Please check to see if my answers are correct.
Complete each sentence by choosing the correct answer from the list of terms below. You will not use all of the terms.
*normal good
*complements
*income effect
*demand curve
*ineleastic
*inferior good
*law of demand
*unitary elastic
*elastic
*elasticity of demand
1. You would refer to a(n) __________ to find the quantity that a person would purchase at each prices that could be offered in a market.
-demand curve
2. For a(n) ________, a consumer's demand will increase as his or her income increases.
-normal good
3. The ________ occurs when an increase in price decreases a consumer's real income.
-income effect
4. Demand for goods that are necessities is usually ____________.
-inelastic
5. If the elasticity of demand of a good is equal to 1, it is described as ___________.
-unitary elastic
6. According to the _________, when prices increase, demand will decrease.
-law of demand
7. Two goods that are bought and used together are ___________.
-complements
In sentence #1, it is supposed to say price instead of prices.
I agree with all of your answers.
1.
2. Normal good
3
4. Elasticity of demand
5. Unitary elastic
6.
7. Complements
Normal good
1. You are correct. To find the quantity that a person would purchase at each price in a market, you would refer to the demand curve.
2. You are correct. For a normal good, a consumer's demand will increase as his or her income increases. This means that as income increases, people are willing to spend more on the good.
3. You are correct. The income effect occurs when an increase in price decreases a consumer's real income. This can lead to a decrease in the quantity demanded of a good because the consumer's purchasing power has decreased.
4. You are correct. Demand for goods that are necessities is usually inelastic. This means that changes in price have a relatively small impact on the quantity demanded of the good. Necessities are goods that people need regardless of changes in price or income.
5. You are correct. If the elasticity of demand of a good is equal to 1, it is described as unitary elastic. This means that the percentage change in quantity demanded is equal to the percentage change in price.
6. You are correct. According to the law of demand, when prices increase, demand will decrease. This means that there is an inverse relationship between price and quantity demanded - as price increases, quantity demanded decreases, and vice versa.
7. You are correct. Two goods that are bought and used together are called complements. Complements are goods that are typically consumed together or used in conjunction with each other. An example of complements would be bread and butter - they are often consumed together.