Name __________________________
Quiz Date / due date ______________
Demand
Principles and Practices of Economics
Chapter 4 Study Guide
Directions: Referring to your text, read pages 78-98, and answer the following
questions. Use this as a reference when studying for the chapter quiz, and be prepared to
turn it in for credit prior to taking the quiz.
Section 1:
1. The economic law that states that when a good's price is lower, consumers will buy
more of it is known as the law of _________________________.
2. When consumers react to an increase in a good's price by consuming less of that good
and more of other goods, it is known as the ___________________ _____________.
3. A table of data that lists the quantity of a good that a person will purchase at each
price in a market is known as a __________________ ________________________.
4. When the demand schedules of every buyer in a market are added up, what type of
demand schedule is created? __________________ demand schedule
5. A market demand schedule show the quantities demanded by all consumers at each
__________________.
6. A graphic representation of a demand schedule is called a ________________
_____________.
7. On demand curves, you can see that as the price of a good decreases, the quantity
demanded of that good __________________.
8. All demand schedules reflect which economic law? The law of _________________
Section 2:
9. A demand curve is accurate only as long as what is the case?
10. As greater quantities of a good or service are demanded, does the demand curve shift
to the right or the left? (See Figure 4.6) ________________________
11. If consumers expect higher prices in the near future, what happens to their immediate
demand? ______________________
12. Identify three factors that influence a consumer’s buying habits.

__________________________________________

__________________________________________

__________________________________________
13. Two goods that are bought and used together are known as ____________________.
14. Identify two complementary goods. ______________________ and
____________________
15. Goods that are used in place of one another are known as ______________________.
16. Identify two substitute goods. ______________________ and __________________
Section 3:
17. A measure of how consumers react to a change in price is known as
______________________ _____ ________________________.
18. When the demand for a good is the same in spite of a price increase, the demand for
that good is ___________________.
19. When the demand for a good would significantly decrease as a result of a price
increase, the demand for that good is _________________________.
20. What is a question that a person could ask him/herself to determine his/her elasticity
of demand for a product?
21. If there were few substitutes available for a product, would the demand tend to be
elastic or inelastic? __________________
22. Identify an example of a good that you purchase that is inexpensive, yet if the price
went up you'd still buy (see section on Relative Importance) ___________________
23. Do necessities tend to have elastic or inelastic demand? _______________________
24. The amount of money a company receives by selling its goods is known as
_______________ ____________________.
25. Explain how or why a business could lose total revenue by raising the price of its
goods.
26. Read the chapter summary carefully on page 98.
27. Answer the Key Terms questions on page 98.
1. ________________________________
2. ________________________________
3. ________________________________
4. ________________________________
5. ________________________________
6. ________________________________
7. ________________________________