Question 1

Which of the following would not cause an increase in demand for tennis balls?

Accepted Answer

A decrease in the price of tennis balls would not cause an increase in demand for tennis balls, as it would only result in a movement along the current demand curve. The other options, such as a reduction in the price of tennis racquets, an unusually sunny fall and winter, and an increase in the popularity of tennis, could shift the demand curve to the right, causing an increase in demand for tennis balls.

Question 2

​Exhibit 4-4 
-Refer to Exhibit 4-4. A change from Point A to Point C represents a(n):

Accepted Answer

Moving from Point A to Point C on the same demand curve indicates a movement along the curve due to a change in price, which is described as an increase in quantity demanded, not a shift in the demand curve itself.

Question 3

​Exhibit 4-4 
-Refer to Exhibit 4-4. A change from Point A to Point B represents a(n):

Accepted Answer

The answer of ​Exhibit 4-4 
-Refer to Exhibit 4-4. A...

Question 4

Today's demand curve for gasoline could shift in response to

Accepted Answer

A change in the expected future price of gasoline can shift today's demand curve for gasoline as consumers adjust their current buying behavior in anticipation of future price changes. Changes in the current price of gasoline affect the quantity demanded rather than shifting the demand curve itself, and changes in the number of sellers affect the supply side, not demand.

Question 5

If Eric expects to earn more income next month, he may choose to

Accepted Answer

The answer of If Eric expects to earn more income...

Question 6

CNN announces that bad weather in Central America has greatly reduced the number of cocoa bean plants, and, as a result, it is expected that the price of chocolate will rise in the near future. As a result:

Accepted Answer

The decrease in the supply of cocoa beans will lead to an increase in the costs of production for chocolate manufacturers. This increase in production costs will result in higher prices for chocolate, which will lead to a decrease in the quantity demanded. However, since chocolate is a relatively inelastic product, this decrease in quantity demanded will not be enough to offset the increase in price. As a result, the current market demand for chocolate will increase.

Question 7

Suppose Sprite and 7-Up are considered by consumers to be substitutes. The likely economic impact of a decrease in the price of 7-Up is a:

Accepted Answer

When the price of 7-Up decreases, consumers are likely to buy more 7-Up instead of Sprite, leading to a decrease in the demand for Sprite. This is represented by a leftward shift of the demand curve for Sprite.

Question 8

Which of the following would be most likely to cause an outward shift of the demand curve for electricity?

Accepted Answer

An increase in the price of heating oil would likely cause an outward shift of the demand curve for electricity because consumers may switch from using heating oil to electricity for heating, thus increasing the demand for electricity.

Question 9

When the price of automobile insurance increases sharply, the likely impact on the market for automobiles is:

Accepted Answer

An increase in the price of automobile insurance represents an increase in the cost of owning and operating a vehicle. This increase in cost is likely to decrease the demand for automobiles as consumers are less willing to pay the higher overall cost of owning a car. Thus, the likely impact on the market for automobiles is a decrease in demand.

Question 10

Today, people changed their expectations about the future. This change

Accepted Answer

When people change their expectations about the future, it can affect their purchasing decisions and demand today. For example, if people expect that the price of a certain good will increase in the future, they may buy more of it today, leading to an increase in demand now. Therefore, changing expectations about the future can influence current demand.

Question 11

The price of automobiles has increased sharply lately. As a result, automobile dealers have noticed that:

Accepted Answer

When the price of automobiles increases sharply, it leads to a decrease in the quantity demanded by consumers. This is because higher prices make it less affordable for consumers to purchase automobiles, resulting in decreased demand. Therefore, the best choice is D.

Question 12

​Exhibit 4-4 
-Refer to Exhibit 4-4. A change from Point A to Point E represents a(n):

Accepted Answer

The movement from Point A to Point E represents a decrease in demand. This is because the quantity demanded decreases as the price increases, shown by the movement along the demand curve from Point A to Point E.

