Deck 17: Demand, Supply, and Equilibrium

Question 1

Changes in demand are caused by each of the following except

A)changes in income.
B)changes in the prices of related goods and services.
C)changes in tastes and preferences.
D)changes in supply.

Answer 1

changes in supply.

Question 2

A drop in the price of oil will result in

A)an increase in the demand for oil.
B)a decrease in the demand for oil.
C)an increase in the quantity of oil demanded.
D)a decrease in the quantity of oil demanded.
E)both an increase in the demand and an increase in the quantity demanded.

Answer 2

an increase in the quantity of oil demanded.

Question 3

As income falls, the demand for normal goods ____ and the demand for inferior goods ___.

A)falls; falls
B)rises; rises
C)falls; rises
D)rises; falls

Answer 3

falls; rises

Question 4

Use the following figure to answer the question :
A move from G to H represents

A)an increase in quantity demanded.
B)a decrease in quantity demanded.
C)an increase in demand.
D)a decrease in demand.

Question 5

As the price of an item goes up, the quantity demanded

A)rises.
B)falls.
C)remains the same.

Question 6

If good J and good Z are complements and the price of good J increases, the demand curve for good Z will

A)shift to the left.
B)become horizontal.
C)not change.
D)shift to the right.

Question 7

When the demand for CDs rises, buyers will purchase more CDs at

A)all prices.
B)some prices.
C)no prices.

Question 8

When we go from one demand curve to another, there has definitely been

A)a change in quantity demanded.
B)a change in demand.
C)an increase in demand.
D)a decrease in demand.

Question 9

Use the following figure to answer the question :
A move from H to I represents

A)an increase in quantity demanded.
B)a decrease in quantity demanded.
C)an increase in demand.
D)a decrease in demand.

Question 10

The law of demand holds

A)for individuals, but not for markets.
B)for markets, but not for individuals.
C)for both individuals and for markets.
D)for neither individuals nor for markets.

Question 11

If good A and good B are substitutes and the price of good A decreases, the demand for good B will

A)not change.
B)decrease.
C)increase.
D)become nonexistent.

Question 12

Use the following figure to answer the question :
A move from F to G represents

A)an increase in quantity demanded.
B)a decrease in quantity demanded.
C)an increase in demand.
D)a decrease in demand.

Question 13

Use the following figure to answer the question :
A move from E to F represents

A)a change in quantity demanded.
B)a change in demand.
C)an increase in demand.
D)a decrease in demand.

Question 14

If Pepsi increases its prices which of the following would NOT happen?

A)The demand for Pepsi would drop.
B)The quantity demanded of Pepsi would drop.
C)The demand for Coke would increase.
D)The equilibrium price of Coke would rise.
E)The equilibrium quantity of Coke would rise.

Question 15

Use the following figure to answer the question :
A move from E to F represents

A)an increase in quantity demanded.
B)a decrease in quantity demanded.
C)an increase in demand.
D)a decrease in demand.

Question 16

As income rises, the demand for inferior goods

A)rises.
B)falls.
C)stays about the same.
D)cannot be determined.

Question 17

Use the following figure to answer the question :
A move from F to G represents

A)a change in quantity demanded.
B)a change in demand.
C)an increase in demand.
D)a decrease in demand.

Question 18

Use the following figure to answer the question :
A move from H to F represents

A)an increase in quantity demanded.
B)a decrease in quantity demanded.
C)an increase in demand.
D)a decrease in demand.

Question 19

An increase in demand is defined as an increase in the quantity that people are willing and able to purchase at

A)at least one price.
B)some prices.
C)all prices.

Question 20

Use the following figure to answer the question :
A move from G to H represents

A)a change in quantity demanded.
B)a change in demand.
C)an increase in demand.
D)a decrease in demand.

Question 21

Use the following figure to answer the question :
A move from F to G represents

A)an increase in quantity demanded.
B)a decrease in quantity demanded.
C)an increase in demand.
D)a decrease in demand.

Question 22

Which of the following is NOT a complement for automobiles?

