1. The law of demand states that
a. People demand more of a product as consumer income rises
b. People demand more of a product as consumer income falls
c. People demand more of a product as the prices of other products fall
d. People demand more of a product as the price the product rises
e. People demand more of a product as the price the product falls

2. The substitution effect of a price change implies that
a. As the price of a good falls, people are likely to buy more of the good
b. As the price of a good falls, people are likely to buy more of all goods
c. As the price of a good falls, people are likely to buy less of the good
d. As the price of a good falls, people are likely to buy less of all goods
e. None of the above
 

3. Assume that butter and margarine are substitutes. When the price of butter increases
a. The demand for margarine increases
b. The demand for margarine decreases
c. The supply of margarine increases
d. The supply of margarine decreases
e. The demand for butter decreases
 

4. Suppose that consumers expect the price of the product to decrease in the future. The result is that
a. The current demand for the product increases
b. The current demand for the product does not change
c. The demand curve for the product shifts right
d. The current demand for the product decreases
e. The quantity demanded of the product increases
 

5. When Mary's income increases, she purchases less hamburger. We can conclude that
a. Hamburger is a normal good
b. Hamburger is an inferior good
c. Hamburger is a substitute good
d. Hamburger is a complimentary good
e. The price of hamburger must have risen