Chapter 3 Reader
Vocab.
Demand
Quantity Demanded
Diminishing Marginal Utility
Demand Schedule
Demand Curve
Substitute Goods
Complementary Goods
Elastic Demand
Inelastic Demand
Total Revenue
Reading Questions:
1. Explain the difference between demand and Quantity Demanded
2. What is the difference between a demand curve and a demand schedule?
3. When drawing a Demand curve, what should you label the x-axis, y-axis, and the demand curve?
4. Should you give your graph a title? What should the title indicate?
5. Draw a Demand Curve using the following Demand Schedule: (Be sure to label to every part of
the graph with the appropriate information.)
Price
5.00
Quantity
Demanded
100
4.00
200
3.00
300
2.00
400
6. What conditions must a consumer meet in order to add to the demand for sports cars?
7. What does the law of demand state?
8. When does the substitution effect not apply to demand?
9. According to figure 3.1 during a 1 month period how many watches are demanded at $300?
10. According to figure 3.2, if the price increases from $300-$400, how will the demand for car
stereos change in a given month?
11. What does it mean for a products demand to shift?
12. What factors can shift demand for a product?
13. How do substitute goods differ from complementary goods?
14. Look at figure 3.3 on pg. 57. Does D2 represent an increase or a decrease in demand? How do
you know this? Does this reflect the law of demand? How?
15. How can consumer tastes and preferences influence demand?
16. How is a change in income different from the income effect?
17. How might an increase in the price of ice cream affect the demand for frozen yogurt? Why?
18. Hot dogs and hot dog buns are complementary goods. What other complementary goods can you
think of? At least four pairs!!
19. What is demand elasticity?
20. What is the difference between elastic and inelastic demand?
21. How is demand elasticity measured?
22. Is the demand for iPods elastic or inelastic? Why?
23. Look at figure 3.4 on pg. 64. How does the slope of the demand curve indicate elastic demand for
pizza?
24. What is the relationship between price and demand for products with inelastic demand?
25. Look at Figure 3.6 on pg. 67. During a 1 month period, what price range shows inelastic demand
for movie tickets?