Chapter 5 Review for Test 1 When a consumer is able and willing to buy a good or service, he or she creates which of the following? 2 How is future price related to current demand? 3 What does it mean when the demand for a product is inelastic? 4 What is a basic principle of the law of demand? 5 What factors cause a shift in the demand curve? 6 Give an example of a good with an inelastic supply if the factors impacting elasticity are "time needed to adjust to a price change" and "storage capacity"? 7 In the summer, a sharp rise in the price of lemonade may lead to an increase in the demand for iced tea. The demand shifter in this case is... 8 Quantity demanded moves along the demand curve in response to changes in... 9 What is most likely to happen to demand for clothes in a clothing store when blizzards keep customers at home?
10 Supply depends on the willingness and ability of... 11 The degree to which the quantity demanded responds to changes in price is called... 12 A decrease in the price of peanut butter would most likely lead to an increase in the demand for jelly. The demand shifter is... 13 What kind of changes would be expected in the demand of a country that has a growing population? 14 Colorado ski resorts announce 25% increase in lift ticket prices. How will this information affect market demand for lift tickets in Colorado? 15 A famous basketball athlete signs an endorsement deal with the Nike shoe company. How will this information affect market demand or supply for Nike shoes? 16 What do sellers do if they expect the price of the nonperishable goods they have for sale to increase dramatically in the near future? 17 What is the law of supply? 18 When the selling price of a good goes up, what is the relationship to the quantity supplied?
19 If the price of bananas goes up, it would be difficult to produce more bananas right away. It would be possible to produce more in the future. What factor is influencing elasticity of supply? 20 How does a decrease in the price of raw materials impact elasticity of supply? 21 Teen workers receive wage increases. How would this impact the demand or supply of shoes? 22 There was one bakery in a town producing 100 cookies per day. Another bakery opened which also produced 100 cookies per day. What would happen to the supply or demand curve for cookies? 23 Florida's orange crop freezes. What would happen to the supply or demand for oranges? 24 What is a payment to the government on the production or sale of a good? 25 What happens to elasticity of demand if a product has a close substitute? 26 What is a government payment that supports a business or market? 27 How does "price relative to income" impact elasticity of demand?
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