Question 1

If the price of orchids falls, the substitution effect due to the price change will cause&#10;A)an increase in the demand for orchids.&#10;B)an increase in the demand for roses, a substitute for orchids.&#10;C)an increase in the quantity of orchids demanded.&#10;D)an increase in the quantity of orchids supplied.

Accepted Answer

The substitution effect occurs when consumers switch to a less expensive substitute when the price of the original good increases, or to the original good when the price of the substitute increases. In this case, the price of orchids has fallen, which means that consumers are more likely to purchase orchids instead of their substitutes. Therefore, the substitution effect due to the price change will cause an increase in the quantity of orchids demanded, not an increase in the demand for orchids or a substitute like roses. It won't affect the quantity of orchids supplied either.

Question 2

When the price of a good falls, consumers buy a larger quantity because of the ________ effect and the ________ effect.&#10;A)substitution; income&#10;B)normal; inferior&#10;C)substitute; complement;&#10;D)supply; demand

Accepted Answer

The substitution effect occurs when the price of a good falls, making it relatively cheaper compared to other goods, and consumers substitute the now cheaper good for other goods. This increases the quantity demanded of the cheaper good. The income effect occurs when the price of a good falls, which increases the real income of consumers, making them able to purchase a larger quantity of all goods, including the now cheaper good. This also increases the quantity demanded of the cheaper good. Therefore, the correct answer is A, as both the substitution and income effects result in consumers buying a larger quantity of the good when its price falls.

Question 3

Table 3-1&#10;  &#10;Refer to Table 3-1.The table above shows the demand schedules for loose-leaf tea of two individuals (Sunil and Mia)and the rest of the market.If the price of loose-leaf tea rises from $3 to $4, the market quantity demanded would&#10;A)decrease by 32 lbs.&#10;B)increase by 64 lbs.&#10;C)increase by 32 lbs.&#10;D)decrease by 64 lbs.

Accepted Answer

A

Question 4

Which of the following will shift the demand curve for a good?&#10;A)a change in the technology used to produce the good&#10;B)an increase in the price of the good&#10;C)a decrease in the price of a complementary good&#10;D)a decrease in the price of the good

Accepted Answer

The answer of Which of the following will shift the...

Question 5

If a demand curve shifts to the right, then&#10;A)demand has increased.&#10;B)quantity demanded has increased.&#10;C)demand has decreased.&#10;D)quantity demanded has decreased.

Accepted Answer

If the demand curve shifts to the right, it means that for any given price, consumers are willing to buy a higher quantity of the good, indicating an increase in demand.

Question 6

A change in all of the following variables will change the market demand for a product except&#10;A)the price of the product.&#10;B)population and demographics.&#10;C)income.&#10;D)tastes.

Accepted Answer

The price of the product will change the quantity demanded but not the demand itself. The other variables listed (population and demographics, income, and tastes) can all shift the entire demand curve.

Question 7

If, in response to an increase in the price of chocolate the quantity of chocolate demanded decreases, economists would describe this as&#10;A)a decrease in demand.&#10;B)a decrease in quantity demanded.&#10;C)a change in consumer income.&#10;D)a decrease in consumers' taste for chocolate.

Accepted Answer

When there is a change in price leading to a change in the quantity demanded, it is known as a movement along the demand curve - a decrease in the quantity demanded, in this case. This is not the same as a decrease in demand, which would imply a shift of the entire demand curve due to factors such as changes in consumer income or tastes.

Question 8

If the price of grapefruit rises, the substitution effect due to the price change will cause&#10;A)a decrease in the demand for grapefruit.&#10;B)a decrease in the demand for oranges, a substitute for grapefruit.&#10;C)a decrease in the quantity of grapefruit demanded.&#10;D)a decrease in the quantity of grapefruit supplied.

Accepted Answer

The substitution effect due to the price change means that consumers will switch to buying a substitute product instead of the now more expensive grapefruit. This will lead to a decrease in the quantity of grapefruit demanded, but not necessarily a decrease in the overall demand for grapefruit.

Question 9

The demand by all the consumers of a given good or service is the ________ for the good or service.&#10;A)market demand&#10;B)quantity demanded&#10;C)law of demand&#10;D)scheduled demand

Accepted Answer

Market demand represents the total amount of a good or service that all consumers are willing and able to purchase at different price levels. It takes into account the quantity demanded by each individual consumer in the market.

