Question 1

The law of demand says that

Accepted Answer

The law of demand states that as the price of a good or service increases, the quantity demanded decreases, and vice versa. Therefore, when there is an increase in price, the quantity demanded will also decrease. Choice B correctly reflects this concept.

Question 2

Alyssa rents 5 movies per month when the price is $3.00 per rental and 7 movies per month when the price is $2.50 per rental.Alyssa's demand demonstrates the law of

Accepted Answer

Alyssa's demand for movies illustrates the law of demand, which states that as the price of a good or service increases, the quantity demanded of that good or service will decrease, all else being equal. This is because people will typically buy less of a good or service when it becomes more expensive. In this case, we see that as the price of a movie rental decreases, the quantity of movies rented by Alyssa increases, which is consistent with the law of demand.

Question 3

According to the law of demand,

Accepted Answer

The law of demand states that as the price of a good or service increases, the quantity demanded decreases and vice versa. Therefore, price and quantity demanded are negatively related.

Question 4

Economists in general

Accepted Answer

Economists recognize that tastes are subjective and therefore difficult to quantify or explain. However, they acknowledge the impact of changing tastes on market behavior and study the effects on demand, supply, and pricing in response to shifts in consumer preferences.

Question 5

A higher price for batteries would result in a(n)

Accepted Answer

The answer of A higher price for batteries would result...

Question 6

A likely example of complementary goods for most people would be

Accepted Answer

Complementary goods are those that are usually consumed together. Hamburgers and French fries are commonly sold together, and most people consume both items as a meal. While hamburgers and hot dogs can be considered similar items, they are not complementary goods in the same way as hamburgers and French fries. Lawnmowers and automobiles as well as Dr. Pepper and Pepsi are not complementary goods at all.

Question 7

When it comes to people's tastes,economists generally believe that

Accepted Answer

Economists generally believe that people's tastes are based on historical and psychological forces, which are not necessarily within the realm of economics. These forces may include cultural norms, social influences, personal experiences, and individual preferences, among others. Therefore, understanding people's tastes requires interdisciplinary approaches that go beyond traditional economic models.

Question 8

Suppose you like to make,from scratch,pies filled with banana cream and vanilla pudding.You notice that the price of bananas has increased.How would this price increase affect your demand for vanilla pudding?

Accepted Answer

The increase in the price of bananas would decrease the demand for banana cream pies, as the cost of production has gone up. This would result in a lower demand for vanilla pudding, as there would be fewer pies being made overall.

Question 9

Which of the following demonstrates the law of demand?

Accepted Answer

The law of demand states that, other things being equal, as the price of a good decreases, the quantity demanded increases. Dave buying more donuts at a lower price demonstrates this principle.

Question 10

Two goods are complements if a decrease in the price of one good

Accepted Answer

The answer of Two goods are complements if a decrease...

Question 11

Currently you purchase 6 packages of hot dogs a month.You will graduate from college in December and you will start a new job in January.You have no plans to purchase hot dogs in January.For you,hot dogs are

Accepted Answer

Hot dogs are considered an inferior good because as a person's income increases, they usually purchase higher quality and more expensive meats. In this scenario, the individual is planning to stop purchasing hot dogs when they start their new job, which likely comes with a higher income.

Question 12

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,

Accepted Answer

The news of the peanut crop being wiped out and the resulting increase in peanut prices is likely to create a sense of urgency among peanut butter lovers. Given that there are no immediate substitutes, consumers may begin stockpiling peanut butter or increasing their consumption of it immediately, leading to an increase in demand for peanut butter. Therefore, option B is the best choice.

Question 13

Two goods are substitutes if a decrease in the price of one good

Accepted Answer

When two goods are substitutes, a decrease in the price of one good typically leads to a decrease in the demand for the other good, as consumers switch to the cheaper option.

Question 14

You lose your job and as a result you buy fewer romance novels.This shows that you consider romance novels to be a(n)

Accepted Answer

The answer of You lose your job and as a...

Question 15

Which of the following statements about people's tastes is correct?

Accepted Answer

Economists are typically more interested in how changes in people's tastes affect the overall market demand for goods and services, rather than in explaining or predicting individuals' subjective tastes. While it is true that people's tastes can change over time, these changes may not always be noticeable or significant enough to cause major shifts in demand curves.

Question 16

The negative relationship between price and quantity demanded

Accepted Answer

The negative relationship between price and quantity demanded applies to most goods in the economy, and is represented by a downward-sloping demand curve. This relationship is referred to as the Law of Demand. Therefore, all of the above statements are correct.

Question 17

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

Accepted Answer

The announcement of future rebates may lead consumers to delay their purchases, decreasing current demand and shifting the demand curve to the left.

Question 18

A downward-sloping demand curve reflects

Accepted Answer

A downward-sloping demand curve reflects the law of demand which states that as the price of a good increases, the quantity demanded decreases, and as the price of a good decreases, the quantity demanded increases.

Question 19

Suppose today people change their expectations about the future.This change in expectations

Accepted Answer

A change in expectations about the future shifts the overall demand curve, which means that it affects today's demand as well. Therefore, the best choice is C.

Question 20

A likely example of substitute goods for most people would be

Accepted Answer

The answer of A likely example of substitute goods for...

Quiz 4: The Market Forces of Supply and Demand