Question 1

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

Accepted Answer

Inferior goods are goods that people buy less of as their income increases. Therefore, a decrease in income will cause people to buy more of the inferior good, shifting the demand curve to the right.

Question 2

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 3

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 quantity demanded of a good varies as the price of that good varies, while all other factors that affect how much consumers want to buy are held constant. The income of buyers is only one of many factors that can affect demand, but it is not specifically represented on the demand curve.

Question 4

When the price of a good is high,selling the good is profitable,and so the quantity supplied is large.

Accepted Answer

When the price of a good is high, the profit margin of selling the good increases and thus the quantity supplied increases as well. This is a basic principle of supply and demand.

Question 5

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

Accepted Answer

An upward and leftward movement in the demand curve represents an increase in demand, not a decrease.

Question 6

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 shifting the demand curve for cigarettes to the left, as they are intended to decrease the demand for cigarettes.

Question 7

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 8

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

Accepted Answer

A shift in demand occurs when there is a change in a non-price determinant of demand, such as consumer preferences, income, or the prices of related goods. This results in a change in the quantity demanded at every price, which shifts the entire demand curve to the left or right.

Question 9

Cocoa and marshmallows are complements,so a decrease in the price of cocoa will cause an increase in the demand for marshmallows.

Accepted Answer

When the price of cocoa decreases, people might buy more cocoa to make hot chocolate, and as a result, demand for its complement, marshmallows, will increase.

Question 10

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

Accepted Answer

An increase in the price of a substitute good will cause consumers to switch to the alternative good, resulting in an increase in the demand for the substitute good. This shift is represented by a movement to the right on the demand curve.

Question 11

If a person expects the price of socks to increase next month,then that person's current demand for socks will increase.

Accepted Answer

If a person expects the price of socks to increase next month, they will try to purchase more socks now before the price goes up, thus increasing their current demand for socks.

Question 12

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.

Question 13

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 14

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

Accepted Answer

Complementary goods are those that are often used together, like peanut butter and jelly. When the price of one complementary good increases, demand for the other complementary good decreases because consumers are less willing to pay higher prices for both goods together.

Question 15

Most studies have found that tobacco and marijuana are complements rather than substitutes.

Accepted Answer

Most studies have found that tobacco and marijuana are complements, meaning that individuals who use marijuana are more likely to also use tobacco rather than substituting one for the other.

Question 16

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

The answer of A decrease in the price of a...

Question 17

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 would result in an increase in the quantity demanded of the complement, which would lead to an increase in the demand for the good that is complementary to it. This would shift the demand curve for the good to the right, not to the left.

Question 18

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

Accepted Answer

Whenever a determinant of demand (such as income, consumer tastes and preferences, availability of substitutes, etc.) changes, it affects the quantity of a good or service that consumers are willing and able to buy at every given price. This means that the entire demand curve shifts either to the left or to the right depending on the direction of the change in the determinant of demand.

Question 19

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

Accepted Answer

This is the definition of quantity supplied according to the law of supply in economics.

Question 20

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

Accepted Answer

An increase in demand shifts the demand curve to the right, not to the left.

Quiz 4: The Market Forces of Supply and Demand