Question 1

Which one of the following would cause an increase in the demand for hotel rooms in Hawaii?

Accepted Answer

A decrease in airfares to Hawaii would make it cheaper for people to travel to Hawaii, which would increase the demand for hotel rooms as more people will be able to afford to travel and stay in hotels.

Question 2

The Chunnel auto tunnel allows motorists to travel between England and France. As an alternative, there is ferry service across the English Channel. What would happen in the market for ferry service if fees for using the Chunnel were increased?

Accepted Answer

If the fees for using the Chunnel were increased, some travelers would likely seek alternative means of crossing the English Channel, leading to an increase in demand for ferry services as they become a more attractive option compared to the more expensive Chunnel.

Question 3

When income increases, the demand curve for an inferior good

Accepted Answer

When income increases, consumers tend to shift away from inferior goods to higher quality substitutes. As a result, the demand for inferior goods decreases, causing the demand curve to shift to the left.

Question 4

Which of the following is NOT a non-price determinant of demand?

Accepted Answer

Price of the good or service is a price determinant of demand, not a non-price determinant. The other options listed (B, C, D) are non-price determinants of demand.

Question 5

-Refer to the above figure for the market of Cheerios. Which diagram depicts the effect of an increase in the price of Cheerios?

Accepted Answer

An increase in the price of Cheerios itself would not be depicted by either graph A or B, as these graphs typically show shifts in supply or demand, not movements along the curve due to price changes of the product itself.

Question 6

Which one of the following would cause a rightward shift in the demand curve of digital cameras?

Accepted Answer

A rightward shift in the demand curve indicates an increase in demand. This can happen if a product becomes more attractive to consumers, such as through improvements in ease of use, as stated in option A. Options B and C relate to supply-side factors, and D could potentially affect supply but not demand directly.

Question 7

-Refer to the above figure. Suppose that Cheerios and Apple Jacks are substitutes. Which diagram shows the effect on the demand for Cheerios when the price of Apple Jacks cereal has decreased?

Accepted Answer

The answer of 
-Refer to the above figure. Suppose that...

Question 8

Which of the following would most likely be considered complements?

Accepted Answer

Tennis rackets and tennis balls are complements because they are used together in the activity of playing tennis. Complementary goods are items that are often used together, so the demand for one increases the demand for the other.

Question 9

All of the following cause a shift in the demand curve EXCEPT a change in the

Accepted Answer

A change in the price of the good or service results in a movement along the demand curve, not a shift. However, changes in the prices of related goods (substitutes or complements), consumer income, and the number of consumers can cause a shift in the demand curve.

Question 10

What would happen in the market for prescription drugs if people begin to view over-the-counter remedies as a good substitute for prescription medications?

Accepted Answer

If people view over-the-counter remedies as a good substitute for prescription medications, then they will have less demand for prescription medications. As a result, the demand for prescription medications will decrease, leading to a shift in the demand curve to the left.

Question 11

Which of the following are substitute goods?

Accepted Answer

Margarine and butter are both spreads used on bread or toast and can be used interchangeably. Peanut butter and jelly are complementary goods, as they are often consumed together. Pizza and beer could be considered complementary goods or independent goods, as they are often consumed together but can also be consumed separately. Sports utility vehicles and gasoline are complementary goods, as a sports utility vehicle requires gasoline to operate.

Question 12

Which of the following are complementary goods?

Accepted Answer

Sport utility vehicles and gasoline are complementary goods as SUVs require gasoline as a fuel source in order to be used.

Question 13

Which of the following is a non-price determinant of demand?

Accepted Answer

All of the options listed are non-price determinants of demand. Income, tastes and preferences, and prices of related goods and services all influence demand independently of the price of the good or service in question.

Question 14

An increase in the quantity demanded is shown by

Accepted Answer

An increase in the quantity demanded, given a decrease in price while other factors remain constant, is represented by a movement down along a demand curve. This indicates that consumers are willing to purchase more of the good at a lower price.

Question 15

-Refer to the above figure. Suppose that Cheerios and Apple Jacks are substitutes. Which diagram shows the effect on the demand for Cheerios when the price of Apple Jacks cereal has increased?

Accepted Answer

The answer of 
-Refer to the above figure. Suppose that...

Question 16

Which of the following would cause a change in the quantity demanded of a product?

Accepted Answer

A change in the quantity demanded refers specifically to a change in the amount of a product consumers are willing and able to purchase at a given price. Therefore, only a change in price (option A) would cause a change in quantity demanded. Options B and C could influence overall demand for a product, but not specifically the quantity demanded at a given price. Option D is incorrect because not all of the options listed would cause a change in quantity demanded.

Question 17

A movement along a demand curve is

Accepted Answer

A movement along a demand curve represents a change in the quantity demanded, which is caused by a change in the price of the good. This is because the demand curve shows the relationship between price and quantity demanded, all other factors being equal. A change in any other factor, such as consumers' income or preferences, would shift the entire demand curve rather than cause a movement along it.

Question 18

If the price of one good goes up and the demand of a related good goes down, the two goods are

Accepted Answer

Complements are goods that are typically used together, so an increase in the price of one good will decrease the demand for the related good. For example, if the price of hot dogs goes up, the demand for hot dog buns will likely go down because consumers will be less likely to purchase both items together.

Question 19

If a good is a normal good, an increase in income will

Accepted Answer

In the case of normal goods, an increase in income leads to an increase in demand for the good. Therefore, the correct option is B, which states that an increase in income will increase the demand for the good.

Question 20

We know that products G and H are related goods, because when the price of G increases,

Accepted Answer

Products G and H are complementary goods, which means they are used together. Therefore, if the price of G (one of the complement goods) increases, people will reduce their demand for G, leading to a decrease in the demand for the accompanying product H. Consequently, the demand curve for product H will shift to the left.

Quiz 3: Demand and Supply