Question 1

When economists say the demand for a product has increased,they mean the

Accepted Answer

When economists say the demand for a product has increased, they mean that the demand curve has shifted to the right. This means that at each price, consumers are willing to buy more of the product than before. It does not necessarily mean that the price has fallen, or that the cost of producing the product has risen, or that the amount of the product that consumers are willing to purchase at various prices has decreased.

Question 2

For a typical product,a decrease in consumer income will cause the market demand for the product to

Accepted Answer

When consumer income decreases, consumers typically have less money to spend on goods and services. This leads to a decrease in the demand for normal goods, like a typical product, causing a shift to the left of the demand curve. In other words, at any given price, consumers are willing and able to buy less of the product.

Question 3

Other things being equal,the effect of an increase in the price of orange juice would be illustrated by

Accepted Answer

An increase in the price of orange juice would result in a movement along the demand curve for orange juice. This is because other things being equal, consumers would want to purchase less orange juice at a higher price, resulting in a decrease in quantity demanded. As a result, there would be an upward movement along the demand curve, with a higher price corresponding to a lower quantity demanded.

Question 4

When economists say the quantity demanded of a product has increased,they mean the

Accepted Answer

The answer of When economists say the quantity demanded of...

Question 5

In which statement(s)is "demand" used correctly?
(I)"An increase in the price of hot dogs will reduce the demand for hot dogs."
(II)"An increase in the price of hot dogs will reduce the demand for hot dog buns."

Accepted Answer

The answer of In which statement(s)is "demand" used correctly?
(I)"An increase...

Question 6

When economists say the quantity demanded of a product has decreased,they mean the

Accepted Answer

The answer of When economists say the quantity demanded of...

Question 7

If people expect the price of coffee to rise next month,the demand for coffee will

Accepted Answer

If people expect the price of coffee to rise next month, they will want to buy more coffee now before the price goes up. This will result in an increase in the demand for coffee now.

Question 8

In which statement(s)are "demand" and "quantity demanded" used correctly?
(I)"An increase in the price of coffee will reduce the quantity demanded of coffee."
(II)"An increase in the price of coffee will reduce the demand for cream used in coffee."

Accepted Answer

The answer of In which statement(s)are "demand" and "quantity demanded"...

Question 9

Which of the following best represents the effects of a decrease in the price of tomato juice,other things being equal?

Accepted Answer

A decrease in price would lead to a higher quantity demanded, resulting in a downward movement along the demand curve. A rightward shift in the demand curve would occur if there was an increase in demand from other factors such as changes in consumer preferences or an increase in population size. A leftward shift in the demand curve would occur if there was a decrease in demand from factors such as a decrease in consumer income or availability of substitute goods.

Question 10

An increase in the price of a good would

Accepted Answer

According to the law of demand, as the price of a good increases, the quantity demanded of that good decreases. Therefore, an increase in the price of a good would decrease the quantity demanded for the good.

Question 11

Other things constant,a decrease in consumer income will

Accepted Answer

A decrease in consumer income will likely result in a decrease in demand for luxury items, such as large-screen television sets. This will cause a leftward shift in the demand curve for these products. Therefore, choice A is the best answer.

Question 12

Other things being equal,the effect of a decrease in the price of orange juice would be illustrated by

Accepted Answer

A decrease in the price of orange juice would lead to an increase in the quantity demanded of orange juice, as consumers would be more willing and able to purchase more of the product at a lower price. This movement along the demand curve would not cause a shift in the curve itself. Therefore, the correct answer is B, an increase in the quantity demanded of orange juice.

Question 13

For a typical product,an increase in consumer income will cause the market demand for the product to

Accepted Answer

An increase in consumer income will lead to an increase in purchasing power, which in turn can lead to an increase in demand for a product. This will cause an upward shift of the demand curve, resulting in a new equilibrium with a higher quantity demanded at a higher price.

Question 14

If consumer tastes are changing more in favor of the consumption of a particular good the

Accepted Answer

Consumer tastes shifting in favor of a particular good would lead to an increase in demand for that good. This would cause the market demand curve to shift to the right. Option A is incorrect because a leftward shift in the demand curve would indicate a decrease in demand, which is the opposite of what happens when consumer tastes change in favor of a good. Options B and C are both incorrect because they suggest a decrease in quantity demanded, which is not consistent with an increase in demand. Option D is also incorrect because an increase in quantity demanded would require a shift to a new demand curve, not movement along an existing one.

Question 15

Other things constant,an increase in consumer income will

Accepted Answer

An increase in consumer income will shift the demand curve for automobiles to the right. This is because consumers will have more purchasing power and are likely to buy more automobiles at any given price, leading to an increase in the quantity demanded of automobiles.

Question 16

When economists say the demand for a product has decreased,they mean

Accepted Answer

When economists say the demand for a product has decreased, it means the demand curve has shifted to the left. This indicates that consumers are now willing and able to buy less of the product at each possible price, which results in a decrease in the quantity demanded at any given price.

Question 17

An increase in the demand for a good means that

Accepted Answer

An increase in demand means that consumers are willing to purchase more of the good at each possible price. This is reflected by a shift to the right of the demand curve.

Question 18

Which of the following would lead to an increase in the demand for computer software?

Accepted Answer

A decrease in the price of personal computers would lead to an increase in the demand for computer software, as more people would be able to afford to purchase computers, creating a larger market for software products. A decrease in the price of computer software (choice A) might also lead to an increase in demand, but this relationship is not always straightforward, as lower prices may also signal lower quality or value in the eyes of consumers. A decrease in the cost of producing computer software (choice C) would likely lead to a decrease in the price of software and may increase demand, but it is not certain. An decrease in personal income (choice D) would likely lead to a decrease in demand for many goods and services, including computer software, as people have less disposable income to spend.

Question 19

Which of the following is least likely to increase the demand for new tires?

Accepted Answer

A decrease in the price of tires would actually increase the demand for new tires, not decrease it. The other choices would all likely increase the demand for new tires.

Question 20

Which of the following would lead to an increase in the demand for designer blue jeans?

Accepted Answer

An increase in income among youthful Americans would lead to an increase in demand for designer blue jeans as they would have more disposable income to spend on luxury clothing items. A decrease in the price of designer blue jeans (A) and a reduction in the price of cotton used to produce the jeans (B) would lead to a decrease in the price of the jeans and may increase demand slightly, but not as significantly as an increase in income. An increase in the price of cotton used to produce the jeans (D) would lead to an increase in the cost of production, which could lead to an increase in the price of the jeans, but would not necessarily increase demand.

Quiz 3: Asupply,demand,and the Market Process