A)Gasoline to run the car
B)Price of the car
C)The insurance for the car
D)The cost of the financing for the car
E)The cost of periodic maintenance

Question 23

An increase in the price of gasoline will cause a

A)decline in the quantity demanded for gasoline.
B)increase in the quantity demanded for gasoline.
C)decline in the demand for gasoline.
D)increase in the demand for gasoline.

Question 24

Chicken and pork are substitutes. Other things being equal, an increase in the price of chicken will

A)put downward pressure on the price of pork.
B)have no effect on the demand or pork.
C)increase the demand for pork.
D)decrease the demand for pork.

Question 25

A normal good is defined as a good for which demand increases

A)as the income of consumers increases.
B)as its own price decreases.
C)as the price of close substitutes decreases.
D)as the total number of consumers increases.
E)as a reflection of changing consumer tastes.

Question 26

Use the following figure to answer the question :
A move from G to H represents

A)an increase in quantity demanded.
B)a decrease in quantity demanded.
C)an increase in demand.
D)a decrease in demand.

Question 27

According to the law of demand, an increase in the price of Pepsi will

A)increase the quantity of Pepsi demanded.
B)decrease the quantity of Pepsi demanded.
C)increase the demand for Pepsi.
D)decrease the demand for Pepsi.

Question 28

An increase in the price of a complement will result in

A)a decrease in the quantity demanded for the product.
B)an increase in the quantity demanded for the product.
C)a decrease in the demand for the product.
D)an increase in the demand for the product.
E)a shift in demand for the complement.

Question 29

Assuming Pepsi and Coke are substitutes, a decrease in the price of Pepsi is likely to

A)decrease the demand for Coke.
B)increase the demand for Pepsi.
C)decrease the demand for Pepsi.
D)increase the demand for Coke.

Question 30

Computers and computer software are complements. A decrease in the price of computers is likely to

A)decrease the demand for computers.
B)decrease the demand for computer software.
C)increase the demand for computers.
D)increase the demand for computer software.

Question 31

Use the following figure to answer the question :
A move from E to F represents

A)an increase in quantity demanded.
B)a decrease in quantity demanded.
C)an increase in demand.
D)a decrease in demand.

Question 32

If beans are inferior goods, a decrease in income will

A)cause beans to sell at a lower price.
B)increase the production of beans.
C)shift the demand curve for beans to the left.
D)shift the demand curve for beans to the right.
E)rotate the supply curve in a clockwise manner.

Question 33

If the price of Diet Pepsi rises, what happens to the price of Diet Coke?

A)It will rise.
B)It will fall.
C)It will remain the same.
D)There is no way of telling what will happen to the price of Diet Coke.

Question 34

Graphically, an increase in demand is represented by

A)an upward movement (from right to left) along a given demand curve.
B)an outward shift of the demand curve.
C)an inward shift of the demand curve.
D)a downward movement (from left to right) along a given demand curve.

Question 35

Use the following figure to answer the question :
A move from F to G represents

A)a change in quantity demanded.
B)a change in demand.
C)an increase in demand.
D)a decrease in demand.

Question 36

All of the following could shift the demand curve, except?

A)A shift of the supply curve
B)A rise in income
C)A change in the price of substitutes
D)An increase in population in the age group buying that good
E)A successful advertising campaign convincing people that they want more of this good

Question 37

Assuming Coors and Budweiser are substitutes, an increase in the price of Coors is likely to cause

A)a decrease in the demand for Coors.
B)a decrease in the demand for Budweiser.
C)an increase in the demand for Budweiser.
D)an increase in the demand for Coors.

Question 38

Use the following figure to answer the question :
A move from H to I represents

A)an increase in quantity demanded.
B)a decrease in quantity demanded.
C)an increase in demand.
D)a decrease in demand.

Question 39

Use the following figure to answer the question :
A move from E to F represents

A)an increase in quantity demanded.
B)a decrease in quantity demanded.
C)an increase in demand.
D)a decrease in demand.

Question 40

An increase in demand means that people will buy more of a good at

A)least one price.
B)at some prices.
C)at most prices.
D)at all prices.

Question 41

As the price of cameras increases

A)the demand for cameras will increase.
B)the demand for film will increase.
C)the demand for film will decrease.
D)the supply of cameras will increase.

Question 42

Use the following figure to answer the question :
A move from D₂ to D₃ is a(n) ____.