Question 13

According to the substitution effect, an increase in the price of oranges will:

Accepted Answer

The substitution effect suggests that as the price of oranges increases, consumers will find relatively cheaper alternatives to consume instead of oranges. This means that consumers may replace some oranges with other fruits that are now relatively cheaper than oranges. Option A is incorrect because the substitution effect does not imply that consumers will consume fewer apples because more money is spent on oranges. Option B is incorrect because a higher price does not necessarily signal that oranges are better than apples. Option D is incorrect because the substitution effect does not necessarily mean that consumers will have less money to spend on all goods, only on oranges.

Question 14

​Exhibit 4-4 
-Refer to Exhibit 4-4. A change from Point A to Point D represents a(n):

Accepted Answer

An increase in demand is represented by a movement from Point A to Point D because the entire demand curve shifts to the right.

Question 15

Skippy loves peanut butter. Skippy reads on the internet that 75 percent of the peanut crop in the South has been wiped out by drought, and that this will cause the price of peanuts to more than double by the end of the year. As a result,

Accepted Answer

Skippy's love for peanut butter is not easily replaceable by other nut butters, and the news of the increased price may lead Skippy to stock up on peanut butter now rather than waiting. This would result in an increase in demand for peanut butter today.

Question 16

Rhonda views movie tickets and DVD rentals to be substitute forms of entertainment. An increase in the price of a DVD rental will probably result in an increase in the:

Accepted Answer

Since movie tickets and DVD rentals are substitute forms of entertainment, an increase in the price of a DVD rental is likely to make movie tickets relatively cheaper. This will lead consumers to switch to movie tickets, resulting in an increase in the demand for movie tickets. Therefore, the correct answer is D) demand for movie tickets.

Question 17

If Bill expects to earn a higher income next month, he may choose to

Accepted Answer

If Bill expects to earn a higher income in the next month, he may choose to save less now and spend more of his current income on goods and services. This is because he anticipates having more money in the future, so he can afford to spend more now without jeopardizing his ability to save in the future. Therefore, he would move up his demand curve for goods and services. Option A is also a possible choice, but it may not be applicable to all individuals and situations.

Question 18

Exhibit 4-3 -Refer to Exhibit 4-3. Everyone has been raving about the newest summer blockbuster film. Since your Aunt Finola just sent you a nice letter with $20 enclosed, you decide to see the movie even though ticket prices have risen to $10 per ticket. You are not alone, as many students are waiting in line at the theater, shifting the demand curve to D₁. The theater owners are now selling:

Accepted Answer

The shift in the demand curve indicates that more people are willing to purchase tickets at the higher price, resulting in an increase in quantity demanded. The intersection of the new demand curve and the original supply curve (SS1U1B0) indicates that the theater owners will now sell QS1U1B12S1U1B0 tickets at the higher price.

Question 19

Skateboards International of Mavericks Beach, California, was able to sell 20,000 skateboards at a price of $60 last year. This year it is able to sell only 12,000 of the same skateboards at a price of $60. Evidently, Skateboard International has experienced a(n):

Accepted Answer

The decrease in the quantity sold despite the price remaining the same suggests that there has been a decrease in demand for Skateboard International's skateboards.

Question 20

Exhibit 4-3 -Refer to Exhibit 4-3. The University Theater faces market demand curve D₀ and has begun charging $10, up from $5, for tickets for Friday and Saturday night shows. As a result, students have:

Accepted Answer

When the price of tickets increases, the quantity of tickets demanded decreases, reflecting a movement along the demand curve rather than a shift of the demand curve itself.

Quiz 4: Demand, Supply, and Market Equilibrium

Which of the following would not cause an increase in demand for tennis balls?

Exhibit 4-4 -Refer to Exhibit 4-4. A change from Point A to Point C represents a(n) :

Exhibit 4-4 -Refer to Exhibit 4-4. A change from Point A to Point B represents a(n) :

Today's demand curve for gasoline could shift in response to

If Eric expects to earn more income next month, he may choose to

CNN announces that bad weather in Central America has greatly reduced the number of cocoa bean plants, and, as a result, it is expected that the price of chocolate will rise in the near future. As a result:

Suppose Sprite and 7-Up are considered by consumers to be substitutes. The likely economic impact of a decrease in the price of 7-Up is a:

Which of the following would be most likely to cause an outward shift of the demand curve for electricity?

