Question 1

In which statement is the term ʺdemandʺ used correctly? 1) An increase in the price of copper will lead to an increase in the demand for aluminum a substitute for copper). 2) An increase in the price of aluminum will lead to a decrease in quantity demanded of aluminum.

Accepted Answer

The answer of In which statement is the term ʺdemandʺ...

Question 2

ʺDemandʺ in a particular market refers to

Accepted Answer

"Demand" in a particular market refers to the entire relationship between quantity demanded and price, which includes the quantity that households are willing and able to buy at different prices. It is not limited to the quantity purchased at the current market price, the quantity desired but not satisfied by current supply or the relationship between demand and supply. Therefore, D is the best choice.

Question 3

Consider cars and gasoline. Other things being equal, when the price of cars decreases, the demand for gasoline is likely to

Accepted Answer

When the price of cars decreases, consumers are more likely to purchase cars, which would increase the demand for gasoline since cars require gasoline to operate. Cars and gasoline are complements because they are typically used together, so a change in the price of one good can affect the demand for the other. Therefore, the demand for gasoline is likely to increase when the price of cars decreases.

Question 4

If tastes change so that a particular style of boots is now considered more appealing, the likely result is

Accepted Answer

If tastes change and a particular style of boots is now considered more appealing, more consumers will want to buy them, causing a shift in the demand curve to the right. This means that at any given price, the quantity demanded will increase.

Question 5

When deriving the market demand curve for a commodity, the only variables) that can change is are) the

Accepted Answer

The market demand curve for a commodity is derived by considering the quantity of the commodity demanded at different prices, holding all other factors constant. Therefore, the only factors that can change in this analysis are the price of the commodity itself (which is being varied) and the quantity of the commodity demanded (which is being observed and plotted). However, in real-world situations, changes in consumer income and the prices of related commodities can also impact the market demand for a commodity, but these are not considered when deriving the demand curve as they are held constant. Thus, the correct answer is E, as both the quantity demanded and prices of the commodity must factor into the market demand curve.

Question 6

In which statement is the term ʺdemandʺ used correctly? 1) An increase in the price of eggs will lead to a decrease in the demand for eggs. 2) An increase in the price of eggs will lead to a decrease in the demand for bacon.

Accepted Answer

The answer of In which statement is the term ʺdemandʺ...

Question 7

Which of the following would cause a movement along the demand curve for ski-lift tickets, other things being equal?

Accepted Answer

An increase in the price of ski-lift tickets would cause a movement along the demand curve, as consumers would purchase fewer lift tickets at the higher price. The other options would likely shift the entire demand curve, rather than causing a movement along it.

Question 8

If the price of tea falls and as a consequence the demand for sugar rises, then tea and sugar are

Accepted Answer

Tea and sugar are complementary goods because the demand for one increases when the price of the other decreases, indicating that they are used together.

Question 9

In which statement is the term ʺdemandʺ used correctly? 1) A decrease in the price of airline tickets led to an increase in quantity demanded for airline tickets. 2) A decrease in the price of airline tickets led to an increase in the demand for airline tickets.

Accepted Answer

The term "demand" refers to the overall desire or willingness of consumers to purchase a good or service at various prices, while "quantity demanded" refers to the specific amount of a good or service consumers are willing to buy at a particular price. Statement (1) correctly uses "quantity demanded" to describe the change in the amount purchased as a result of a change in price, which is consistent with the law of demand. Statement (2) incorrectly suggests that the demand curve itself shifts due to a change in the price of the good, which is a misunderstanding. Demand changes in response to factors other than the good's own price, such as income or preferences.

Question 10

Cars and gasoline are likely to be

Accepted Answer

Cars and gasoline are complementary goods because they are often used together as one cannot function without the other. If the price of gasoline were to rise significantly, the demand for cars may decrease as the cost of owning and operating a car becomes too high. Similarly, if the demand for cars were to increase, the demand for gasoline would also increase as more people are driving.

Question 11

If goods X and Y are complements and the price of X falls, all other things being equal, the demand curve for Y will

Accepted Answer

If the price of X falls, it becomes less expensive to buy X relative to Y, making Y more attractive. As a result, the demand for Y will increase, and the demand curve will shift to the right.

Question 12

If goods X and Y are substitutes and the price of X falls, all other things being equal, the demand curve for Y will

Accepted Answer

If the price of substitute good X falls, consumers will be more likely to choose X over Y, thus decreasing the demand for Y. This will result in a leftward shift of the demand curve for Y.