A)an increase in quantity demanded
B)a decrease in quantity demanded
C)an increase in demand
D)a decrease in demand

Question 43

Which economist likened demand and supply to two blades of a pair of scissors?

A)Alfred Marshall
B)Adam Smith
C)Thomas Malthus
D)Karl Marx
E)Thomas Carlyle

Question 44

Changes in which one of the following will not shift the demand curve in the short run?

A)Expectations about future prices and income
B)Income
C)Tastes and preferences
D)Prices of related goods
E)The price of the good itself

Question 45

Use the following figure to answer the question :
A move from D₄ to D₃ is a(n) ____.

A)an increase in quantity demanded
B)a decrease in quantity demanded
C)an increase in demand
D)a decrease in demand

Question 46

If coffee is a substitute for tea, and the price of coffee rises, what will happen?

A)Demand for tea will decrease.
B)Demand for tea will increase.
C)The quantity demanded of coffee will rise.
D)The quantity demanded of tea will decrease.

Question 47

When Pope Paul VI issued a decree allowing American Catholic bishops to end year-round meatless Fridays, except during Lent, the effect in terms of supply and demand was to cause

A)an increase in demand for fish.
B)a decrease in demand for fish.
C)an increase in supply for fish.
D)a decrease in supply for fish.

Question 48

A person is attempting to sell their house, but there has been no interest in the house or offers to buy after several months. Which of the following actions are most appropriately based on the laws of supply and demand?

A)Lower the price until a buyer is attracted.
B)Raise the price to indicate improvements to the house.
C)Advertise more heavily.
D)Change real estate companies.

Question 49

Factors which quickly and directly affect market demand include all of the following except

A)prices of related goods.
B)the number of buyers.
C)income.
D)tastes and preferences.
E)the cost of resources.

Question 50

Use the following figure to answer the question :
A move from G to H represents

A)an increase in quantity demanded.
B)a decrease in quantity demanded.
C)an increase in demand.
D)a decrease in demand.

Question 51

An increase in the price of IBM personal computers is likely to

A)decrease the demand for IBM computers.
B)increase the demand for Apple computers (Macs).
C)increase the demand for IBM computers.
D)decrease the demand for Apple computers (Macs).

Question 52

If beans are an inferior good, a decrease in income will

A)cause rice to sell at a lower price.
B)increase the production of rice.
C)shift the demand curve for rice to the left.
D)shift the demand curve for rice to the right.

Question 53

If a person's income falls, then the demand for a normal good will

A)increase.
B)decrease.
C)remain the same.
D)fall to zero.

Question 54

Use the following figure to answer the question :
A shift in the demand curve for gasoline would occur if

A)the price of gasoline changed.
B)more oil was discovered.
C)there was a shift in the supply curve for gasoline.
D)people decided to travel more by car.

Question 55

When demand decreases, the demand curve shifts

A)on its axis, becoming flatter.
B)upward and to the right.
C)downward and to the left.
D)on its axis, becoming more vertical.

Question 56

Use the following figure to answer the question :
All of the following could shift the demand curve except,

A)a change in the price of substitutes
B)a shift of the supply curve
C)a rise in income
D)a rise in population that buys the good

Question 57

If income changes, one would expect

A)the demand for the product to change.
B)the supply of the product to change.
C)both the demand for and the supply of the product to change.
D)to move from one point to another along the demand curve.

Question 58

Use the following figure to answer the question :
A move from D₃ to D₁ is a(n) ____.

A)increase in quantity demanded
B)decrease in quantity demanded
C)increase in demand
D)decrease in demand

Question 59

Use the following figure to answer the question :
The market demand curve for most goods and services is

A)the horizontal summation of individual demand curves.
B)calculated by multiplying all individual demand curves by each other.
C)not important for most analytical purposes.
D)not related in any way to individual demand curves.

Question 60

Use the following figure to answer the question :
A move from D₁ to D₂ is a(n): ____.

A)an increase in quantity demanded
B)a decrease in quantity demanded
C)an increase in demand
D)a decrease in demand

Question 61

Use the following figure to answer the question :
A move from I to J best represents a

A)change in quantity demanded
B)change in demand
C)increase in demand
D)decrease in demand

Question 62

As income rises the quantity purchased of normal goods ____ and the quantity purchased of inferior goods ____.

