Question 1

4.4 Market Effects of Changes in Demand
 
-Figure 4.3 illustrates the demand for tacos. Assume tacos are an inferior good. An increase in income would bring about a movement from

Accepted Answer

Inferior goods are those for which demand decreases as income increases. Moving from D2 to D1 represents a decrease in demand, which aligns with the behavior expected when income increases for an inferior good like tacos.

Question 2

Governments sometime create an excess supply of a product by setting a minimum price that is greater than the equilibrium price, resulting in a permanent excess supply of the product. This is known as a price ceiling.

Accepted Answer

This statement is incorrect. A price ceiling is actually a maximum price set by the government that is below the equilibrium price, resulting in a permanent excess demand of the product.

Question 3

4.4 Market Effects of Changes in Demand
 
-Figure 4.3 illustrates the demand for tacos. A successful advertising campaign to sell tacos would bring about a movement from

Accepted Answer

A successful advertising campaign would increase the demand for tacos, shifting the demand curve to the right, from D0 to D1, indicating a higher quantity demanded at each price level.

Question 4

4.4 Market Effects of Changes in Demand
 
-Figure 4.3 illustrates the demand for tacos. Assume that tacos and beer are complements. An increase in the price of beer would bring about a movement from

Accepted Answer

When the price of a complement good (like beer for tacos) increases, the demand for the related good (tacos) decreases, shifting the demand curve leftward from D2 to D1.

Question 5

4.4 Market Effects of Changes in Demand
 
-Figure 4.3 illustrates the demand for tacos. An increase in the demand for tacos is represented by the movement from

Accepted Answer

An increase in demand for tacos is represented by a shift of the demand curve to the right, from D0 to D1, indicating that at the same price, more tacos are demanded.

Question 6

Suppose that consumers expect that the price of a product will increase in the future. The result is that

Accepted Answer

When consumers expect the price of a product to increase in the future, they may buy more of the product now in order to avoid paying the higher price later. This creates an increase in the current demand for the product.

Question 7

4.4 Market Effects of Changes in Demand
 
-Figure 4.3 illustrates the demand for tacos. A decrease in the demand for tacos is represented by the movement from

Accepted Answer

A decrease in demand is shown by a leftward shift of the demand curve. In this case, the demand curve shifts from D2 to D1, indicating a decrease in demand for tacos.

Question 8

4.4 Market Effects of Changes in Demand
 
-Figure 4.3 illustrates the demand for tacos. A decrease in price of tacos would bring about a movement from

Accepted Answer

A decrease in price of tacos would shift the demand curve to the right, from D0 to D2. This would lead to an increase in the quantity demanded of tacos, moving from point a to point c.

Question 9

Assume that tortilla chips and salsa are complements. When the price of tortilla chips decreases

Accepted Answer

When the price of tortilla chips decreases, people are more likely to buy tortilla chips. As a result, they are also more likely to want to buy salsa to go with the chips. This means that the demand for salsa increases, making choice A the correct answer.

Question 10

4.4 Market Effects of Changes in Demand
 
-Figure 4.3 illustrates the demand for tacos. An increase in price of tacos would bring about a movement from

Accepted Answer

An increase in price of tacos would lead to a decrease in demand, resulting in a movement along the demand curve from point c to point a.

Question 11

When the price of almonds falls

Accepted Answer

When the price of almonds falls, the quantity of almonds demanded increases ceteris paribus due to the law of demand. As the price decreases, consumers are willing and able to purchase more almonds at the new lower price. However, this change in price does not necessarily affect the overall demand for almonds, which is determined by various factors such as income, tastes and preferences, and availability of substitutes.

Question 12

Assume that coffee and tea are substitutes. When the price of coffee increases

Accepted Answer

When the price of coffee increases, consumers may switch to drinking more tea instead, leading to an increase in the demand for tea. This is because coffee and tea are substitutes, meaning that they can be easily interchanged in consumption.

Question 13

4.4 Market Effects of Changes in Demand
 
-Figure 4.3 illustrates the demand for tacos. Assume that tacos and burritos are substitutes. A decrease in the price of burritos would bring about a movement from

Accepted Answer

A decrease in the price of burritos, which are substitutes for tacos, would decrease the demand for tacos, shifting the demand curve from D2 to D0.

Question 14

Landon demands more sushi as his income increases. From this we can conclude that, for Landon,

Accepted Answer

A normal good is a product that people demand more of as their income increases. Landon's demand for sushi increases as his income increases, indicating that sushi is a normal good for him.

