Which of the Following Describes the Law of Demand? When

question 264

Multiple Choice

Which of the following describes the law of demand? When other things remain the same,as

• A) the price of gas falls, the quantity demanded of gas increases.
• B) the quantity demanded of bread increases, the price of bread falls.
• C) the price of peanut butter increases, the quantity demanded of jelly decreases.
• D) your income increases, you'll buy more hamburgers.
• E) more people decide to eat pizza, the demand for pizza increases.

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Definitions:

Long Run

A period of time in economics during which all factors of production and costs are variable, allowing for full industry adjustment.

Diseconomies Of Scale

Situations where a firm's costs per unit increase as the scale of production increases, typically due to inefficiencies that arise from becoming too large.

Diminishing Returns

A principle stating that if one input in the production of a commodity is increased while other inputs are held fixed, a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output.

Diminishing Returns

A principle in economics that states as one input variable is incrementally increased, there comes a point when the rate of resultant output begins to decrease.