A)rises; rises
B)falls; falls
C)rises; falls
D)falls; rises

Question 63

A leftward shift of the entire demand curve could be caused by

A)a decrease in the number of buyers.
B)a change in taste away from the good.
C)an increase in income if the good is inferior.
D)an increase in the price of a complement.
E)All of the choices cause a leftward shift of the entire demand curve.

Question 64

Which of the following pairs provides examples of complementary goods?

A)Cars and trucks
B)Coffee and tea
C)Butter and margarine
D)Cars and tires
E)Pens and pencils

Question 65

When demand and supply both increase, equilibrium price will _________ and equilibrium quantity will ________.

A)increase; increase
B)decrease; increase
C)remain the same; increase
D)All of these are correct.

Question 66

The quantity demanded of Pepsi has decreased. The best explanation for this is that

A)the price of Pepsi has increased.
B)the price of Coca-Cola has increased.
C)Pepsi consumers had an increase in income.
D)Pepsi's advertising is not as effective as in the past.

Question 67

If sneakers and hiking boots are substitutes and the price of sneakers falls, what will happen?

A)Demand for sneakers will rise.
B)Demand for sneakers will fall.
C)Demand for hiking boots will rise.
D)Demand for hiking boots will fall.

Question 68

An increase in the price of water ski boats is likely to

A)decrease the demand for water skis.
B)increase the demand for water skis.
C)decrease the demand for water ski boats.
D)increase the demand for water ski boats.

Question 69

The market demand curve is derived

A)so that it slopes downward and to the left as quantity rises.
B)by totaling the average demands for products in all markets.
C)by horizontally summing potential buyers' individual demand curves.
D)by vertically summing the demand curves of individuals in the market.

Question 70

A decrease in the price of memberships to Gold's Gym fitness centers is likely to:

A)decrease the demand for workout clothing.
B)increase the demand for workout clothing.
C)decrease the demand for Gold's Gym memberships.
D)increase the demand for Gold's Gym memberships.

Question 71

The market demand for most goods will

A)increase if the prices of substitutes fall.
B)decrease if the price of complementary goods fall.
C)increase if consumers expect prices to be higher in the future.
D)decrease if consumers expect the goods to become less available.

Question 72

A decrease in the demand for a service means that the

A)demand curve shifts to the right.
B)demand curve shifts to the left.
C)supply curve shifts to the right.
D)supply curve shifts to the left.

Question 73

When demand and supply both decrease, equilibrium price will _________ and equilibrium quantity will ________.

A)increase; decrease
B)decrease; decrease
C)remain the same; decrease
D)All of these are correct.

Question 74

Each of the following is an inferior good except

A)rice.
B)potatoes.
C)beans.
D)Filet Mignon steak.

Question 75

Assume that the demand curve for romance novels is downward sloping. If the price of a book increases from $4.95 to $5.95,

A)the demand for romance novels will increase.
B)the demand for romance novels will decrease.
C)the quantity demanded of romance novels will decrease.
D)the quantity demanded of romance novels will increase.
E)the quantity demanded of romance novels will stay the same.

Question 76

The demand for a normal good is

A)indirectly (negatively) related to the supply of the good.
B)directly (positively) related to income.
C)unaffected by changes in consumer tastes and preferences.
D)unaffected by changes in the prices of complementary goods.

Question 77

An inferior good is

A)generally of low quality.
B)purchased in the underground economy.
C)is damaged or referred to as a "second".
D)purchased in declining quantities as income rises.

Question 78

If memberships in health clubs and hospital fitness centers are substitutes and the price of health club memberships rises, what will happen?

A)Demand for health club memberships will fall.
B)Demand for health club memberships will rise.
C)Demand for hospital fitness center memberships will rise.
D)Demand for hospital fitness center memberships will fall.

Question 79

For inferior goods, an increase in income will cause the,

A)demand to fall.
B)quantity demanded to fall.
C)demand to increase.
D)quantity demand to increase.

Question 80

Substitute goods are

A)replacements for one another.
B)inferior goods.
C)consumed together.
D)usually free goods.