Question 1

When estimating demand,price is not the only factor to be considered.Three other elements emphasized by economists are consumer tastes,price and availability of similar products,and

Accepted Answer

Consumer income is a crucial factor to consider when estimating demand. The purchasing power of the consumers dictates how much they are willing to spend on a product, affecting the overall market demand.

Question 2

There are a lot of skateboards on the market,but the BMW Streetcarver is the only one with stabilizers and wheel design based on BMW's automobiles.This technology gives the BMW Streetcarver better control at high speeds and around sharp turns than any other brand.The skateboard is priced at $495,which leaves many consumers (especially young males)who might want to buy the Streetcarver unable to afford it.This inability to pay for the high-priced BMW-made skateboard shows the affect of __________ on sales.

Accepted Answer

Demand factors refer to the factors that affect consumer behavior and their willingness to pay for a product, such as price, income, and consumer preferences. In this case, the high price of the BMW Streetcarver is affecting the demand for the product, as many young males who might want to buy it cannot afford it.

Question 3

Which of the following statements about the factors that influence demand is true?

Accepted Answer

As real consumer income increases, consumers have more money to spend and may be more likely to purchase the product. As for the other choices, A is incorrect as the availability of close substitutes may make consumers more likely to switch to another product instead. C is incorrect as an increase in the price of close substitutes may make consumers more likely to purchase the original product instead. D is incorrect as changing consumer tastes can greatly impact demand for a product. E is incorrect as a decrease in consumer income may lead to less money being available to purchase goods, decreasing demand.

Question 4

Renfro's,Inc. ,is a company that sells 25 different relishes in 45 different states.Mrs.Renfro's chipotle corn salsa is so popular that the company cannot make enough to keep its resellers stocked.Its price of $4.50 for a jar seems just right to consumers who savor its hot and spicy taste.The popularity of hot and spicy food is an example of a __________ that Mrs.Renfro's has taken advantage of to make its product a success.

Accepted Answer

The popularity of hot and spicy food is a demand factor that Mrs.Renfro's has taken advantage of to make its product a success.

Question 5

Demand factors refer to

Accepted Answer

Demand factors refer to the consumers' willingness and ability to pay for products and services. It is not just about how many consumers want to purchase a product or how many can afford to buy it, but also how much they are willing to pay for it. Therefore, the correct answer is C.

Question 6

Campbell Soup spent seven years and $55 million on a super secret project to produce a line of Intelligent Quisine (IQ)food products "scientifically proven to lower high levels of cholesterol,blood sugar,and blood pressure." They were responding to the needs and desires expressed by consumers.However,after 15 months in an Ohio test market,Campbell Soup yanked the entire IQ line because

Accepted Answer

The product was priced too high and there was too little product variety, leading to its failure in the test market.

Question 7

Figure 13-5A above shows that when the quantity demanded for Red Baron frozen cheese pizzas moves from 2 to 3 million units along the demand curve D₁,the profit

Accepted Answer

The figure only shows the demand curve and quantity changes, not profit information.

Question 8

Factors that determine consumers' willingness and ability to pay for products and services are referred to as

Accepted Answer

Demand factors are the factors that determine consumers' willingness and ability to pay for products and services. These factors include consumer preferences, income levels, availability of substitutes, and overall market conditions. Supply factors refer to the production and availability of goods and services, affordability factors relate specifically to a consumer's financial situation, elasticity factors refer to how responsive demand is to changes in price, and macro environmental factors refer to larger societal and economic trends that affect demand and consumer behavior.

Question 9

A shift of the demand curve from D₂ to D₃in Figure 13-5B above indicates

Accepted Answer

The shift of the demand curve from D₂ to D₃ in Figure 13-5B indicates that more units are demanded at the given price. This is because the demand curve has shifted to the right, indicating an increase in demand at every price level.

Question 10

All of the following are demand factors EXCEPT:

Accepted Answer

The availability of similar products is a supply factor, not a demand factor. The other options listed are all demand factors that can affect the quantity of a product that consumers are willing to purchase.

Question 11

Which of the following statements most likely would account for the shift in the demand curve from D₂ to D₃shown in Figure 13-5B above?

Accepted Answer

The answer of Which of the following statements most likely...

Question 12

Figure 13-5A above shows that when the price for Red Baron frozen cheese pizzas moves from $8 to $6 per unit along the demand curve D₁,the quantity demanded

Accepted Answer

When the price decreases from $8 to $6, the quantity demanded increases from 2 to 3 million units per year, as per the demand curve D1.

Question 13

SHAPE magazine is targeted at young women seeking healthier lifestyles.At a price of $3.00 per copy,1.25 million copies are sold.If the price per issue is increased to $3.25,only 1 million copies would be sold.Fixed costs are $1 million and unit variable costs are $0.50 per magazine.From the information provided here,what is SHAPE magazine's total revenue obtained at the lower $3.00 price?

Accepted Answer

Total revenue at the lower $3.00 price can be calculated using the following formula:

Total revenue = Price per magazine x Number of magazines sold

Total revenue = $3.00 x 1.25 million
Total revenue = $3,750,000

Therefore, the best choice is A.

Question 14

Total revenue refers to

Accepted Answer

Total revenue refers to the total money received from the sale of a product, regardless of any expenses or costs associated with producing or selling the product. It is calculated by multiplying the unit price of the product by the total number of units sold.

Question 15

Which of the following illustrates a shift in the demand curve?

Accepted Answer

A shift in the demand curve occurs when there is a change in demand at every price point, rather than a change in quantity demanded due to a change in price (a movement along the demand curve). Option C states that there is an increase or decrease in demand when prices stay the same, indicating a shift in the demand curve. Options A, B, and D describe movements along the demand curve due to changes in price, and option E mentions a price change that does not impact demand.

Question 16

Figure 13-5B above shows that when the quantity demanded for Red Baron frozen cheese pizzas moves from 2 to 3 million units from the demand curve D₁to the demand curve D₂,the profit

Accepted Answer

The figure only shows the change in quantity demanded and does not provide information about profit changes.

Question 17

The total money received from the sale of a product is referred to as __________.

Accepted Answer

Total revenue refers to the total amount of money received from the sale of a product, without taking into account any costs or expenses. Profit is the amount of money earned after deducting all costs from the total revenue. Average revenue is the revenue earned per unit of output, and marginal revenue is the change in revenue resulting from the sale of an additional unit of output. Derived demand refers to the demand for a good or service that arises from the demand for another good or service.

Question 18

While consumer tastes and price and availability of similar products determine what consumers want to buy,consumer income determines

Accepted Answer

Consumer income determines what they can afford to buy. If they have a higher income, they may be able to purchase more expensive products or brands. If they have a lower income, they may be limited in their purchasing power and have to opt for cheaper alternatives. This is why understanding consumer income and demographics is important for businesses to target their products effectively.

Question 19

Which of the following illustrates movement along the demand curve?

Accepted Answer

Movement along the demand curve occurs when there is a change in the quantity demanded due to a change in the price of the good, with all other factors remaining constant.

Question 20

In Figure 13-5B above,the demand curve shifts from D₂ to D₃.This most likely represents

Accepted Answer

The shift in the demand curve without a change in price suggests that one or more demand factors have changed, leading to an increase in demand. This could be due to factors such as changes in consumer tastes, increase in population, or increase in consumer income. Therefore, option A is the most likely answer.

Quiz 13: Building the Price Foundation