Question

A retail store increases the price of a popular good due to strong seasonal demand for the product. Holding all other economic, social, and political forces constant, this action will most likely result in;

		a shift of the consumer demand curve to the right since there is more seasonal demand for the product
		a shift in the consumer demand curve to the left since consumers will have to spend more to purchase this popular seasonal product.
		moving upward (higher price and lower quantity) on the consumer demand curve
		Will shift the supply curve rightward since consumer demand is increasing

Demand involves both a _________ and an ___________   to pay for the product or service

Which of the following best describes the "law" of demand;

		luxury goods violate the law of demand
		quantity supplied increases as market price increases
		Quantity demanded decreases as the market price increases
		Substitute goods make the law of demand irrelevant

Market price rations scarcity?

True

False

"Utility" as used in microeconomics includes all of the following aspects except;

		is a theoretical measure of a hypothetical rational consumer's preference ranking of goods
		increases beyond the point of consumer satiation
		increases up to the point of satiation
		has real world relevance because it captures in general how most consumers behave

Answer 1

Ans. 1 - moving upward (higher price and lower quantity) on the consumer demand curve

A change in own price causes a movement along the demand or supply curve.

Ans.2- Quantity demanded decreases as the market price increases

Ans.3 - True

Whenever resources are particularly scarce, demand exceeds supply and prices are driven up.

Ans.4 - increases beyond the point of consumer satiation

Because utility starts falling once point of consumer satiation is reached