Demand

Jack likes tacos. He values the first taco he eats at $5.00, the second taco at $4.00, the third taco at $3.00, and the fourth taco at $2.00. If the price of tacos is $2.50, Jack will buy _______ tacos.

3

If the price of Pepsi decreases, all else held constant, then we'd expect to see a consequent shift of the demand curve for A. Coke to the left. B. Coke to the right. C. Pepsi to the left. D. Pepsi to the right.

A. Coke to the left.

Which of the following statements best describes the example used to demonstrate markets? A. Víctor wants to purchase oranges from Clara B. Clara wants to purchase apples from Victor C. Clara wants to purchase oranges from Victor D. Victor wants to purchase apples from Clara

A. Víctor wants to purchase oranges from Clara

A market is: A. a system where buyers and sellers interact to trade goods, services, or resources. B. created by consumers only. C. established by the government. D. created by producers only.

A. a system where buyers and sellers interact to trade goods, services, or resources.

The law of demand states that: A. as the price of a good, service, or resource falls; the quantity demanded will rise, all else held constant. B. as the use of a good, service, or resource expands; the quantity demanded will rise, all else held constant. C. as the quantity of a good, service, or resource rises; the price demanded will rise, all else held constant. D. when more people want a good, service, or resource, more of it will be produced.

A. as the price of a good, service, or resource falls; the quantity demanded will rise, all else held constant.

Which of the following pairs are not considered to be complementary goods? A. coffee and tea B. digital cameras and memory cards C. cereal and milk D. fertilizer and irrigation systems

A. coffee and tea

An increase in the demand for music downloads indicates that more music downloads are A. demanded even if prices of music downloads stay the same. B. demanded because music download prices have decreased. C. demanded because sellers are selling more music downloads. D. demanded because sellers are putting music downloads on sale

A. demanded even if prices of music downloads stay the same.

Refer to the three demand curves. An "increase in quantity demanded" caused by a change in price would be illustrated by a change from A. point 4 to point 6. B. point 5 to point 1. C. point 4 to point 1. D. point 2 to point 5.

A. point 4 to point 6.

A change in quantity demanded is: A. the change in the quantity of a good, service, or resource that consumers, firms, and governments are willing and able to buy due to a change in its price. B. the quantity of a good, service, or resource that consumers, firms, and governments are willing and able to buy at any price, all else held constant. C. the change in the quantity of a good, service, or resource that consumers, firms, and governments are willing and able to buy due to a change in income. D. the quantity of a good, service, or resource that consumers, firms, and governments are willing and able to buy at a given price, all else held constant.

A. the change in the quantity of a good, service, or resource that consumers, firms, and governments are willing and able to buy due to a change in its price.

The interaction of buyers and sellers in a market is fundamental for the determination of: A. the price of goods and services. B. minimum wage. C. price floors and price ceilings. D. Inflation.

A. the price of goods and services.

Use the table below to complete the question. This table represents the demand for peaches in Hoboken, a town in New Jersey. Demand for PeachesPrice (dollars) Quantity Demanded (pounds) $20 2 14 14 8 26 2 38 If the market price for peaches is $8 per pound, what is the quantity of peaches demanded in Hoboken? A. 20 pounds B. 26 pounds C. 14 pounds D. 38 pounds

B. 26 pounds

Which is the broadest definition of a market? A. Any individual or business that consume or use goods and services. B. A group of buyers and sellers who exchange a good, service, or resource, not necessarily at a specific place. C. Any individual or business that consume or use goods and services. D. An institution engaged in the business of dealing with financial transactions such as loans and deposits.

B. A group of buyers and sellers who exchange a good, service, or resource, not necessarily at a specific place.

A change in quantity demanded can be described as: A. a movement along the supply curve that results from a change in the good's own price. B. a movement along the demand curve that results from a change in the good's own price. C. a shift in the demand curve that results from a change in the good's own price. D. a shift in the supply curve that results from a change in the good's own price.

B. a movement along the demand curve that results from a change in the good's own price.

Refer to the three demand curves for coffee and assume that coffee is a normal good. Which of the following would shift the demand for coffee from D1 to D2? A. an increase in the price of coffee B. an increase in consumer incomes C. a decrease in consumer incomes D. a decrease in the price of coffee

B. an increase in consumer incomes

Suppose the price of product X increases. We would expect this price increase to A. increase the demand for complementary good Y and decrease the demand for substitute product Z. B. decrease the demand for complementary good Y and increase the demand for substitute product Z. C. increase the demands for both complementary good Y and substitute product Z. D. decrease the demands for both complementary good Y and substitute product Z.