Question 10

Holding everything else constant, an increase in the price of MP3 players will result in&#10;A)a decrease in the quantity of MP3 players supplied.&#10;B)a decrease in the demand for MP3 players.&#10;C)an increase in the supply of MP3 players.&#10;D)a decrease in the quantity of MP3 players demanded.

Accepted Answer

When the price of MP3 players increases, consumers are likely to purchase fewer MP3 players, thus causing a decrease in the quantity of MP3 players demanded. This is because the higher price of MP3 players makes them relatively more expensive compared to other goods in the market, making consumers more likely to substitute them with similar but more affordable goods. As such, suppliers are likely to reduce the quantity of MP3 players available in the market to match the decrease in demand, causing a decrease in the quantity of MP3 players demanded.

Question 11

The ________ effect refers to the change in quantity demanded for a good that results from the effect of a change in the good's price on consumer's purchasing power.&#10;A)ceteris paribus&#10;B)population&#10;C)substitution&#10;D)income

Accepted Answer

The answer of The ________ effect refers to the change...

Question 12

What is the difference between an &#34;increase in demand&#34; and an &#34;increase in quantity demanded&#34;?&#10;A)There is no difference between the two terms; they both refer to a shift of the demand curve.&#10;B)An &#34;increase in demand&#34; is represented by a rightward shift of the demand curve while an &#34;increase in quantity demanded&#34; is represented by a movement along a given demand curve.&#10;C)There is no difference between the two terms; they both refer to a movement downward along a given demand curve.&#10;D)An &#34;increase in demand&#34; is represented by a movement along a given demand curve, while an &#34;increase in quantity demanded&#34; is represented by a rightward shift of the demand curve.

Accepted Answer

The answer of What is the difference between an &#34;increase...

Question 13

The income effect of a price change refers to the impact of a change in&#10;A)income on the price of a good.&#10;B)demand when income changes.&#10;C)the quantity demanded when income changes.&#10;D)the price of a good on a consumer's purchasing power.

Accepted Answer

The answer of The income effect of a price change...

Question 14

By drawing a demand curve with ________ on the vertical axis and ________ on the horizontal axis, economists assume that the most important determinant of the demand for a good is the ________ of the good.

A)quantity; price; quantity
B)price; quantity; quantity
C)price; quantity; price
D)quantity; price; price

Accepted Answer

The answer of By drawing a demand curve with ________...

Question 15

If the Apple Watch and the Samsung Gear S2 are considered substitutes, then, other things equal, an increase in the price of the Apple Watch will&#10;A)decrease the demand for the Apple Watch.&#10;B)increase the demand for the Gear S2.&#10;C)increase the quantity demanded for the Gear S2.&#10;D)increase the quantity demanded for the Apple Watch.

Accepted Answer

The answer of If the Apple Watch and the Samsung...

Question 16

The law of demand implies, holding everything else constant, that as the price of bagels increases,&#10;A)the quantity of bagels demanded will decrease.&#10;B)the demand for bagels will decrease.&#10;C)the quantity of bagels demanded will increase.&#10;D)the demand for bagels will increase.

Accepted Answer

The answer of The law of demand implies, holding everything...

Question 17

If a demand curve shifts to the left, then&#10;A)demand has increased.&#10;B)quantity demanded has increased.&#10;C)demand has decreased.&#10;D)quantity demanded has decreased.

Accepted Answer

The answer of If a demand curve shifts to the...

Question 18

Table 3-1&#10;  &#10;Refer to Table 3-1.The table above shows the demand schedules for loose-leaf tea of two individuals (Sunil and Mia)and the rest of the market.At a price of $5, the quantity demanded in the market would be&#10;A)51 lbs.&#10;B)63 lbs.&#10;C)76 lbs.&#10;D)146 lbs.

Accepted Answer

The answer of Table 3-1&#10;  &#10;Refer to Table 3-1.The...