Question 15

4.4 Market Effects of Changes in Demand
 
-Figure 4.3 illustrates the demand for tacos. An increase in the number of consumers in the market would bring about a movement from

Accepted Answer

An increase in the number of consumers in the market for tacos would increase the demand for tacos, shifting the demand curve to the right, from D0 to D2.

Question 16

Suppose that a product benefits from a successful advertising campaign. The result is that

Accepted Answer

A successful advertising campaign is intended to create awareness and promote a product, which ultimately leads to an increase in demand from consumers. Therefore, the correct choice is A) the demand for the product increases.

Question 17

4.4 Market Effects of Changes in Demand
 
-Figure 4.3 illustrates the demand for tacos. Assume tacos are a normal good. An increase in income would bring about a movement from

Accepted Answer

An increase in income, assuming tacos are a normal good, would increase the demand for tacos. This is represented by a shift of the demand curve to the right, from D0 to D1, indicating a higher quantity demanded at each price level.

Question 18

When the price of apples goes up

Accepted Answer

The law of demand states that as the price of a good increases, the quantity of that good demanded by consumers will decrease, ceteris paribus (all other factors held constant). Therefore, when the price of apples goes up, consumers will be less willing and able to buy the same quantity of apples they were buying before, leading to a decrease in the quantity of apples demanded.

Question 19

4.4 Market Effects of Changes in Demand
 
-Figure 4.3 illustrates the demand for tacos. If people expect the price of tacos to decrease in the near future, this would most likely bring about a movement from

Accepted Answer

Expectations of a future price decrease would likely cause consumers to wait to purchase, decreasing current demand and shifting the demand curve leftward from D2 to D0.

Question 20

4.4 Market Effects of Changes in Demand
 
-Figure 4.3 illustrates the demand for tacos. Assume that tacos and beer are complements. A decrease in the price of beer would bring about a movement from

Accepted Answer

When the price of beer decreases, people are likely to buy more beer, and since tacos and beer are complements, the demand for tacos will increase as well. This is represented by a shift of the demand curve to the right, from D0 to D2.

Quiz 4: Demand, Supply, and Market Equilibrium

4.4 Market Effects of Changes in Demand -Figure 4.3 illustrates the demand for tacos. Assume tacos are an inferior good. An increase in income would bring about a movement from

Governments sometime create an excess supply of a product by setting a minimum price that is greater than the equilibrium price, resulting in a permanent excess supply of the product. This is known as a price ceiling.

4.4 Market Effects of Changes in Demand -Figure 4.3 illustrates the demand for tacos. A successful advertising campaign to sell tacos would bring about a movement from

4.4 Market Effects of Changes in Demand -Figure 4.3 illustrates the demand for tacos. Assume that tacos and beer are complements. An increase in the price of beer would bring about a movement from

4.4 Market Effects of Changes in Demand -Figure 4.3 illustrates the demand for tacos. An increase in the demand for tacos is represented by the movement from

Suppose that consumers expect that the price of a product will increase in the future. The result is that

4.4 Market Effects of Changes in Demand -Figure 4.3 illustrates the demand for tacos. A decrease in the demand for tacos is represented by the movement from

4.4 Market Effects of Changes in Demand -Figure 4.3 illustrates the demand for tacos. A decrease in price of tacos would bring about a movement from

Assume that tortilla chips and salsa are complements. When the price of tortilla chips decreases

4.4 Market Effects of Changes in Demand -Figure 4.3 illustrates the demand for tacos. An increase in price of tacos would bring about a movement from

When the price of almonds falls

Assume that coffee and tea are substitutes. When the price of coffee increases

4.4 Market Effects of Changes in Demand -Figure 4.3 illustrates the demand for tacos. Assume that tacos and burritos are substitutes. A decrease in the price of burritos would bring about a movement from

Landon demands more sushi as his income increases. From this we can conclude that, for Landon,

4.4 Market Effects of Changes in Demand -Figure 4.3 illustrates the demand for tacos. An increase in the number of consumers in the market would bring about a movement from

Suppose that a product benefits from a successful advertising campaign. The result is that

4.4 Market Effects of Changes in Demand -Figure 4.3 illustrates the demand for tacos. Assume tacos are a normal good. An increase in income would bring about a movement from

When the price of apples goes up

4.4 Market Effects of Changes in Demand -Figure 4.3 illustrates the demand for tacos. If people expect the price of tacos to decrease in the near future, this would most likely bring about a movement from

4.4 Market Effects of Changes in Demand -Figure 4.3 illustrates the demand for tacos. Assume that tacos and beer are complements. A decrease in the price of beer would bring about a movement from