Question 1

3.4 Market Effects of Changes in Demand
  Figure 3.3
-Figure 3.3 illustrates the demand for tacos. A successful advertising campaign to sell tacos would bring about a movement from

Accepted Answer

A successful advertising campaign would increase the demand for tacos, shifting the demand curve to the right, from D₀ to D₁, indicating a higher quantity demanded at each price level.

Question 2

3.4 Market Effects of Changes in Demand
  Figure 3.3
-Figure 3.3 illustrates the demand for tacos. Assume that tacos and beer are complements. A decrease in the price of beer would bring about a movement from

Accepted Answer

A decrease in the price of beer, assuming beer and tacos are complements, would increase the demand for tacos, shifting the demand curve from D₀ to D₂.

Question 3

When the price of apples goes up

Accepted Answer

When the price of apples goes up, the quantity of apples demanded will decrease, ceteris paribus. This is because as the price of apples increases, consumers will most likely look for substitutes or decrease their overall demand for apples.

Question 4

3.4 Market Effects of Changes in Demand
  Figure 3.3
-Figure 3.3 illustrates the demand for tacos. Assume that tacos and burritos are substitutes. A decrease in the price of burritos would bring about a movement from

Accepted Answer

A decrease in the price of burritos, which are substitutes for tacos, would decrease the demand for tacos as consumers switch to the now cheaper burritos. This would be represented by a shift in the demand curve for tacos from D₂ to D₀, indicating a decrease in demand.

Question 5

Suppose that consumers expect that the price of a product will increase in the future. The result is that

Accepted Answer

If consumers expect the price of a product to increase in the future, they will want to buy more of it now at the lower price. This will result in an increase in current demand for the product.

Question 6

3.4 Market Effects of Changes in Demand
  Figure 3.3
-Figure 3.3 illustrates the demand for tacos. Assume tacos are an inferior good. An increase in income would bring about a movement from

Accepted Answer

For an inferior good, an increase in income leads to a decrease in the quantity demanded. This is represented by a shift from a higher demand curve (D₂) to a lower one (D₁), indicating that people are buying less of the inferior good as their income increases.

Question 7

3.4 Market Effects of Changes in Demand
  Figure 3.3
-Figure 3.3 illustrates the demand for tacos. An increase in the demand for tacos is represented by the movement from

Accepted Answer

An increase in demand for tacos is represented by a shift of the demand curve to the right, from D₀ to D₁, indicating that at the same price, more tacos are demanded.

Question 8

Landon demands more sushi as his income increases. From this we can conclude that, for Landon

Accepted Answer

When Landon's income increases, he demands more sushi which indicates that sushi is a normal good. A normal good is a type of good whose demand increases as income increases, and decreases as income decreases.

Question 9

3.4 Market Effects of Changes in Demand
  Figure 3.3
-Figure 3.3 illustrates the demand for tacos. A decrease in the demand for tacos is represented by the movement from

Accepted Answer

A decrease in demand is represented by a shift of the demand curve to the left, from D₂ to D₁.

Question 10

Governments sometime create an excess supply of a product by setting a minimum price that is greater than the equilibrium price, resulting in a permanent excess supply of the product. This is known as a price ceiling.

Accepted Answer

This statement is incorrect. A price ceiling is a maximum price that is set by the government, which can result in a shortage of the product. An excess supply is more likely to occur when the government sets a price floor (a minimum price that is above the equilibrium price).

Question 11

Suppose that a product benefits from a successful advertising campaign. The result is that

Accepted Answer

Successful advertising campaigns usually increase the awareness and desirability of a product, which in turn leads to increased demand.

Question 12

3.4 Market Effects of Changes in Demand
  Figure 3.3
-Figure 3.3 illustrates the demand for tacos. Assume that tacos and beer are complements. An increase in the price of beer would bring about a movement from

Accepted Answer

When the price of beer increases, and since beer and tacos are complements, the demand for tacos would decrease, shifting the demand curve from D₂ to D₁.

Question 13

Assume that coffee and tea are substitutes. When the price of coffee increases

Accepted Answer

When the price of coffee increases, consumers may switch to tea as a substitute, leading to an increase in the demand for tea. This is because as coffee becomes relatively more expensive, consumers will look for a cheaper alternative, which in this case is tea.

Question 14

Assume that tortilla chips and salsa are complements. When the price of tortilla chips decreases

Accepted Answer

When the price of tortilla chips decreases, people are more likely to buy them, so the demand for salsa, which goes well with tortilla chips, also increases.

Question 15

When the price of almonds falls

Accepted Answer

When the price of almonds falls, ceteris paribus, the quantity of almonds demanded increases. This is known as the Law of Demand. As the price of almonds falls, consumers are willing and able to buy more almonds at the lower price, leading to an increase in quantity demanded. The demand for almonds, however, may or may not change depending on various other factors like income, availability of substitutes, and consumer preferences.

