Question 1

Other things being equal, the effect of an increase in the price of orange juice would be illustrated by

Accepted Answer

An increase in the price of orange juice would lead to a decrease in the quantity demanded of orange juice, resulting in an upward movement along the demand curve. This is because at a higher price, consumers will be less willing and able to purchase the same quantity of orange juice as before.

Question 2

In which statement(s) are "demand" and "quantity demanded" used correctly? (I) "An increase in the price of coffee will reduce the quantity demanded of coffee."
(II) "An increase in the price of coffee will reduce the demand for cream used in coffee."

Accepted Answer

The answer of In which statement(s) are "demand" and "quantity...

Question 3

Other things constant, an increase in consumer income will

Accepted Answer

An increase in consumer income will shift the demand curve for automobiles to the right because consumers with higher income are able to afford more expensive cars and therefore demand more automobiles at every price.

Question 4

An increase in the demand for a good means that

Accepted Answer

An increase in the demand for a good means that consumers are willing to purchase more of the good at each possible price. This results in a rightward shift of the demand curve, indicating that at every price point, a greater quantity of the good is now demanded. It does not necessarily mean that the good has become scarce or that its price has fallen.

Question 5

For a typical product, a decrease in consumer income will cause the market demand for the product to

Accepted Answer

A decrease in consumer income will likely lead to a decrease in the quantity demanded of the product, thus shifting the demand curve to the left. This is because consumers will have less disposable income to spend on the product, leading them to purchase less of it overall.

Question 6

If people expect the price of coffee to rise next month, the demand for coffee will

Accepted Answer

If people expect the price of coffee to rise next month, they will want to buy more coffee now before the price goes up. This will lead to an increase in demand for coffee now.

Question 7

Which of the following would lead to an increase in the demand for designer blue jeans?

Accepted Answer

An increase in the income of youthful Americans would lead to an increase in the demand for designer blue jeans because as their income rises, they are more likely to spend money on luxury or branded items, such as designer blue jeans. A decrease in the price of designer blue jeans (A) would lead to an increase in quantity demanded, but not necessarily an increase in overall demand. Similarly, a reduction in the price of cotton (B) or an increase in the price of cotton (D) would only affect the cost of production and supply, not demand.

Question 8

Which of the following would lead to an increase in the demand for computer software?

Accepted Answer

A decrease in the price of personal computers would likely lead to an increase in demand for computer software as more people are able to purchase computers and therefore have a use for the software. The other options do not necessarily lead to an increase in demand for computer software.

Question 9

When economists say the demand for a product has increased, they mean the

Accepted Answer

When economists say the demand for a product has increased, they mean that the demand curve has shifted to the right. This means that at every price point, consumers are willing to buy a greater quantity of the product than before.

Question 10

An increase in the price of a good would

Accepted Answer

An increase in price would make the good less attractive to buyers, resulting in a decrease in the quantity demanded. However, it would not necessarily decrease the overall demand for the good in the long term.

Question 11

When economists say the quantity demanded of a product has decreased, they mean the

Accepted Answer

The answer of When economists say the quantity demanded of...

Question 12

Which of the following best represents the effects of a decrease in the price of tomato juice, other things being equal?

Accepted Answer

A decrease in the price of tomato juice would result in a movement along the demand curve for tomato juice. This is because the quantity demanded of tomato juice would increase as a result of the lower price, but the demand curve itself would not shift. Therefore, the correct answer is a downward movement along the demand curve for tomato juice.

Question 13

In which statement(s) is "demand" used correctly? (I) "An increase in the price of hot dogs will reduce the demand for hot dogs."
(II) "An increase in the price of hot dogs will reduce the demand for hot dog buns."

Accepted Answer

The answer of In which statement(s) is "demand" used correctly?...

Question 14

When economists say the demand for a product has decreased, they mean

Accepted Answer

When economists say the demand for a product has decreased, they mean that the demand curve has shifted to the left. This means that at every price point, consumers are willing and able to buy less of the product. This decrease in demand could be caused by a variety of factors, including changes in consumer preferences, shifts in income levels, or the introduction of substitute products.

Question 15

Which of the following is least likely to increase the demand for new tires?

Accepted Answer

If the price of tires decreases, it may encourage people to buy more tires, but it does not necessarily create new demand for tires. Decreases in the price of cars, increases in consumer income, and increases in the number of miles people drive per year are all factors that could increase the demand for new tires.

Question 16

When economists say the quantity demanded of a product has increased, they mean the

Accepted Answer

The answer of When economists say the quantity demanded of...

Question 17

If consumer tastes are changing more in favor of the consumption of a particular good the

Accepted Answer

If consumer tastes are changing in favor of the consumption of a particular good, this means that there is an increase in demand for that good. Therefore, the market demand curve would shift to the right.

Question 18

For a typical product, an increase in consumer income will cause the market demand for the product to

Accepted Answer

An increase in consumer income will likely lead to an increase in demand for a typical product, as consumers have more disposable income to spend. This will result in a shift of the demand curve to the right.

Question 19

Other things constant, a decrease in consumer income will

Accepted Answer

A decrease in consumer income will result in consumers having less money to spend, which will decrease their purchasing power. As a result, they will be less likely to buy luxury items like large-screen television sets, thus decreasing the demand for these sets.

Question 20

Other things being equal, the effect of a decrease in the price of orange juice would be illustrated by

Accepted Answer

A decrease in the price of orange juice would lead to an increase in the quantity demanded of orange juice, as consumers would be more willing and able to buy orange juice at a lower price. This would be represented by a movement along the demand curve, not a shift in the demand curve. Therefore, the correct answer is B.

Quiz 3: A: Supply, Demand, and the Market Process