III. Fill in the blanks with prepositions or adverbs if necessary:

1. In economic theory, demand means the amount ... a commodity or service that economic units are willing to buy, or actually buy, ... a given price. 2. Demand is ... supported ... purchasing power, and not merely the desire ... a particular commodity or service. 3. Demand is not ... influenced ... price, but also ... many other factors, such as the incomes ... the demanders and the prices ... substitutes. 4. The demand curve is the graphical representation ... the demand function. 5. It normally slopes downwards ... left ... right, which means that more is bought ... low prices than ... higher prices.

IV. Match each term in Column a with its definition in Column b:

Column A Column B

1. demand	a. Money value of a good or service.
2. the Law of Demand	b. The graphical representation of the demand function.
3. consumer	c. Explains how much a change in price affects the quantity demanded.
4. price	d. good or service whose consumption is seen as essential in order to maintain a minimum standard of living in a society.
5. demand curve	e. A consumer’s willingness and ability to buy a product or service at a particular time and place.
6. demand elasticity	f. Anyone who uses goods or services.
7. purchasing power	g. All else being equal, more items will be sold at a lower price than at a higher price.
8. necessity	h. The value of a unit of money measured in terms of what it can buy.

V. Define which of the following items best completes the statement:

1. Demand curves

a. show that consumers are willing to buy more at lower prices.

b. are the same for all goods and services.

c. match the price of a good with the amount supplied.

d. are statistical charts prepared by a government agency.

2. A typical demand curve

a. slopes downward from left to right.

b. slopes downward from right to left.

c. is usually a straight line.

d. is always a curved line.

3. Which of the following would tend to have an inelastic

demand curve?

a. complementary goods.

b. luxuries.

c. goods with substitutes.

d. necessities.

6. Say whether these statements are true or false and if they are

false say why:

1. In economic theory, demand means the amount of a commodity or service that economic units are willing to buy. 2. In economic theory demand is always effective demand. 3. Demand is only influenced by price. 4. Effective demand is always supported by merely the desire for a particular commodity or service. 5. In economic analysis, the incomes of the demanders and the prices of substitutes are frequently assumed to be constant. 6. The demand curve tells us how many units of a particular commodity or service would be sold at various prices. 7. The demand curve normally means that more is bought at low prices than at high prices.