Question 1

You love peanut butter. You hear on the news that 50 percent of the peanut crop in the South has been wiped out by drought and that this will cause the price of peanuts to double by the end of the year. As a result, your demand for peanut butter

Accepted Answer

The news about the peanut crop will cause the price of peanut butter to increase in the future. However, the news may also create some uncertainty that may encourage consumers to purchase peanut butter now, before prices increase. Therefore, the demand for peanut butter may increase today, which corresponds to an increase in the quantity demanded.

Question 2

What will happen in the market for shotgun-shell ammunition now if buyers expect higher shotgun-shell prices in the near future?

Accepted Answer

If buyers expect higher prices in the future, they will try to buy more ammunition now before the prices go up. This will increase the demand for shotgun-shell ammunition.

Question 3

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

Accepted Answer

A change in expectations about the future can affect consumer behavior and shift the demand curve today. For example, if people expect a recession in the future, they may reduce their current spending, which would decrease today's demand. On the other hand, if people expect a new innovation or trend in the future, they may increase their current spending to prepare for it, which would increase today's demand. Therefore, a change in expectations can affect today's demand.

Question 4

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

Accepted Answer

The demand curve for gasoline might shift in response to changes in factors such as income, population, and the availability of substitutes, as well as changes in the expected future price of gasoline. However, today's price of gasoline and the number of sellers would only affect movement along the demand curve, and not necessarily the position of the curve itself.

Question 5

You watch a lot of HGTV during your summer vacation, and you notice that most housing buyers list granite countertops in their "must have" lists when buying a new or existing house. You expect the demand for

Accepted Answer

The demand for granite countertops will shift to the right because buyers are willing to pay more for houses with granite countertops, increasing their demand. This will lead to an increase in the equilibrium price and quantity of granite countertops. The demand for substitute products such as marble countertops may also increase, but it is not clear whether this will lead to a shift in their demand curve.

Question 6

Figure 4-5 
-Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand C to Demand A in the market for DVDs?

Accepted Answer

A change in consumer preferences toward watching movies in movie theaters rather than at home would reduce the demand for DVDs and shift the demand curve from Demand C to Demand A. Choices A and D would not cause the demand curve to shift in this way, as an increase in the price of DVDs would reduce quantity demanded and shift along the demand curve, and expectations of higher income would lead to an increase in demand but not a shift of the entire curve. A decrease in the price of DVD players (choice B) would increase the demand for DVDs, but it would not shift the demand curve itself.

Question 7

What will happen in the gasoline market now if buyers expect higher gasoline prices in the near future?

Accepted Answer

If buyers expect higher gasoline prices in the near future, they may increase their purchases now in order to avoid paying even higher prices later. This will lead to an increase in demand for gasoline.

Question 8

The University of Iowa was voted the #1 "party school" in 2013. The University of Iowa is located in Iowa City. At the end of August each year, the market demand for beer in Iowa City

Accepted Answer

The University of Iowa being voted the #1 "party school" suggests that there is a high demand for alcohol among the students. Therefore, it is likely that the market demand for beer in Iowa City would increase at the end of August when students start returning for the new academic year and parties/events become more frequent.

Question 9

If a study by medical researchers finds that eating brown rice causes weight loss while eating white rice causes weight gain, then we likely would see

Accepted Answer

If brown rice is found to cause weight loss while white rice causes weight gain, consumers who are interested in losing weight are likely to switch to brown rice, thus increasing demand for it. In contrast, the demand for white rice is likely to decrease as it is associated with weight gain. Therefore, we would see an increase in demand for brown rice and a decrease in demand for white rice.

Question 10

Which of the following events could shift the demand curve for gasoline to the left?

Accepted Answer

Public service announcements encouraging people to walk or ride bicycles instead of driving cars would decrease the demand for gasoline, as fewer people would be interested in purchasing gasoline for their vehicles.

Question 11

Which of the following does not affect an individual's demand curve?

Accepted Answer

The number of buyers does not affect an individual's demand curve. The demand curve represents the relationship between the quantity demanded and the price of a good or service by an individual consumer. The number of buyers in the market may affect the overall demand for the good or service, but it does not affect the demand curve of an individual consumer.

Question 12

Warrensburg is a small college town in Missouri. At the end of August each year, the market demand for fast food in Warrensburg

Accepted Answer

Since Warrensburg is a college town, it is reasonable to assume that at the end of August, when students return to campus, the demand for fast food will increase due to an influx of people needing quick and convenient meals.

Question 13

An increase in the number of college scholarships issued by private foundations would

Accepted Answer

The increase in the number of college scholarships issued by private foundations would increase the demand for education by making it more accessible and affordable for students who may not have been able to afford it otherwise. This would lead to an increase in the number of students seeking higher education.

Question 14

Ford Motor Company announces that next month it will offer $3,000 rebates on new Mustangs. As a result of this information, today's demand curve for Mustangs

Accepted Answer

The announcement of a rebate on Mustangs will lower the price of the car, which will increase the quantity demanded. This will cause a shift in the demand curve to the right. However, since the question asks about the effect on today's demand curve, the correct answer is B, as the demand curve today will shift to the left as consumers delay their purchases in anticipation of lower prices next month.

Question 15

If the number of buyers in a market decreases, then

Accepted Answer

When the number of buyers in a market decreases, there will be less demand for goods and services in the market, leading to a decrease in demand.

Question 16

Figure 4-5 
-Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand B to Demand C in the market for mattresses?

Accepted Answer

The answer of Figure 4-5 
-Refer to Figure 4-5. Which...

Question 17

A very hot summer in Atlanta will cause

Accepted Answer

The answer of A very hot summer in Atlanta will...

Question 18

Elena loves orange juice. She reads in the newspaper that 20 percent of the Florida orange crop was destroyed by a late spring frost. Economists predict that the price of oranges will rise by 50 percent by the end of the year. As a result, Elena's demand for orange juice

Accepted Answer

The answer of Elena loves orange juice. She reads in...

Question 19

Suppose scientists provide evidence that people who drink energy drinks are more likely to have a heart attack than people who do not drink energy drinks. We would expect to see

Accepted Answer

Consumers are likely to be concerned about their health and may choose to avoid consuming energy drinks, leading to a decrease in demand for them.

Question 20

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

Accepted Answer

The answer of If Miguel expects to earn a higher...

Quiz 4: The Market Forces of Supply and Demand