Question 19

The market for smartwatches has begun to grow, due in part to the success of the Apple Watch.Following the successful launch of the Apple Watch in 2015, companies such as Samsung, Sony, and LG have all developed products to compete with the Apple Watch.The smartwatches introduced to compete with the Apple Watch would be considered

A)complements to the Apple Watch.
B)substitutes for the Apple Watch.
C)inferior goods compared to the Apple Watch.
D)normal goods compared to the Apple Watch.

Accepted Answer

The answer of The market for smartwatches has begun to...

Question 20

A movement along the demand curve for toothpaste would be caused by&#10;A)a change in the price of toothbrushes.&#10;B)a change in consumer income.&#10;C)a change in the price of toothpaste.&#10;D)a change in population.

Accepted Answer

The answer of A movement along the demand curve for...

Question 21

Figure 3-1&#10;  &#10;Refer to Figure 3-1.If the product represented is a normal good, a decrease in income would be represented by a movement from&#10;A)A to B.&#10;B)B to A.&#10;C)D&#8321; to D&#8322;.&#10;D)D&#8322; to D&#8321;.

Accepted Answer

The answer of Figure 3-1&#10;  &#10;Refer to Figure 3-1.If...

Question 22

The Internet has created a new category in the book selling market, namely, the &#34;barely used&#34; book.How does the availability of barely used books affect the market for new books?&#10;A)The demand curve for new books shifts to the right.&#10;B)The demand curve for new books shifts to the left.&#10;C)The supply curve for new books shifts to the right.&#10;D)The supply curve for new books shifts to the left.

Accepted Answer

The answer of The Internet has created a new category...

Question 23

Figure 3-1&#10;  &#10;Refer to Figure 3-1.If the product represented is an inferior good, an increase in income would be represented by a movement from&#10;A)A to B.&#10;B)B to A.&#10;C)D&#8321; to D&#8322;.&#10;D)D&#8322; to D&#8321;.

Accepted Answer

The answer of Figure 3-1&#10;  &#10;Refer to Figure 3-1.If...

Question 24

How does the increasing use of MP3 players affect the market for compact discs?&#10;A)The demand curve for compact discs shifts to the right.&#10;B)The supply curve for compact discs shifts to the left.&#10;C)The supply curve for compact discs shifts to the right.&#10;D)The demand curve for compact discs shifts to the left.

Accepted Answer

The answer of How does the increasing use of MP3...

Question 25

Figure 3-1&#10;  &#10;Refer to Figure 3-1.An increase in the expected future price of the product would be represented by a movement from&#10;A)A to B.&#10;B)B to A.&#10;C)D&#8321; to D&#8322;.&#10;D)D&#8322; to D&#8321;.

Accepted Answer

The answer of Figure 3-1&#10;  &#10;Refer to Figure 3-1.An...

Question 26

Tomas increased his consumption of potato chips when the price of pistachios increased.For Tomas, potato chips and pistachios are&#10;A)substitutes in consumption.&#10;B)both inferior goods.&#10;C)complements in consumption.&#10;D)both luxury goods.

Accepted Answer

The answer of Tomas increased his consumption of potato chips...

Question 27

Figure 3-1&#10;  &#10;Refer to Figure 3-1.An increase in population would be represented by a movement from&#10;A)A to B.&#10;B)B to A.&#10;C)D&#8321; to D&#8322;.&#10;D)D&#8322; to D&#8321;.

Accepted Answer

The answer of Figure 3-1&#10;  &#10;Refer to Figure 3-1.An...

Question 28

Figure 3-1&#10;  &#10;Refer to Figure 3-1.A decrease in the price of a substitute good would be represented by a movement from&#10;A)A to B.&#10;B)B to A.&#10;C)D&#8321; to D&#8322;.&#10;D)D&#8322; to D&#8321;.

Accepted Answer

The answer of Figure 3-1&#10;  &#10;Refer to Figure 3-1.A...

Question 29

Technological advances have resulted in lower prices for digital cameras.What is the impact of this on the market for traditional (non-digital)cameras?&#10;A)The demand curve for traditional cameras shifts to the right.&#10;B)The supply curve for traditional cameras shifts to the right.&#10;C)The demand curve for traditional cameras shifts to the left.&#10;D)The supply curve for traditional cameras shifts to the left.

Accepted Answer

The answer of Technological advances have resulted in lower prices...