B. decrease the demand for complementary good Y and increase the demand for substitute product Z.

Because of diminishing marginal utility, the benefit of consuming more of a good: A. increases with each additional unit, so the price consumers are willing and able to pay increases with increased consumption. B. falls with each additional unit, so the price consumers are willing and able to pay falls with increased consumption. C. increases with each additional unit, so the price consumers are willing and able to pay falls with increased consumption. D. falls with each additional unit, so the price consumers are willing and able to pay increases with increased consumption.

B. falls with each additional unit, so the price consumers are willing and able to pay falls with increased consumption.

Markets, such as the New York Stock Exchange and your local retail store, are ______ markets. A. unregulated B. formal C. tethered D. informal

B. formal

Which of the following goods would most likely be an inferior good? A. French wines B. generic detergent C. theater tickets D. steak

B. generic detergent

Generally, in a perfectly competitive market,: A. individuals can directly influence the price. B. individuals do not directly influence the prices, but collectively all individuals have an effect on price. C. the price is set by the sellers. D. the price changes so frequently that no one can influence it.

B. individuals do not directly influence the prices, but collectively all individuals have an effect on price.

The relationship between quantity demanded and price is a(n) _____ relationship. A. direct B. inverse C. general D. dictated

B. inverse

Any place where, or mechanism by which, buyers and sellers interact to trade goods, services, or resources is a called a(n): A. store. B. market. C. opening. D. system.

B. market.

The substitution effect is the effect that a change in the: A. price of one good, service, or resource has on the price of another. B. price of one good, service, or resource has on the demand for another. C. quantity of one good, service, or resource has on the price of another. D. quantity of one good, service, or resource has on the demand for another.

B. price of one good, service, or resource has on the demand for another.

Select all that apply The income effect: A. only works in conjunction with the law of diminishing marginal utility. B. refers to the change in the demand for a good caused by a change in a consumer's purchasing power. C. works in the same direction as the substitution effect for normal goods. D. works in the same direction as the substitution effect for inferior goods. is the same as the substitution effect.

B. refers to the change in the demand for a good caused by a change in a consumer's purchasing power. C. works in the same direction as the substitution effect for normal goods.

If the price of gasoline increases significantly, then we'd expect the demand curve for large trucks and SUVs to A. shift to the right. B. shift to the left. C. become upward-sloping. D. not shift, but there will be a movement along that demand curve.

B. shift to the left.

Pam sees that the price of bananas has risen in the grocery store. All else equal, she decides to buy more tangerines than she normally purchases. From the information given, you might conclude that: A. bananas are a luxury good. B. tangerines and bananas are substitutes. C. tangerines and bananas are complements. D. tangerines are an inferior good.

B. tangerines and bananas are substitutes.

Without individuals and households that are willing and able to purchase a good: A. minimum wages will steadily increase. B. the demand side of the market cannot exist. C. the government side of the market cannot exist. D. the international side of the market cannot exist.

B. the demand side of the market cannot exist.

A market refers to: A. any store, physical or online, that sells new or used goods. B. the interaction of buyers and sellers of a particular good. C. a physical retail store selling many new goods. D. any meeting place buyers and sellers use to purchase goods.

B. the interaction of buyers and sellers of a particular good.

In most markets, _____ is determined by the interactions of numerous buyers and sellers. A. the utility derived by consumers B. the price of goods and services C. rent control D. the minimum wage

B. the price of goods and services

How many different people and prices were considered when examining the demand for sunglasses? A. 3 B. 4 C. 5 D. 6

C. 5

The demand schedule represents the relationship between the prices of a good, service, or resource: A. and the quantity that individuals and firms are willing and able to sell, all else held constant, as a curve. B. and the quantity that individuals and firms are willing and able to sell, all else held constant, in a tabular form. C. and the quantity that individuals and firms are willing and able to buy, all else held constant, in a tabular form. D. and the quantity that individuals and firms are willing and able to buy, all else held constant, as a curve.

