Question 1

Suppose that when the price of oranges decreases,Sarita decreases her purchases of peaches.To Sarita
A)oranges and peaches are complements.
B)oranges and peaches are inferior goods.
C)oranges and peaches are normal goods.
D)oranges and peaches are substitutes.

Accepted Answer

When the price of oranges decreases, and Sarita decreases her purchases of peaches, it suggests that oranges and peaches are substitutes. As the price of one goes down, she is less willing to pay for the other. This indicates that she substitutes oranges for peaches, making them substitute goods.

Question 2

In January,buyers of gold expect that the price of gold will fall in February.What happens in the gold market in January,holding everything else constant?
A)The demand curve shifts to the right.
B)The quantity demanded increases.
C)The quantity demanded decreases.
D)The demand curve shifts to the left.

Accepted Answer

If buyers expect the price of gold to fall in the future, they will likely delay their purchases in anticipation of a lower price. This leads to a decrease in current demand for gold, causing the demand curve to shift to the left. Therefore, the correct choice is D.

Question 3

Technological advancements have led to lower prices and an increase in the sale of color laser printers.How does this affect the market for traditional inkjet printers?
A)The demand curve for inkjet printers shifts to the right.
B)The demand curve for inkjet printers shifts to the left.
C)The quantity of inkjet printers demanded increases.
D)The quantity of inkjet printers demanded decreases.

Accepted Answer

The answer of Technological advancements have led to lower prices...

Question 4

Several studies have shown promising links between green tea consumption and cancer prevention.How does this affect the market for green tea?
A)The quantity of green tea demanded increases because of a change in tastes in favor of green tea.
B)The green tea demand curve shifts to the right because of a change in tastes in favor of green tea.
C)The green tea demand curve shifts to the left because this new information will increase the price of green tea.
D)The quantity of green tea demanded decreases because this new information will increase the price of green tea.

Accepted Answer

The promising links between green tea consumption and cancer prevention will increase the perceived health benefits of green tea, leading to a change in tastes in favor of green tea. This will cause the green tea demand curve to shift to the right, indicating an increase in the quantity of green tea demanded.

Question 5

Suppose that when the price of pickles decreases,Teddy increases his purchase of ketchup.To Teddy
A)pickles and ketchup are complements.
B)pickles and ketchup and substitutes.
C)pickles and ketchup are normal goods.
D)pickles are a normal good and ketchup is an inferior good.

Accepted Answer

When two goods are complements, they are typically consumed together. In this case, Teddy purchases more ketchup when the price of pickles decreases, which suggests that he is using the pickles and ketchup together. Therefore, pickles and ketchup are complements.

Question 6

If the price of train tickets decreases,what will be the impact in the market for bus travel?
A)The demand curve for bus travel shifts to the right.
B)The quantity of bus travel demanded increases.
C)The demand curve for bus travel shifts to the left.
D)The quantity of bus travel demanded decreases.

Accepted Answer

When the price of train tickets decreases, trains become a more attractive option compared to buses, leading to a decrease in the demand for bus travel. This is represented by a leftward shift in the demand curve for bus travel.

Question 7

Technological advancements have led to lower prices and an increase in the sale of color laser printers.How does this affect the market for laser printer ink cartridges?
A)The demand curve for laser printer ink cartridges shifts to the right.
B)The demand curve for laser printer ink cartridges shifts to the left.
C)The quantity of laser printer ink cartridges demanded increases.
D)The quantity of laser printer ink cartridges demanded decreases.

Accepted Answer

The answer of Technological advancements have led to lower prices...

Question 8

According to a recent study,"Stricter college alcohol policies,such as raising the price of alcohol,or banning alcohol on campus,decrease the number of students who use marijuana." On the basis of this information,how would you describe alcohol and marijuana?
A)The two goods are substitutes in consumption.
B)There is no relationship between the two goods.
C)The two goods are complements in consumption.
D)They are both luxury goods.

Accepted Answer

The answer of According to a recent study,"Stricter college alcohol...

Question 9

If the price of propane-fueled gas grills was to decrease,then
A)the demand for propane would decrease.
B)the demand for propane would increase.
C)the quantity of propane demanded would increase.
D)the quantity of propane demanded would decrease.

Accepted Answer

When the price of propane-fueled gas grills decreases, more people will be likely to purchase them. This will lead to an increase in demand for propane as more people will need propane to fuel their grills. Therefore, the answer is B.

Question 10

Suppose that when the price of hamburgers increases,the Ruiz family increases their purchases of hot dogs.To the Ruiz family
A)hamburgers and hot dogs are complements.
B)hamburgers and hot dogs are inferior goods.
C)hamburgers and hot dogs are normal goods.
D)hamburgers and hot dogs are substitutes.

Accepted Answer

If the consumption of hot dogs increases when the price of hamburgers increases, it indicates that hamburgers and hot dogs are substitutes. When the price of hamburgers goes up, people will substitute hamburgers with other similar goods such as hot dogs. Therefore, the Ruiz family is substituting hamburgers with hot dogs, and they are likely to continue consuming hot dogs until the price of hamburgers decreases or until the price of hot dogs increases too.

Question 11

If an increase in income leads to a decrease in the demand for salami,then salami is
A)an inferior good.
B)a neutral good.
C)a necessity.
D)a normal good.

Accepted Answer

When an increase in income leads to a decrease in the demand for a product, it is considered an inferior good. Salami may be considered an inferior good because as people's income grows, they may choose to purchase higher quality or more expensive meats, causing the demand for salami to decrease.

Question 12

Suppose that when the price of ice cream increases,Liza decreases her purchase of hot fudge.To Liza
A)ice cream and hot fudge are complements.
B)ice cream and hot fudge and substitutes.
C)ice cream and hot fudge are normal goods.
D)ice cream is a normal good and hot fudge is an inferior good.

Accepted Answer

The decrease in Liza's purchase of hot fudge in response to an increase in the price of ice cream suggests that ice cream and hot fudge are complementary goods, meaning that they are typically consumed together.

Question 13

How has the growing popularity of factory outlet stores affected the market for clothing at retail department stores?
A)the demand curve for clothing at retail department stores shifts to the right.
B)the demand curve for clothing at retail department stores shifts to the left.
C)the supply curve for clothing at retail department stores shifts to the right.
D)the supply curve for clothing at retail department stores shifts to the left.

Accepted Answer

The growing popularity of factory outlet stores provides consumers with another option for purchasing clothing at a discounted price. This creates competition for retail department stores, leading to a decrease in demand for clothing at retail department stores. As a result, the demand curve for clothing at retail department stores shifts to the left.

Question 14

Factory incentives on cell phones have encouraged consumers to upgrade their phones.How does this affect the market for bluetooth headsets?
A)The quantity of bluetooth headsets demanded increases.
B)The quantity of bluetooth headsets demanded decreases.
C)The demand for bluetooth headsets increases.
D)The demand for bluetooth headsets decreases.

Accepted Answer

Factory incentives on cell phones encourage more people to upgrade their phones, which means there will be more demand for bluetooth headsets as users upgrade their devices and seek out compatible accessories. As a result, the demand for bluetooth headsets increases.

Question 15

How does the increasing use of digital cameras affect the market for traditional camera film?
A)The demand curve for traditional camera film shifts to the right.
B)The quantity of traditional camera film demanded decreases.
C)The quantity of traditional camera film demanded increases.
D)The demand curve for traditional camera film shifts to the left.

Accepted Answer

The increasing use of digital cameras reduces the need for traditional camera film, leading to a decrease in demand. This is represented by a leftward shift in the demand curve for traditional camera film.

Question 16

If the price of gasoline increases,what will be the impact in the market for public transportation?
A)The demand curve for public transportation shifts to the right.
B)The quantity of public transportation demanded increases.
C)The demand curve for public transportation shifts to the left.
D)The quantity of public transportation demanded decreases.

Accepted Answer

The answer of If the price of gasoline increases,what will...