Question 30

Suppose that when the price of hamburgers decreases, the Ruiz family increases their purchases of ketchup.To the Ruiz family,&#10;A)hamburgers and ketchup are complements.&#10;B)hamburgers and ketchup and substitutes.&#10;C)hamburgers and ketchup are normal goods.&#10;D)hamburgers are normal goods and ketchup is an inferior good.

Accepted Answer

The answer of Suppose that when the price of hamburgers...

Question 31

Figure 3-1&#10;  &#10;Refer to Figure 3-1.A decrease in the price of a complementary good would be represented by a movement from&#10;A)A to B.&#10;B)B to A.&#10;C)D&#8321; to D&#8322;.&#10;D)D&#8322; to D&#8321;.

Accepted Answer

The answer of Figure 3-1&#10;  &#10;Refer to Figure 3-1.A...

Question 32

Suppose that when the price of raspberries increases, Lonnie increases his purchases of papayas.To Lonnie,&#10;A)raspberries and papayas are complements.&#10;B)raspberries and papayas are inferior goods.&#10;C)raspberries and papayas are normal goods.&#10;D)raspberries and papayas are substitutes.

Accepted Answer

The answer of Suppose that when the price of raspberries...

Question 33

If the price of automobiles was to increase, then&#10;A)the demand for gasoline would decrease.&#10;B)the demand for gasoline would increase.&#10;C)the supply of gasoline would increase.&#10;D)the quantity of gasoline demanded would decrease.

Accepted Answer

The answer of If the price of automobiles was to...

Question 34

Figure 3-1&#10;  &#10;Refer to Figure 3-1.A decrease in taste or preference would be represented by a movement from&#10;A)A to B.&#10;B)B to A.&#10;C)D&#8321; to D&#8322;.&#10;D)D&#8322; to D&#8321;.

Accepted Answer

The answer of Figure 3-1&#10;  &#10;Refer to Figure 3-1.A...

Question 35

If the price of music downloads was to decrease, then&#10;A)the demand for MP3 players would decrease.&#10;B)the demand for MP3 players would increase.&#10;C)the supply of MP3 players would increase.&#10;D)the quantity of MP3 players demanded would decrease.

Accepted Answer

The answer of If the price of music downloads was...

Question 36

If an increase in income leads to a decrease in the demand for popcorn, then popcorn is&#10;A)an inferior good.&#10;B)a neutral good.&#10;C)a necessity.&#10;D)a normal good.

Accepted Answer

The answer of If an increase in income leads to...

Question 37

Studies have shown links between calcium consumption and a reduction in osteoporosis.How does this affect the market for calcium?&#10;A)The calcium supply curve shifts to the right because of a change in tastes in favor of calcium.&#10;B)The calcium demand curve shifts to the right because of a change in tastes in favor of calcium.&#10;C)The calcium demand curve shifts to the left because this new information will increase the price of calcium.&#10;D)The calcium supply curve shifts to the left because this new information will increase the price of calcium.

Accepted Answer

The answer of Studies have shown links between calcium consumption...

Question 38

Elvira decreased her consumption of bananas when the price of peanut butter increased.For Elvira, peanut butter and bananas are&#10;A)substitutes in consumption.&#10;B)both inferior goods.&#10;C)complements in consumption.&#10;D)both luxury goods.

Accepted Answer

The answer of Elvira decreased her consumption of bananas when...

Question 39

If an increase in income leads to in an increase in the demand for peanut butter, then peanut butter is&#10;A)a neutral good.&#10;B)a normal good.&#10;C)a necessity.&#10;D)a complement.

Accepted Answer

The answer of If an increase in income leads to...

Question 40

Figure 3-1&#10;  &#10;Refer to Figure 3-1.A decrease in the price of the product would be represented by a movement from&#10;A)A to B.&#10;B)B to A.&#10;C)D&#8321; to D&#8322;.&#10;D)D&#8322; to D&#8321;.

Accepted Answer

The answer of Figure 3-1&#10;  &#10;Refer to Figure 3-1.A...

Question 41

Which of the following generation categories has the largest population in the United States in 2015?&#10;A)the millennials&#10;B)generation X&#10;C)the baby boomers&#10;D)the centenarians

Accepted Answer

The answer of Which of the following generation categories has...

