Question 1

If the price of train tickets decreases, what will be the impact in the market for bus travel?
A) The demand curve for bus travel shifts to the right.
B) The quantity of bus travel demanded increases.
C) The demand curve for bus travel shifts to the left.
D) The quantity of bus travel demanded decreases.

Accepted Answer

When the price of train tickets decreases, trains become a more attractive option compared to buses, leading to a decrease in the demand for bus travel. This is represented by a leftward shift in the demand curve for bus travel.

Question 2

How has the growing popularity of factory outlet stores affected the market for clothing at retail department stores?
A) the demand curve for clothing at retail department stores shifts to the right.
B) the demand curve for clothing at retail department stores shifts to the left.
C) the supply curve for clothing at retail department stores shifts to the right.
D) the supply curve for clothing at retail department stores shifts to the left.

Accepted Answer

The growing popularity of factory outlet stores provides consumers with discounted prices, which increases their willingness to buy from the outlets instead of retail department stores. As a result, the demand curve for clothing at retail department stores shifts to the left, decreasing the demand for clothing at retail department stores.

Question 3

Suppose that when the price of oranges decreases, Sarita decreases her purchases of peaches. To Sarita,
A) oranges and peaches are complements.
B) oranges and peaches are inferior goods.
C) oranges and peaches are normal goods.
D) oranges and peaches are substitutes.

Accepted Answer

When the price of oranges decreases, Sarita decreases her purchases of peaches, indicating that oranges and peaches are substitutes. When the price of one good decreases, the demand for the other good decreases as consumers substitute the less expensive good for the more expensive one.

Question 4

Technological advancements have led to lower prices and an increase in the sale of color laser printers. How does this affect the market for traditional inkjet printers?
A) The demand curve for inkjet printers shifts to the right.
B) The demand curve for inkjet printers shifts to the left.
C) The quantity of inkjet printers demanded increases.
D) The quantity of inkjet printers demanded decreases.

Accepted Answer

The answer of Technological advancements have led to lower prices...

Question 5

How does the decreasing use of DVD players affect the market for prerecorded DVDs?
A) The demand curve for prerecorded DVDs shifts to the right.
B) The quantity of prerecorded DVDs demanded decreases.
C) The quantity of prerecorded DVDs demanded increases.
D) The demand curve for prerecorded DVDs shifts to the left.

Accepted Answer

The decreasing use of DVD players implies a decrease in the number of consumers who demand prerecorded DVDs. Therefore, the demand curve for prerecorded DVDs shifts to the left, resulting in a decrease in the quantity of prerecorded DVDs demanded.

Question 6

Buyers scrambled to secure stocks of Australian wool following a forecast of an 11 percent decline in wool production. What happens in the Australian wool market as a result of this announcement?
A) The demand curve for Australian wool shifts to the left in anticipation of higher prices in the future.
B) The demand curve for Australian wool shifts to the right in anticipation of higher prices in the future.
C) The quantity of Australian wool demanded increases in anticipation of higher prices in the future.
D) The quantity of Australian wool demanded decreases in anticipation of lower quantities in the future.

Accepted Answer

The forecast of an 11 percent decline in wool production signals that there will be a decrease in the supply of Australian wool. This will lead to an increase in the price of wool. Buyers, anticipating higher prices in the future, will scramble to secure stocks of Australian wool. This increased demand will shift the demand curve to the right.

Question 7

How does the increasing use of digital cameras affect the market for traditional camera film?
A) The demand curve for traditional camera film shifts to the right.
B) The quantity of traditional camera film demanded decreases.
C) The quantity of traditional camera film demanded increases.
D) The demand curve for traditional camera film shifts to the left.

Accepted Answer

The increasing use of digital cameras reduces the need for traditional camera film, leading to a decrease in demand. This is represented by a leftward shift in the demand curve for traditional camera film.

Question 8

Technological advancements have led to lower prices and an increase in the sale of color laser printers. How does this affect the market for laser printer ink cartridges?
A) The demand curve for laser printer ink cartridges shifts to the right.
B) The demand curve for laser printer ink cartridges shifts to the left.
C) The quantity of laser printer ink cartridges demanded increases.
D) The quantity of laser printer ink cartridges demanded decreases.