Question 16

3.4 Market Effects of Changes in Demand
  Figure 3.3
-Figure 3.3 illustrates the demand for tacos. If people expect the price of tacos to decrease in the near future, this would most likely bring about a movement from

Accepted Answer

Expectations of a future price decrease would lead to a decrease in current demand as people wait for the lower prices, shifting the demand curve leftward from D₂ to D₀.

Question 17

3.4 Market Effects of Changes in Demand
  Figure 3.3
-Figure 3.3 illustrates the demand for tacos. A decrease in price of tacos would bring about a movement from

Accepted Answer

The answer of 3.4 Market Effects of Changes in Demand
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Question 18

3.4 Market Effects of Changes in Demand
  Figure 3.3
-Figure 3.3 illustrates the demand for tacos. An increase in the number of consumers in the market would bring about a movement from

Accepted Answer

An increase in the number of consumers in the market would increase the demand for tacos, shifting the demand curve to the right, from D₀ to D₂.

Question 19

3.4 Market Effects of Changes in Demand
  Figure 3.3
-Figure 3.3 illustrates the demand for tacos. Assume tacos are a normal good. An increase in income would bring about a movement from

Accepted Answer

An increase in income would cause an increase in demand for tacos, shifting the demand curve from D₀ to D₁. Points A and C are specific points on the original demand curve, so they are not affected by the shift in demand. Therefore, the correct answer is D) D₀ to D₁.

Question 20

3.4 Market Effects of Changes in Demand
  Figure 3.3
-Figure 3.3 illustrates the demand for tacos. An increase in price of tacos would bring about a movement from

Accepted Answer

An increase in price of tacos would bring about a decrease in demand for tacos, causing a movement along the demand curve from point c to point a.

Quiz 3: Demand, Supply, and Market Equilibrium

3.4 Market Effects of Changes in Demand Figure 3.3 -Figure 3.3 illustrates the demand for tacos. A successful advertising campaign to sell tacos would bring about a movement from

3.4 Market Effects of Changes in Demand Figure 3.3 -Figure 3.3 illustrates the demand for tacos. Assume that tacos and beer are complements. A decrease in the price of beer would bring about a movement from

When the price of apples goes up

3.4 Market Effects of Changes in Demand Figure 3.3 -Figure 3.3 illustrates the demand for tacos. Assume that tacos and burritos are substitutes. A decrease in the price of burritos would bring about a movement from

Suppose that consumers expect that the price of a product will increase in the future. The result is that

3.4 Market Effects of Changes in Demand Figure 3.3 -Figure 3.3 illustrates the demand for tacos. Assume tacos are an inferior good. An increase in income would bring about a movement from

3.4 Market Effects of Changes in Demand Figure 3.3 -Figure 3.3 illustrates the demand for tacos. An increase in the demand for tacos is represented by the movement from

Landon demands more sushi as his income increases. From this we can conclude that, for Landon

3.4 Market Effects of Changes in Demand Figure 3.3 -Figure 3.3 illustrates the demand for tacos. A decrease in the demand for tacos is represented by the movement from

Governments sometime create an excess supply of a product by setting a minimum price that is greater than the equilibrium price, resulting in a permanent excess supply of the product. This is known as a price ceiling.

Suppose that a product benefits from a successful advertising campaign. The result is that

3.4 Market Effects of Changes in Demand Figure 3.3 -Figure 3.3 illustrates the demand for tacos. Assume that tacos and beer are complements. An increase in the price of beer would bring about a movement from

Assume that coffee and tea are substitutes. When the price of coffee increases

Assume that tortilla chips and salsa are complements. When the price of tortilla chips decreases

When the price of almonds falls

3.4 Market Effects of Changes in Demand Figure 3.3 -Figure 3.3 illustrates the demand for tacos. If people expect the price of tacos to decrease in the near future, this would most likely bring about a movement from

3.4 Market Effects of Changes in Demand Figure 3.3 -Figure 3.3 illustrates the demand for tacos. A decrease in price of tacos would bring about a movement from

3.4 Market Effects of Changes in Demand Figure 3.3 -Figure 3.3 illustrates the demand for tacos. An increase in the number of consumers in the market would bring about a movement from

3.4 Market Effects of Changes in Demand Figure 3.3 -Figure 3.3 illustrates the demand for tacos. Assume tacos are a normal good. An increase in income would bring about a movement from

3.4 Market Effects of Changes in Demand Figure 3.3 -Figure 3.3 illustrates the demand for tacos. An increase in price of tacos would bring about a movement from