Question 42

If a decrease in income leads to a decrease in the demand for mac and cheese, then mac and cheese is&#10;A)a normal good.&#10;B)a neutral good.&#10;C)a complement.&#10;D)a necessity.

Accepted Answer

The answer of If a decrease in income leads to...

Question 43

Tom Searchinger, a senior attorney at the Environmental Defense Fund, observed that generous farm subsidies have encouraged farmers to produce more corn and more wheat.How does this affect the market for fertilizer?

A)The supply of fertilizer increases.
B)The supply of fertilizer decreases.
C)The demand for fertilizer increases.
D)The demand for fertilizer decreases.

Accepted Answer

The answer of Tom Searchinger, a senior attorney at the...

Question 44

Buyers rush to purchase stocks in California vineyards following a forecast of a 30 percent decline in this year's grape harvest.What happens in the California wine market as a result of this announcement?

A)The demand curve for California wine shifts to the left in anticipation of higher prices in the future.
B)The demand curve for California wine shifts to the right in anticipation of higher prices in the future.
C)The supply curve for California wine shifts to the right in anticipation of higher prices in the future.
D)The supply curve for California wine shifts to the left in anticipation of lower quantities in the future.

Accepted Answer

The answer of Buyers rush to purchase stocks in California...

Question 45

Technological advancements have led to lower prices and an increase in the sale of digital cameras.How does this affect the digital photo printing paper market?&#10;A)The demand curve for digital photo printing paper shifts to the right.&#10;B)The demand curve for digital photo printing paper shifts to the left.&#10;C)The supply curve for digital photo printing paper shifts to the right.&#10;D)The supply curve for digital photo printing paper shifts to the left.

Accepted Answer

The answer of Technological advancements have led to lower prices...

Question 46

If smartwatches are considered substitutes for smartphones, then the decline in the price of smartwatches would, all else equal,&#10;A)increase the demand for smartphones.&#10;B)decrease the demand for smartphones.&#10;C)increase the quantity of smartphones demanded.&#10;D)decrease the quantity of smartphones demanded.

Accepted Answer

The answer of If smartwatches are considered substitutes for smartphones,...

Question 47

Table 3-2&#10;  &#10;Refer to Table 3-2.The table above shows the demand schedules for caviar of two individuals (Ari and Sonia)and the rest of the market.At a price of $75, the quantity demanded in the market would be&#10;A)6 oz.&#10;B)46 oz.&#10;C)52 oz.&#10;D)127 oz.

Accepted Answer

The answer of Table 3-2&#10;  &#10;Refer to Table 3-2.The...

Question 48

Table 3-2&#10;  &#10;Refer to Table 3-2.The table above shows the demand schedules for caviar of two individuals (Ari and Sonia)and the rest of the market.If the price of caviar falls from $45 to $35, the market quantity demanded would&#10;A)decrease by 50 oz.&#10;B)increase by 70 oz.&#10;C)increase by 50 oz.&#10;D)decrease by 70 oz.

Accepted Answer

The answer of Table 3-2&#10;  &#10;Refer to Table 3-2.The...

Question 49

Which of the following has occurred as the millennial generation has come of age?&#10;A)The demand for &#34;fast casual&#34; food has decreased in the U.S. market.&#10;B)The demand for golf equipment has decreased in the U.S. market.&#10;C)The demand for traditional fast food has increased in the U.S. market.&#10;D)all of the above

Accepted Answer

The answer of Which of the following has occurred as...

Question 50

In June, buyers of titanium expect that the price of titanium will fall in July.What happens in the titanium market in June, holding everything else constant?&#10;A)The demand curve shifts to the right.&#10;B)The quantity demanded increases.&#10;C)The quantity demanded decreases.&#10;D)The demand curve shifts to the left.

Accepted Answer

The answer of In June, buyers of titanium expect that...

Question 51

Table 3-2&#10;  &#10;Refer to Table 3-2.The table above shows the demand schedules for caviar of two individuals (Ari and Sonia)and the rest of the market.If the price of caviar rises from $65 to $75, the market quantity demanded would&#10;A)decrease by 36 oz.&#10;B)increase by 52 oz.&#10;C)increase by 36 oz.&#10;D)decrease by 52 oz.