When the price of automobile insurance increases sharply, the likely impact on the market for automobiles is:

Today, people changed their expectations about the future. This change

The price of automobiles has increased sharply lately. As a result, automobile dealers have noticed that:

Exhibit 4-4 -Refer to Exhibit 4-4. A change from Point A to Point E represents a(n) :

According to the substitution effect, an increase in the price of oranges will:

Exhibit 4-4 -Refer to Exhibit 4-4. A change from Point A to Point D represents a(n) :

Skippy loves peanut butter. Skippy reads on the internet that 75 percent of the peanut crop in the South has been wiped out by drought, and that this will cause the price of peanuts to more than double by the end of the year. As a result,

Rhonda views movie tickets and DVD rentals to be substitute forms of entertainment. An increase in the price of a DVD rental will probably result in an increase in the:

If Bill expects to earn a higher income next month, he may choose to

Skateboards International of Mavericks Beach, California, was able to sell 20,000 skateboards at a price of $60 last year. This year it is able to sell only 12,000 of the same skateboards at a price of $60. Evidently, Skateboard International has experienced a(n) :

Exhibit 4-3 -Refer to Exhibit 4-3. The University Theater faces market demand curve D₀ and has begun charging $10, up from $5, for tickets for Friday and Saturday night shows. As a result, students have:

Quiz 4: Demand, Supply, and Market Equilibrium

Which of the following would not cause an increase in demand for tennis balls?

​Exhibit 4-4 -Refer to Exhibit 4-4. A change from Point A to Point C represents a(n) :

​Exhibit 4-4 -Refer to Exhibit 4-4. A change from Point A to Point B represents a(n) :

Today's demand curve for gasoline could shift in response to

If Eric expects to earn more income next month, he may choose to

CNN announces that bad weather in Central America has greatly reduced the number of cocoa bean plants, and, as a result, it is expected that the price of chocolate will rise in the near future. As a result:

Suppose Sprite and 7-Up are considered by consumers to be substitutes. The likely economic impact of a decrease in the price of 7-Up is a:

Which of the following would be most likely to cause an outward shift of the demand curve for electricity?

When the price of automobile insurance increases sharply, the likely impact on the market for automobiles is:

Today, people changed their expectations about the future. This change

The price of automobiles has increased sharply lately. As a result, automobile dealers have noticed that:

​Exhibit 4-4 -Refer to Exhibit 4-4. A change from Point A to Point E represents a(n) :

According to the substitution effect, an increase in the price of oranges will:

​Exhibit 4-4 -Refer to Exhibit 4-4. A change from Point A to Point D represents a(n) :

Skippy loves peanut butter. Skippy reads on the internet that 75 percent of the peanut crop in the South has been wiped out by drought, and that this will cause the price of peanuts to more than double by the end of the year. As a result,

Rhonda views movie tickets and DVD rentals to be substitute forms of entertainment. An increase in the price of a DVD rental will probably result in an increase in the:

If Bill expects to earn a higher income next month, he may choose to

Skateboards International of Mavericks Beach, California, was able to sell 20,000 skateboards at a price of $60 last year. This year it is able to sell only 12,000 of the same skateboards at a price of $60. Evidently, Skateboard International has experienced a(n) :

​Exhibit 4-3 -Refer to Exhibit 4-3. The University Theater faces market demand curve D0 and has begun charging $10, up from $5, for tickets for Friday and Saturday night shows. As a result, students have:

Exhibit 4-4 -Refer to Exhibit 4-4. A change from Point A to Point C represents a(n) :

Exhibit 4-4 -Refer to Exhibit 4-4. A change from Point A to Point B represents a(n) :

Exhibit 4-4 -Refer to Exhibit 4-4. A change from Point A to Point E represents a(n) :

Exhibit 4-4 -Refer to Exhibit 4-4. A change from Point A to Point D represents a(n) :

Exhibit 4-3 -Refer to Exhibit 4-3. The University Theater faces market demand curve D₀ and has begun charging $10, up from $5, for tickets for Friday and Saturday night shows. As a result, students have: