ECON chapter 2
The graph below shows Albin's demand curve for sweaters. If the price of sweaters is $40 per sweater, how many sweaters would he buy per year?
0 sweaters
The table below shows a survey for 320 customers to prepare a total market demand curve for peanuts. What is the market demand when the price is $10 per pound?
0.3 billion pounds
Dell and Apple are competitors in the computer market. Which graph illustrates the effect of a rise in the price of Dell computers on the demand for Apple computers?
graph D
In the individual demand curve, as the price gets _____, the quantity demanded gets _____.
lower; larger
If the price of books drops from $15 to $9, the quantity of books demanded in the market would _____ by _____ million books per week.
rise; 0.4
Which of the following would be considered in a cost-benefit analysis to decide if a person should cycle to work or ride the subway? (i) The air pollution that the cyclist has to breathe. (ii) The cost of subway tickets. (iii) The time it takes to cycle to work versus the time it takes to ride the subway to work. (iv) The cost per gallon of gasoline.
(i), (ii) and (iii)
The graph below shows Albin's demand curve for sweaters. If the price of sweaters is $32 per sweater, how many sweaters would he buy per year?
1 sweater
The table contains the monthly demand for soda cans for four students. If these four students make up the entire market, what is the total monthly market demand for soda at $1.50 per can?
148 cans
The table below shows a survey for 320 customers to prepare a total market demand curve for peanuts. What is the market demand when the price is $2 per pound?
2.5 billion pounds
The graph below shows Albin's demand curve for sweaters. If the price of sweaters is $8 per sweater, how many sweaters would he buy per year?
7 sweaters
What is an individual demand curve?
A graph plotting the quantity of an item that someone plans to buy at each price
_____ is a movement of the demand curve itself.
A shift in the demand curve
_____ occur when a good becomes less valuable because other people use it. If more people buy such a product, your demand for it will _____.
Congestion effects; decrease
_____ means that each additional item you buy yields a smaller marginal benefit than the previous item.
Diminishing marginal benefit
_____ are those goods you buy less of when your income rises.
Inferior goods
Which of the following scenarios illustrates the law of demand?
Kathleen eats more steak when the price is low, and less when the price is high.
_____ occur when a good becomes more useful because other people use it. If more people buy such a good, your demand for it will _____.
Network effects; increase
The _____ tells you that you should buy more of an item if its marginal benefit is greater than (or equal to) the price.
Rational Rule for Buyers
_____ is a graph plotting the total quantity of an item demanded by the entire market, at each price.
The market demand curve
A graph plotting the quantity of an item that someone plans to buy at each price is:
an individual demand curve.
Refer to the graph to answer the question. In the graph, the movement from point W to point P represents:
a decrease in demand.
A normal good is:
a good for which higher income causes an increase in demand
Inferior goods are those where you're "making do," and when your income rises, you'll shift to _____, but _____ alternative, instead.
a higher-quality; more expensive
Quantity demanded is on the horizontal axis when you plot a demand curve and shows the:
amount of a good that a person is willing to buy at each price.
Cars _____ gas because you need both gas and a car to drive
complement
If the price of books rises from $6 to $12, the quantity of books demanded in the market would _____ by _____ books per week.
fall; 0.4 million
The city of Vaughan in Ontario, Canada, opened a new subway line that extended the existing subway system between the greater Toronto area and the city of Vaughan. The route previously only had bus service. Which of the following graphs depicts the effect you would expect to see on the demand for bus rides on this route after the introduction of the subway?
graph A
Which of the following graphs illustrates what we expect to see in the market for printing paper if the price of printing paper rises?
graph C
In the individual demand curve, as the price gets _____, the quantity demanded gets _____.
higher, smaller
Your demand for any good will decrease:
if the price of its substitutes falls.
The interdependence principle:
implies that buyers decisions are affected by many factors other than the price of an item
Cars are a complement to gas because you need both gas and a car to drive, and so cheaper cars lead more people to drive, and this _____ the demand for gas, shifting the demand curve _____.
increase, right
Your _____ curve is your marginal benefit curve.
individual demand
When you get hired for a well-paying job, you will most likely view older used cars as
inferior goods
Diminishing marginal benefit:
is when buying an additional item yields a smaller marginal benefit than the previous item.
A rational buyer will:
keep buying a product until marginal benefit equals price.
When plotting a demand curve
price is on the vertical axis
Both the market demand curve and the individual demand curve have _____on the vertical axis and _____ on the horizontal axis.
price; quantity
The graph below shows Olga's demand curve for paper. If the price of paper falls from $6 to $4, the quantity of paper demanded would:
rise from 9 reams to 12 reams.
At each specific price, the total quantity of an item demanded is simply the:
sum of the quantity that each potential consumer will demand at that price.
An individual demand curve is a graph:
that plots the quantity of an item that someone plans to buy, at each price.
When you're no longer holding constant things that affect quantity demanded other than price:
the demand curve may shift.
Paint and paintbrushes are complements. If the price of paint rises, we can expect:
the demand for paintbrushes to decrease.
All the following are factors that may shift an individual demand curve EXCEPT a change in:
the price of the good.
A downward-sloping demand curve implies:
there is an inverse relationship between price and quantity demanded
If your income were to fall, at each and every price level, you can buy a smaller quantity of each type of good, causing your demand curve to shift _____, which we call _____ in demand.
to the left; a decrease
When your income is higher, at each and every price level, you are willing and able to buy a larger quantity of each type of good, causing your demand curve to shift _____, which we call _____ in demand.
to the right; an increase
An increase in demand is a shift _____, and a decrease in demand is a shift _____.
to the right; to the left
The market demand curve is a graph plotting the _____ of an item demanded by _____, at each price.
total quantity; the entire market
To scale up the quantities demanded by a survey of 2,000 people to be representative of 2 million people, _____.
we should multiply each quantity by 1,000
To scale up the quantities demanded by a survey of 3,000 people to be representative of 30 million people,_____.
we should multiply each quantity by 10,000
To scale up the quantities demanded by a survey of 500 people to be representative of 20 million people, _____.
we should multiply each quantity by 40,000
Economists say that understanding demand is all about understanding _____.
marginal benefits
The quantity of gas you buy at any given price might change due to all the following factors, EXCEPT:
an increase in fares for cruises.
Refer to the graph to answer the question. In the graph, the movement from point M to point N represents
an increase in quantity demanded.
The demand curve is downward-sloping. Therefore, when the price becomes _____, the quantity demanded will be _____.
lower; higher
When you apply the Rational Rule for Buyers, you can _____ your economic surplus by continuing to buy until price equals _____.
maximize; marginal benefit
To verify the movement of the demand curve, if the only thing that's changing is the price, then you're thinking about a:
movement along the demand curve.