Accepted Answer

The answer of Technological advancements have led to lower prices...

Question 9

If the price of gasoline increases, what will be the impact in the market for public transportation?
A) The demand curve for public transportation shifts to the right.
B) The quantity of public transportation demanded increases.
C) The demand curve for public transportation shifts to the left.
D) The quantity of public transportation demanded decreases.

Accepted Answer

The answer of If the price of gasoline increases, what...

Question 10

Suppose that when the price of pickles decreases, Teddy increases his purchase of ketchup. To Teddy,
A) pickles and ketchup are complements.
B) pickles and ketchup and substitutes.
C) pickles and ketchup are normal goods.
D) pickles are a normal good and ketchup is an inferior good.

Accepted Answer

When the price of one good (pickles) decreases, and the quantity demanded of another good (ketchup) increases, it indicates that the two goods are complements. Therefore, Teddy sees pickles and ketchup as complementary goods.

Question 11

If the price of propane-fueled gas grills was to decrease, then
A) the demand for propane would decrease.
B) the demand for propane would increase.
C) the quantity of propane demanded would increase.
D) the quantity of propane demanded would decrease.

Accepted Answer

If the price of propane-fueled gas grills decreases, then it may become a more attractive option for individuals to purchase, leading to an increase in the demand for propane to fuel these grills. However, this would only impact the demand for propane, not the quantity demanded, since the quantity demanded is related to the price of propane, not propane gas grills.

Question 12

Suppose that when the price of ice cream increases, Liza decreases her purchase of hot fudge. To Liza,
A) ice cream and hot fudge are complements.
B) ice cream and hot fudge and substitutes.
C) ice cream and hot fudge are normal goods.
D) ice cream is a normal good and hot fudge is an inferior good.

Accepted Answer

Liza's behavior suggests that ice cream and hot fudge are complements, as an increase in the price of ice cream leads to a decrease in the purchase of hot fudge. When goods are complements, an increase in the price of one good leads to a decrease in the demand for the other good.

Question 13

If an increase in income leads to a decrease in the demand for salami, then salami is
A) an inferior good.
B) a neutral good.
C) a necessity.
D) a normal good.

Accepted Answer

An inferior good is a good for which demand decreases as income increases. This means that as people's income increases, they switch to other, higher-quality foods and consume less of the inferior good. The fact that an increase in income leads to a decrease in the demand for salami suggests that salami is an inferior good.

Question 14

In September, buyers of silver expect that the price of silver will rise in October. What happens in the silver market in September, holding all else constant?
A) The quantity demanded decreases.
B) The demand curve shifts to the left.
C) The demand curve shifts to the right.
D) The quantity demanded increases.

Accepted Answer

When buyers expect the price of silver to rise in the future, their demand for silver increases in the present. This leads to a shift of the demand curve to the right, as more people want to purchase silver at every given price. As a result, the quantity demanded of silver will increase in September.

Question 15

According to a recent study, "Stricter college alcohol policies, such as raising the price of alcohol, or banning alcohol on campus, decrease the number of students who use marijuana." On the basis of this information, how would you describe alcohol and marijuana?
A) The two goods are substitutes in consumption.
B) There is no relationship between the two goods.
C) The two goods are complements in consumption.
D) They are both luxury goods.

Accepted Answer

The answer of According to a recent study, "Stricter college...

Question 16

Factory incentives on cell phones have encouraged consumers to upgrade their phones. How does this affect the market for bluetooth headsets?
A) The quantity of bluetooth headsets demanded increases.
B) The quantity of bluetooth headsets demanded decreases.
C) The demand for bluetooth headsets increases.
D) The demand for bluetooth headsets decreases.

Accepted Answer

Factory incentives on cell phones encourage more people to upgrade their phones, which means there will be more demand for bluetooth headsets as users upgrade their devices and seek out compatible accessories. As a result, the demand for bluetooth headsets increases.