Accepted Answer

The answer of Table 3-2&#10;  &#10;Refer to Table 3-2.The...

Question 52

A change in which variable will change the market demand for a product?&#10;A)the price of the product&#10;B)population&#10;C)technology&#10;D)the prices of substitutes in production

Accepted Answer

The answer of A change in which variable will change...

Question 53

Holding everything else constant, a decrease in the price of bicycles will result in&#10;A)a decrease in the quantity of bicycles demanded.&#10;B)an increase in the demand for bicycles.&#10;C)a decrease in the supply of bicycles.&#10;D)an increase in the quantity of bicycles demanded.

Accepted Answer

The answer of Holding everything else constant, a decrease in...

Question 54

The law of demand implies, holding everything else constant, that as the price of gelato&#10;A)increases, the demand for gelato will increase.&#10;B)increases, the quantity of gelato demanded will increase.&#10;C)decreases, the quantity of gelato demanded will increase.&#10;D)decreases, the demand for gelato will increase.

Accepted Answer

The answer of The law of demand implies, holding everything...

Question 55

If, in response to a decrease in the price of grapes, the quantity of grapes demanded increases, economists would describe this as&#10;A)an increase in demand.&#10;B)an increase in quantity demanded.&#10;C)a change in consumer income.&#10;D)an increase in consumers' taste for grapes.

Accepted Answer

The answer of If, in response to a decrease in...

Question 56

The phrase &#34;demand has decreased&#34; means that&#10;A)a demand curve has shifted to the left.&#10;B)there has been an upward movement along a demand curve.&#10;C)there has been a downward movement along a demand curve.&#10;D)a demand curve has shifted to the right.

Accepted Answer

The answer of The phrase &#34;demand has decreased&#34; means that&#10;A)a...

Question 57

In January, buyers of gold expect that the price of gold will rise in February.What happens in the gold market in January, holding all else constant?&#10;A)The supply curve shifts to the right.&#10;B)The demand curve shifts to the left.&#10;C)The demand curve shifts to the right.&#10;D)The quantity demanded increases.

Accepted Answer

The answer of In January, buyers of gold expect that...

Question 58

Table 3-2&#10;  &#10;Refer to Table 3-2.The table above shows the demand schedules for caviar of two individuals (Ari and Sonia)and the rest of the market.At a price of $55, the quantity demanded in the market would be&#10;A)42 oz.&#10;B)136 oz.&#10;C)178 oz.&#10;D)233 oz.

Accepted Answer

The answer of Table 3-2&#10;  &#10;Refer to Table 3-2.The...

Question 59

A(n)________ is represented by a leftward shift of the demand curve while a(n)________ is represented by a movement along a given demand curve.&#10;A)decrease in demand; increase in demand&#10;B)decrease in demand; increase in quantity demanded&#10;C)increase in demand; decrease in quantity demanded&#10;D)decrease in quantity demanded; decrease in demand

Accepted Answer

The answer of A(n)________ is represented by a leftward shift...

Question 60

A firm must devote people, time, and money to designing a new product.Because any firm has only limited resources, it&#10;A)should wait until its competitors develop a similar product before deciding on devoting resources to its own product development.&#10;B)is not able to develop more than one new product at a time.&#10;C)must be certain that the product it chooses to develop will be successful or it will not be able to stay in business.&#10;D)faces a trade-off, because resources used to develop one product will not be available to develop another product.

Accepted Answer

The answer of A firm must devote people, time, and...

Question 61

If a decrease in income leads to an increase in the demand for sardines, then sardines are&#10;A)an inferior good.&#10;B)a neutral good.&#10;C)a necessity.&#10;D)a normal good.

Accepted Answer

The answer of If a decrease in income leads to...

Question 62

If consumers believe the price of iPads will decrease in the future, this will cause the demand for iPads to decrease now.

Accepted Answer

The answer of If consumers believe the price of iPads...

Question 63

If the price of peaches, a substitute for plums, decreases the demand for plums will increase.

Accepted Answer

The answer of If the price of peaches, a substitute...

Question 64

The substitution effect explains why there is a direct relationship between the price of a product and the quantity of the product demanded.

Accepted Answer

The answer of The substitution effect explains why there is...

Deck 3: Where Prices Come From: the Interaction of Demand and Supply