Question 1

If something happens to alter the quantity demanded at any given price, then the demand curve shifts.

Accepted Answer

When the quantity demanded changes at any given price due to factors other than the price itself (like changes in income, tastes, or prices of other goods), it results in a shift of the demand curve.

Question 2

The demand curve is the upward-sloping line relating price and quantity demanded.

Accepted Answer

The demand curve is typically downward-sloping, indicating that as the price decreases, the quantity demanded usually increases.

Question 3

A decrease in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

Accepted Answer

A decrease in the price of a product results in a movement along the demand curve, while an increase in the number of buyers shifts the demand curve to the right.

Question 4

If orange juice and apple juice are substitutes, an increase in the price of orange juice will shift the demand curve for apple juice to the left.

Accepted Answer

If orange juice and apple juice are substitutes, an increase in the price of orange juice would likely cause consumers to buy more apple juice instead, shifting the demand curve for apple juice to the right, not the left.

Question 5

An increase in the price of a substitute good will shift the demand curve for a good to the right.

Accepted Answer

When the price of a substitute good increases, consumers are likely to switch their demand to the related good, thus increasing its demand and causing the demand curve for that good to shift to the right.

Question 6

If a determinant of demand other than price changes, the demand curve shifts.

Accepted Answer

When a determinant of demand other than price changes (such as consumer income, tastes, prices of related goods, expectations, or number of buyers), it causes the entire demand curve to shift either to the right (increase in demand) or to the left (decrease in demand).

Question 7

An increase in demand shifts the demand curve to the left.

Accepted Answer

An increase in demand shifts the demand curve to the right, indicating a higher quantity demanded at each price level.

Question 8

If the demand for a good falls when income falls, then the good is called an inferior good.

Accepted Answer

When the demand for a good falls as income falls, the good is considered a normal good, not an inferior good. Inferior goods see an increase in demand when income falls.

Question 9

If orange juice and apple juice are substitutes, an increase in the price of orange juice will shift the demand curve for apple juice to the right.

Accepted Answer

When two goods are substitutes, an increase in the price of one leads to an increase in demand for the other, as consumers switch to the relatively cheaper alternative.

Question 10

A decrease in demand shifts the demand curve to the left.

Accepted Answer

A decrease in demand means that consumers want to buy less of the good at all possible prices, which is represented graphically by a leftward shift of the demand curve.

Question 11

The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant.

Accepted Answer

The market demand curve shows how the total quantity demanded of a good varies with its price, holding all other factors constant, not how it varies with the income of buyers.

Question 12

When Mario's income decreases, he buys more pasta. For Mario, pasta is a normal good.

Accepted Answer

When Mario's income decreases and he buys more pasta, pasta is considered an inferior good, not a normal good, because consumption increases as income decreases.

Question 13

When an increase in the price of one good lowers the demand for another good, the two goods are called complements.

Accepted Answer

When the price of one good increases and causes the demand for another good to decrease, those goods are considered complements because they are often used together, indicating a direct relationship between their demands.

Question 14

A decrease in income will shift the demand curve for an inferior good to the right.

Accepted Answer

For an inferior good, as income decreases, consumers tend to buy more of the inferior good because it is a cheaper alternative to more expensive goods, leading to an increase in demand and a rightward shift of the demand curve.

Question 15

A decrease in the price of a complement will shift the demand curve for a good to the left.

Accepted Answer

A decrease in the price of a complement will typically increase the demand for a good, shifting its demand curve to the right, as the two goods are often used together, making them more attractive when the complement is cheaper.

Question 16

Public service announcements, mandatory health warnings on cigarette packages, and the prohibition of cigarette advertising on television are all policies aimed at shifting the demand curve for cigarettes to the right.

Accepted Answer

These policies are aimed at reducing the demand for cigarettes by making them less appealing or harder to advertise, thus shifting the demand curve to the left, not the right.

Question 17

A movement upward and to the left along a given demand curve is called a decrease in demand.

Accepted Answer

A movement upward and to the left along a given demand curve represents a decrease in quantity demanded, not a decrease in demand. A decrease in demand would be shown by a shift of the entire demand curve to the left.

Question 18

An increase in the price of pizza will shift the demand curve for pizza to the left.

Accepted Answer

An increase in the price of pizza does not shift the demand curve; instead, it moves along the demand curve, typically leading to a decrease in the quantity demanded. A shift in the demand curve would be caused by factors other than the price of the good itself, such as changes in consumer income, preferences, or prices of related goods.

Question 19

Individual demand curves are summed vertically to obtain the market demand curve.

Accepted Answer

Individual demand curves are summed horizontally to obtain the market demand curve, as this process involves adding the quantities demanded by all individuals at each price level.

Question 20

Baseballs and baseball bats are substitute goods.

Accepted Answer

Baseballs and baseball bats are complementary goods because they are used together; the demand for one increases when the demand for the other does.

Quiz 4: The Market Forces of Supply and Demand