Test Your Knowledge: Demand Curve Construction (AP Micro Quiz)

📚 Quick Study Guide

• 📈 Definition of Demand: Demand refers to the quantity of a good or service that consumers are willing and able to purchase at various prices during a specific period.
• 📉 Law of Demand: States that, all else being equal, as the price of a good or service increases, the quantity demanded decreases, and vice versa.
• 🍎 Determinants of Demand (Shifters): Factors other than price that can affect demand:
  • 💰 Income: Normal vs. Inferior goods.
  • tastes: Changes in consumer preferences.
  • 👪 Number of Buyers: An increase in the number of buyers increases demand.
  • 🔮 Expectations: Consumer expectations about future prices or income.
  • 🔗 Prices of Related Goods: Substitutes and Complements.
• ✏️ Demand Curve: A graphical representation of the relationship between price and quantity demanded. Typically downward sloping.
• 📊 Market Demand: The sum of all individual demands for a particular good or service.
• $\textbf{Qd = a - bP}$: A simple linear demand equation where Qd is quantity demanded, P is price, 'a' represents factors other than price affecting demand, and 'b' represents the responsiveness of quantity demanded to a change in price.

🧪 Practice Quiz

1. Which of the following best describes the law of demand?
   1. A) As income increases, the quantity demanded increases.
   2. B) As the price increases, the quantity demanded increases.
   3. C) As the price increases, the quantity demanded decreases.
   4. D) As the price decreases, the quantity supplied decreases.
2. An increase in consumer income will cause the demand curve for a normal good to:
   1. A) Shift to the left.
   2. B) Shift to the right.
   3. C) Remain unchanged.
   4. D) Become vertical.
3. Which of the following is NOT a determinant of demand?
   1. A) Consumer tastes.
   2. B) Price of related goods.
   3. C) Technology.
   4. D) Consumer expectations.
4. If goods A and B are complements, an increase in the price of good A will cause the demand curve for good B to:
   1. A) Shift to the right.
   2. B) Shift to the left.
   3. C) Remain unchanged.
   4. D) Become steeper.
5. What is market demand?
   1. A) The demand of the largest consumer in the market.
   2. B) The demand at the highest price.
   3. C) The sum of all individual demands for a product.
   4. D) The average demand of all consumers.
6. Using the demand equation $Qd = 100 - 2P$, if the price (P) is $20, what is the quantity demanded (Qd)?
   1. A) 20
   2. B) 40
   3. C) 60
   4. D) 80
7. A shift in the demand curve is caused by:
   1. A) A change in price.
   2. B) A change in quantity supplied.
   3. C) A change in any determinant of demand other than price.
   4. D) Movement along the supply curve.