Question 17

Several studies have shown promising links between green tea consumption and cancer prevention. How does this affect the market for green tea?
A) The quantity of green tea demanded increases because of a change in tastes in favor of green tea.
B) The green tea demand curve shifts to the right because of a change in tastes in favor of green tea.
C) The green tea demand curve shifts to the left because this new information will increase the price of green tea.
D) The quantity of green tea demanded decreases because this new information will increase the price of green tea.

Accepted Answer

The promising links between green tea consumption and cancer prevention create a change in tastes in favor of green tea, leading to a shift in the green tea demand curve to the right. This means that at any given price, consumers will demand a higher quantity of green tea.

Question 18

If the price of smartphones was to increase, then
A) the demand for smartphone apps would decrease.
B) the demand for smartphone apps would increase.
C) the quantity of smartphone apps demanded would increase.
D) the quantity of smartphone apps demanded would decrease.

Accepted Answer

The answer of If the price of smartphones was to...

Question 19

In January, buyers of gold expect that the price of gold will fall in February. What happens in the gold market in January, holding everything else constant?
A) The demand curve shifts to the right.
B) The quantity demanded increases.
C) The quantity demanded decreases.
D) The demand curve shifts to the left.

Accepted Answer

If buyers of gold expect that the price of gold will fall in February, they will likely delay their purchases in January, leading to a decrease in demand for gold. This will shift the demand curve to the left.

Question 20

Suppose that when the price of hamburgers increases, the Ruiz family increases their purchases of hot dogs. To the Ruiz family
A) hamburgers and hot dogs are complements.
B) hamburgers and hot dogs are inferior goods.
C) hamburgers and hot dogs are normal goods.
D) hamburgers and hot dogs are substitutes.

Accepted Answer

If the Ruiz family increases their purchases of hot dogs when the price of hamburgers increases, they are demonstrating a substitution effect, meaning that hamburgers and hot dogs are substitutes for the family. Therefore, choice D, hamburgers and hot dogs are substitutes, is the best answer.

Quiz 3: Where Prices Come From: the Interaction of Demand and Supply

If the price of train tickets decreases, what will be the impact in the market for bus travel?

How has the growing popularity of factory outlet stores affected the market for clothing at retail department stores?

Suppose that when the price of oranges decreases, Sarita decreases her purchases of peaches. To Sarita,

Technological advancements have led to lower prices and an increase in the sale of color laser printers. How does this affect the market for traditional inkjet printers?

How does the decreasing use of DVD players affect the market for prerecorded DVDs?

Buyers scrambled to secure stocks of Australian wool following a forecast of an 11 percent decline in wool production. What happens in the Australian wool market as a result of this announcement?

How does the increasing use of digital cameras affect the market for traditional camera film?

Technological advancements have led to lower prices and an increase in the sale of color laser printers. How does this affect the market for laser printer ink cartridges?

If the price of gasoline increases, what will be the impact in the market for public transportation?

Suppose that when the price of pickles decreases, Teddy increases his purchase of ketchup. To Teddy,

If the price of propane-fueled gas grills was to decrease, then

Suppose that when the price of ice cream increases, Liza decreases her purchase of hot fudge. To Liza,

If an increase in income leads to a decrease in the demand for salami, then salami is

In September, buyers of silver expect that the price of silver will rise in October. What happens in the silver market in September, holding all else constant?

According to a recent study, "Stricter college alcohol policies, such as raising the price of alcohol, or banning alcohol on campus, decrease the number of students who use marijuana." On the basis of this information, how would you describe alcohol and marijuana?

Factory incentives on cell phones have encouraged consumers to upgrade their phones. How does this affect the market for bluetooth headsets?

Several studies have shown promising links between green tea consumption and cancer prevention. How does this affect the market for green tea?

If the price of smartphones was to increase, then

In January, buyers of gold expect that the price of gold will fall in February. What happens in the gold market in January, holding everything else constant?

Suppose that when the price of hamburgers increases, the Ruiz family increases their purchases of hot dogs. To the Ruiz family