Question 1

What does a market demand curve reflect?

Accepted Answer

A market demand curve reflects how much all buyers are willing and able to buy at each possible price. It shows the relationship between the price of a good or service and the quantity of that good or service that consumers are willing to buy.

Question 2

If Francis receives a decrease in his pay,what would we expect?

Accepted Answer

When there is a decrease in pay, the demand for inferior goods (cheap and low-quality goods) tends to increase as people switch to cheaper alternatives. As Francis is experiencing a decrease in pay, it can be expected that his demand for inferior goods would increase.

Question 3

Suppose that a decrease in the price of X results in less of good Y sold.What are X and Y called?

Accepted Answer

X and Y are called substitute goods. A decrease in the price of X leads consumers to switch to X as a substitute for Y, resulting in less of Y sold.

Question 4

You lose your job and as a result,you buy fewer mystery books.What does this show that you consider mystery books to be?

Accepted Answer

The answer of You lose your job and as a...

Question 5

To find the market demand for a product,how are individual demand curves summed?

Accepted Answer

Individual demand curves are summed horizontally in order to find the market demand for a product. This is because the quantity demanded at each price point is added together across all individuals in the market.

Question 6

What does the number of buyers affect?

Accepted Answer

The number of buyers affects the market demand curve as it represents the total demand of a product or service in a market. An increase in the number of buyers would lead to an overall increase in demand and a shift in the demand curve to the right. Conversely, a decrease in the number of buyers would lead to a decrease in overall demand and a shift in the demand curve to the left.

Question 7

Which of the following would NOT affect an individual's demand curve?

Accepted Answer

The number of buyers would affect the market demand curve, but not an individual's demand curve. An individual's demand curve represents their own personal preferences and willingness to purchase a good at various prices, and is not directly impacted by the number of other buyers in the market.

Question 8

On what basis is a good considered either a normal good or an inferior good?

Accepted Answer

The answer of On what basis is a good considered...

Question 9

Table 4-3
The table shows individual demand schedules for a market.
 $\begin{array}{|l|c|c|c|l|}
\hline \text { Price of the Good } & \text { Aaron } & \text { Angela } & \text { Austin } & \text { Alyssa } \
\hline \$ 0.00 & 20 & 16 & 10 & 8 \
\hline 0.50 & 18 & 12 & 6 & 6 \
\hline 1.00 & 14 & 10 & 2 & 5 \
\hline 1.50 & 12 & 8 & 0 & 4 \
\hline 2.00 & 6 & 6 & 0 & 2 \
\hline 2.50 & 0 & 4 & 0 & 0 \
\hline
\end{array}$
-Refer to the Table 4-3.What happens if the price increases from $1.00 to $1.50?

Accepted Answer

As seen in the table, at a price of $1.00, the total quantity demanded in the market is 25 units (14+10+2+5). When the price increases to $1.50, the total quantity demanded decreases to 18 units (12+8+0+4). This is a decrease of 7 units in the quantity demanded in the market. Therefore, the correct answer is D. Option A is incorrect as it suggests an increase in market demand which is not reflected in the table. Option B is incorrect as it suggests only a change in quantity demanded rather than the overall market demand. Option C is also incorrect as without additional information, we cannot predict individual demand changes.

Question 10

Currently you purchase six packages of hot dogs a month.You graduate in December and will start your new job on January 2.You have no plans to purchase hot dogs in January.What are hot dogs for you?

Accepted Answer

Since the demand for hot dogs decreases when the income increases, hot dogs are classified as inferior goods. The fact that the person does not plan to purchase hot dogs after graduation shows that their income has increased, which confirms that hot dogs are an inferior good.

Question 11

If Francis receives an increase in his pay,what would we expect?

Accepted Answer

The answer of If Francis receives an increase in his...

Question 12

Which of the following would NOT be a determinant of demand?

Accepted Answer

The prices of the inputs used to produce the good would affect the supply of the good, not the demand for it. Therefore, option D is not a determinant of demand. Options A, B, and C are all determinants of demand as they affect the willingness and ability of consumers to purchase a good.

Question 13

When economists are interested in how markets work,what do they most often work with?

Accepted Answer

Economists most often work with the market demand curve to understand how prices and quantities interact in a market. This curve represents the total quantity of a good or service that buyers are willing and able to purchase at various prices, taking into account all individual demand curves.

Question 14

If a decrease in income increases the demand for a good,what is the good called?

Accepted Answer

An inferior good is a good whose demand increases as consumer income decreases. Therefore, if a decrease in income increases the demand for a good, that good is an inferior good.

Question 15

Which of the following is NOT a determinant of demand?

Accepted Answer

Technology is not a determinant of demand. The determinants of demand include tastes and preferences, income, the price of related goods, number of buyers, and expectations about future prices and income.

Question 16

If a good is "normal," what will an increase in income result in?

Accepted Answer

With a normal good, an increase in income results in an increase in demand for the good. This is because as consumers become more affluent, they are willing to purchase more of the good.

Question 17

What is market demand?

Accepted Answer

Market demand is the horizontal summation of individual demand curves. This means that the total quantity demanded in the market at a given price is the sum of the quantities demanded by each individual consumer. It is important to note that market demand is influenced by changes in tastes and preferences, as well as changes in the number of buyers and sellers in the market.

Question 18

If the price of a substitute to good X increases,what will happen?

Accepted Answer

When the price of a substitute to good X increases, consumers are likely to switch their consumption towards good X, leading to an increase in demand for good X.

Question 19

Table 4-3
The table shows individual demand schedules for a market.
 $\begin{array}{|l|c|c|c|l|}
\hline \text { Price of the Good } & \text { Aaron } & \text { Angela } & \text { Austin } & \text { Alyssa } \
\hline \$ 0.00 & 20 & 16 & 10 & 8 \
\hline 0.50 & 18 & 12 & 6 & 6 \
\hline 1.00 & 14 & 10 & 2 & 5 \
\hline 1.50 & 12 & 8 & 0 & 4 \
\hline 2.00 & 6 & 6 & 0 & 2 \
\hline 2.50 & 0 & 4 & 0 & 0 \
\hline
\end{array}$
-Refer to the Table 4-3.When the price of the good is $1.00,what is the quantity demanded in this market?

Accepted Answer

The answer of Table 4-3
The table shows individual demand schedules...

Question 20

What is an example of an inferior good?

Accepted Answer

An inferior good is a good whose demand decreases when income increases. In this case, one-ply toilet paper is an example of an inferior good because as income increases, people tend to choose higher quality, two-ply or three-ply toilet paper, thereby decreasing the demand for one-ply.

Quiz 4: The Market Forces of Supply and Demand (PART 1)