Question 17

Buyers scrambled to secure stocks of Australian wool following a forecast of an 11 percent decline in wool production.What happens in the Australian wool market as a result of this announcement?
A)The demand curve for Australian wool shifts to the left in anticipation of higher prices in the future.
B)The demand curve for Australian wool shifts to the right in anticipation of higher prices in the future.
C)The quantity of Australian wool demanded increases in anticipation of higher prices in the future.
D)The quantity of Australian wool demanded decreases in anticipation of lower quantities in the future.

Accepted Answer

The announcement of an 11 percent decline in wool production creates an expectation of higher prices in the future, leading buyers to scramble to secure stocks of Australian wool. This anticipation of higher future prices for wool causes an increase in demand, leading to a rightward shift in the demand curve for Australian wool.

Question 18

If the price of smartphones was to increase,then
A)the demand for smartphone apps would decrease.
B)the demand for smartphone apps would increase.
C)the quantity of smartphone apps demanded would increase.
D)the quantity of smartphone apps demanded would decrease.

Accepted Answer

The answer of If the price of smartphones was to...

Question 19

In September,buyers of silver expect that the price of silver will rise in October.What happens in the silver market in September,holding all else constant?
A)The quantity demanded decreases.
B)The demand curve shifts to the left.
C)The demand curve shifts to the right.
D)The quantity demanded increases.

Accepted Answer

When buyers expect that the price of silver will rise in October, this creates a future expectation of higher prices. As such, buyers will want to buy more silver in September in order to take advantage of the current lower prices before the anticipated price increase. This increases demand, causing the demand curve to shift to the right. Therefore, the correct answer is C.

Question 20

How does the decreasing use of DVD players affect the market for prerecorded DVDs?
A)The demand curve for prerecorded DVDs shifts to the right.
B)The quantity of prerecorded DVDs demanded decreases.
C)The quantity of prerecorded DVDs demanded increases.
D)The demand curve for prerecorded DVDs shifts to the left.

Accepted Answer

The decreasing use of DVD players means that there are fewer people who are able to play prerecorded DVDs. This reduces the demand for prerecorded DVDs and causes the demand curve to shift to the left. Therefore, the quantity of prerecorded DVDs demanded decreases.

Quiz 3: Where Prices Come From: the Interaction of Demand and Supply

Suppose that when the price of oranges decreases,Sarita decreases her purchases of peaches.To Sarita

In January,buyers of gold expect that the price of gold will fall in February.What happens in the gold market in January,holding everything else constant?

Technological advancements have led to lower prices and an increase in the sale of color laser printers.How does this affect the market for traditional inkjet printers?

Several studies have shown promising links between green tea consumption and cancer prevention.How does this affect the market for green tea?

Suppose that when the price of pickles decreases,Teddy increases his purchase of ketchup.To Teddy

If the price of train tickets decreases,what will be the impact in the market for bus travel?

Technological advancements have led to lower prices and an increase in the sale of color laser printers.How does this affect the market for laser printer ink cartridges?

According to a recent study,"Stricter college alcohol policies,such as raising the price of alcohol,or banning alcohol on campus,decrease the number of students who use marijuana." On the basis of this information,how would you describe alcohol and marijuana?

If the price of propane-fueled gas grills was to decrease,then

Suppose that when the price of hamburgers increases,the Ruiz family increases their purchases of hot dogs.To the Ruiz family

If an increase in income leads to a decrease in the demand for salami,then salami is

Suppose that when the price of ice cream increases,Liza decreases her purchase of hot fudge.To Liza

How has the growing popularity of factory outlet stores affected the market for clothing at retail department stores?

Factory incentives on cell phones have encouraged consumers to upgrade their phones.How does this affect the market for bluetooth headsets?

How does the increasing use of digital cameras affect the market for traditional camera film?

If the price of gasoline increases,what will be the impact in the market for public transportation?

Buyers scrambled to secure stocks of Australian wool following a forecast of an 11 percent decline in wool production.What happens in the Australian wool market as a result of this announcement?

If the price of smartphones was to increase,then

In September,buyers of silver expect that the price of silver will rise in October.What happens in the silver market in September,holding all else constant?

How does the decreasing use of DVD players affect the market for prerecorded DVDs?