more for goods, so we buy less.: rises, falls
5. As the price of a good __________, quantity demanded __________, ceteris
paribus. We love paying less for goods, so we buy more.: falls, rises
6. A __________ is just a graphical representation of the law of demand.: demand curve
7. The ____________________ utility states that the marginal utility or additional
satisfaction gained by consuming successive units of a good decreases as
consumption increases: law of diminishing marginal
8. ____________________ is defined as the number of units that individuals are
willing and able to buy at a particular price (P).: Quantity demanded (QD)
9. If the price (P) of a good __________, the quantity demanded (QD) __________,
ceteris paribus. As the price falls, we are willing and able to buy more of a good,
which is why we like paying lower prices.: decreases, increases
10. If the price (P) of a good __________, the quantity demanded (QD) __________,
ceteris paribus. As the price rises, we are willing and able to buy less of a good,
which is why we dislike paying higher prices.: increases, decreases
11. A ____________________ in the entire demand curve represents an increase in
demand. When demand ____________________, we are willing and able to buy
more at every price: rightward shift, increases
12. A ____________________ in the entire demand curve represents a decrease in
demand. When demand ____________________, we are willing and able to buy less
at every price.: leftward shift, decreases
13. A change in quantity demanded (QD) is NOT the same thing as a change in
demand (D):: 1. If price (P) changes, quantity demanded (QD) changes. Demand (D) does not change if price
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, Eco 211 Midterm Exam
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(P) changes.
2. Demand (D) changes if a non-price determinant of demand (something other than price) changes.
14. Movements Along the Demand and Supply Curve: Price
15. Shifts In the Demand Curve: 1. Income
2. Preferences
3. Prices of Related Goods in Consumption
4. Number of Buyers
5. Future Expectations
6. Consumer Taxes & Transfer Payments
16. For __________, the demand increases as income increases, or demand de-
creases as income decreases, ceteris paribus.: normal goods
17. For __________, the demand decreases as income increases, or demand in-
creases as income decreases, ceteris paribus.: inferior goods
18. A change in preferences will __________ demand if consumers are willing
and able to buy more at every price due to the preference change, ceteris
paribus.: increase
19. A change in preferences will __________ demand if consumers are willing
and able to buy less at every price due to the preference change, ceteris
paribus.: decrease
20. __________ are two goods that satisfy similar needs and are only consumed
one at a time. For __________, a price increase in one good causes a demand
increase for another good, or a price decrease in one good causes a demand
decrease for another good, ceteris paribus.: Substitutes
21. __________ are two goods that are consumed at the same time. For __________,
a price increase in one good causes a demand decrease for another good, or a
price decrease in one good causes a demand increase for another good, ceteris
paribus.: Complements
22. Demand __________ if more buyers enter the market for a good or service,
ceteris paribus.: increases
23. Demand __________ if more buyers exit the market for a good or service,
ceteris paribus.: decreases
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1. A __________ is any place where parties can come together to trade. Every
market has two sides: a buying side and a selling side.: market
2. __________ is the willingness and ability of buyers to purchase different quan-
tities of a good at different prices during a specific period of time. Both willing-
ness and ability must be satisfied for a buyer to enter a market or reside on the
demand curve.: Demand
3. The __________ establishes a negative relationship between price (P) and quan-
tity demanded (QD).: law of demand
4. As the price of a good __________, quantity demanded __________, ceteris
paribus. We hate paying more for goods, so we buy less.: rises, falls
5. As the price of a good __________, quantity demanded __________, ceteris
paribus. We love paying less for goods, so we buy more.: falls, rises
6. A __________ is just a graphical representation of the law of demand.: demand curve
7. The ____________________ utility states that the marginal utility or additional
satisfaction gained by consuming successive units of a good decreases as
consumption increases: law of diminishing marginal
8. ____________________ is defined as the number of units that individuals are
willing and able to buy at a particular price (P).: Quantity demanded (QD)
9. If the price (P) of a good __________, the quantity demanded (QD) __________,
ceteris paribus. As the price falls, we are willing and able to buy more of a good,
which is why we like paying lower prices.: decreases, increases
10. If the price (P) of a good __________, the quantity demanded (QD) __________,
ceteris paribus. As the price rises, we are willing and able to buy less of a good,
which is why we dislike paying higher prices.: increases, decreases
11. A ____________________ in the entire demand curve represents an increase in
demand. When demand ____________________, we are willing and able to buy
more at every price: rightward shift, increases
12. A ____________________ in the entire demand curve represents a decrease in
demand. When demand ____________________, we are willing and able to buy less
at every price.: leftward shift, decreases
13. A change in quantity demanded (QD) is NOT the same thing as a change in
demand (D):: 1. If price (P) changes, quantity demanded (QD) changes. Demand (D) does not change if price
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, Eco 211 Midterm Exam
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(P) changes.
2. Demand (D) changes if a non-price determinant of demand (something other than price) changes.
14. Movements Along the Demand and Supply Curve: Price
15. Shifts In the Demand Curve: 1. Income
2. Preferences
3. Prices of Related Goods in Consumption
4. Number of Buyers
5. Future Expectations
6. Consumer Taxes & Transfer Payments
16. For __________, the demand increases as income increases, or demand de-
creases as income decreases, ceteris paribus.: normal goods
17. For __________, the demand decreases as income increases, or demand in-
creases as income decreases, ceteris paribus.: inferior goods
18. A change in preferences will __________ demand if consumers are willing
and able to buy more at every price due to the preference change, ceteris
paribus.: increase
19. A change in preferences will __________ demand if consumers are willing
and able to buy less at every price due to the preference change, ceteris
paribus.: decrease
20. __________ are two goods that satisfy similar needs and are only consumed
one at a time. For __________, a price increase in one good causes a demand
increase for another good, or a price decrease in one good causes a demand
decrease for another good, ceteris paribus.: Substitutes
21. __________ are two goods that are consumed at the same time. For __________,
a price increase in one good causes a demand decrease for another good, or a
price decrease in one good causes a demand increase for another good, ceteris
paribus.: Complements
22. Demand __________ if more buyers enter the market for a good or service,
ceteris paribus.: increases
23. Demand __________ if more buyers exit the market for a good or service,
ceteris paribus.: decreases
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