Question 13

Consider butter and margarine, which are substitutes. When the price of butter falls, the demand curve for margarine is likely to

Accepted Answer

When the price of butter falls, people are likely to buy more butter instead of margarine, since they are substitutes. This leads to a decrease in the demand for margarine, causing its demand curve to shift to the left.

Question 14

A change in which of the following variables will result in NO change in the demand for a given commodity?

Accepted Answer

A change in the price of the commodity itself will result in a change in quantity demanded, but not a change in demand. Changes in other variables such as income, population, and preferences will shift the entire demand curve.

Question 15

A variable that is assumed to be constant along an individualʹs demand curve for good X is the

Accepted Answer

The answer of A variable that is assumed to be...

Question 16

Which of the following pairs of goods are likely to be complements for a large group of consumers?

Accepted Answer

E-readers and e-books are complements because the use of one (e-readers) increases the use of the other (e-books).

Question 17

Goods X and Y are defined to be substitutes in consumption if

Accepted Answer

Substitutes are goods that can be used in place of each other. As the price of good X increases, consumers will switch to purchasing good Y instead, leading to a direct relationship between the price of X and the demand for Y. Therefore, D is the correct choice. The other options do not accurately describe the relationship between substitutes.

Question 18

Ceteris paribus, the position of the demand curve for apples will remain unchanged if there is a change in the

Accepted Answer

A change in the price of apples results in a movement along the demand curve, not a shift in the position of the demand curve. Changes in factors such as income, prices of related goods (like pears), and consumer preferences (such as knowledge about health benefits) would shift the demand curve.

Question 19

Which of the following pairs of goods are likely to be substitutes for a large group of consumers?

Accepted Answer

Substitutes are goods that can be used in place of each other. Green beans and peas serve similar nutritional purposes and can be easily substituted for one another in meals, making them likely substitutes for a large group of consumers.

Question 20

In which statement is the term ʺdemandʺ used correctly? 1) An increase in the price of copper will lead to a decrease in the demand for copper. 2) An increase in the price of copper will lead to an increase in the demand for aluminum a substitute for copper).

Accepted Answer

The answer of In which statement is the term ʺdemandʺ...

Quiz 3: Demand, Supply, and Price

In which statement is the term ʺdemandʺ used correctly? 1) An increase in the price of copper will lead to an increase in the demand for aluminum a substitute for copper) . 2) An increase in the price of aluminum will lead to a decrease in quantity demanded of aluminum.

ʺDemandʺ in a particular market refers to

Consider cars and gasoline. Other things being equal, when the price of cars decreases, the demand for gasoline is likely to

If tastes change so that a particular style of boots is now considered more appealing, the likely result is

When deriving the market demand curve for a commodity, the only variables) that can change is are) the

In which statement is the term ʺdemandʺ used correctly? 1) An increase in the price of eggs will lead to a decrease in the demand for eggs. 2) An increase in the price of eggs will lead to a decrease in the demand for bacon.

Which of the following would cause a movement along the demand curve for ski-lift tickets, other things being equal?

If the price of tea falls and as a consequence the demand for sugar rises, then tea and sugar are

In which statement is the term ʺdemandʺ used correctly? 1) A decrease in the price of airline tickets led to an increase in quantity demanded for airline tickets. 2) A decrease in the price of airline tickets led to an increase in the demand for airline tickets.

Cars and gasoline are likely to be

If goods X and Y are complements and the price of X falls, all other things being equal, the demand curve for Y will

If goods X and Y are substitutes and the price of X falls, all other things being equal, the demand curve for Y will

Consider butter and margarine, which are substitutes. When the price of butter falls, the demand curve for margarine is likely to

A change in which of the following variables will result in NO change in the demand for a given commodity?

A variable that is assumed to be constant along an individualʹs demand curve for good X is the

Which of the following pairs of goods are likely to be complements for a large group of consumers?

Goods X and Y are defined to be substitutes in consumption if

Ceteris paribus, the position of the demand curve for apples will remain unchanged if there is a change in the

Which of the following pairs of goods are likely to be substitutes for a large group of consumers?

In which statement is the term ʺdemandʺ used correctly? 1) An increase in the price of copper will lead to a decrease in the demand for copper. 2) An increase in the price of copper will lead to an increase in the demand for aluminum a substitute for copper) .