C. and the quantity that individuals and firms are willing and able to buy, all else held constant, in a tabular form.

When economists refer to resources, they are referring to: A. a tangible product or action that consumers, firms, or governments wish to purchase. B. an intangible product that consumers, firms, or governments wish to purchase. C. any item that is used to produce goods and services. D. the willingness to assemble the factors of production to produce output.

C. any item that is used to produce goods and services.

A market requires: A. a government official determining the price and quantity supplied. B. a physical location that can be registered with the government. C. buyers who are willing and able to purchase the good. D. a physical or online meeting place where sellers can present goods.

C. buyers who are willing and able to purchase the good.

In a market,: A. competition among suppliers tends to drive prices down, and competition among buyers tends to drive prices up. B. only buyers and sellers have information about prices. C. competition among suppliers tends to drive prices up, and competition among buyers tends to drive prices down. D. buyers and sellers meet to decide on the how the market should operate.

C. competition among suppliers tends to drive prices up, and competition among buyers tends to drive prices down.

A graphical representation of the relationship between the price of a good, service, or resource and the quantity that individuals and firms are willing and able to buy, all else held constant, describes the: A. price schedule. B. demand schedule. C. demand curve. D. market curve.

C. demand curve.

A tangible product that consumers, firms, or governments wish to purchase is a: A. market. B. service. C. good. D. resource.

C. good.

The income effect is the effect that a change in the: A. quantity of one good, service, or resource has on the price of another. B. quantity of a good, service, or resource has on the purchasing power of income. C. price of a good, service, or resource has on the purchasing power of income. D. price of one good, service, or resource has on the demand for another.

C. price of a good, service, or resource has on the purchasing power of income.

When the price of a good or service decreases: A. quantity demanded decreases. B. demand decreases. C. quantity demanded increases. D. demand increases.

C. quantity demanded increases.

An intangible product that consumers wish to purchase is a: A. resource. B. good. C. service. D. patent.

C. service.

In a "market,"prices and quantities traded are determined mostly by: A. the length of time the producer has been in business. B. how long the product has been on the market. C. the interaction of buyers and sellers in a market. D. the cost of production.

C. the interaction of buyers and sellers in a market.

When we graph the relationship between price and quantity demanded: A. we cannot predict the shape of the graph. B. we call the result a demand curve, which is B. drawn as a backward-bending curve. C. we call the result a demand curve, but demand curves are often drawn as straight lines. D. it could be a U-shaped curve.

C. we call the result a demand curve, but demand curves are often drawn as straight lines.

Which of the following is something that markets cannot do? A. Determine the equilibrium price of a good or service B. Make buyers and sellers better off C. Determine the equilibrium quantity of a good or service D. Provide unlimited goods and services

D. Provide unlimited goods and services

Which of the following will not cause a change in the demand for product A? A. a change in the number of buyers B. a change in the price of A C. a change in consumer incomes D. a change in tastes

D. a change in tastes

A market price: A. any price at which buyers desire to purchase a good or service. B. any price at which sellers desire to sell their good or service C. price dictated by a government agency before trading can begin D. a price at which buyers and sellers agree to exchange money for a good or service.

D. a price at which buyers and sellers agree to exchange money for a good or service.

If X is a normal good, an increase in income will shift the A. supply curve for X to the left. B. supply curve for X to the right. C. demand curve for X to the left. D. demand curve for X to the right.

D. demand curve for X to the right.

A tabular representation of the relationship between the price of a good, service, or resource and the quantity that individuals and firms are willing and able to buy, all else held constant, describes the: A. demand curve B. demand table. C. demand concept. D. demand schedule.

D. demand schedule.

A higher price reduces the quantity of a product demanded because A. the purchasing power of individuals increases. B. the financial assets of individuals increase. C. individuals will buy more of the product and less of its substitutes. D. individuals will buy less of the product and more of its substitutes.

D. individuals will buy less of the product and more of its substitutes.

All else held constant, an increase in the price of tablets will result in a A. leftward shift of the demand curve for tablets. B. rightward shift of the demand curve for tablets. C. decrease in the demand for tablets. D. movement up and to the left along the demand curve for tablets.

D. movement up and to the left along the demand curve for tablets.

Diminishing marginal utility describes the: A. positive relationship between the quantity of a good, service, or resource and the marginal utility obtained from each additional unit consumed in a given period of time. B. negative relationship between the quantity of a good, service, or resource and the total utility obtained from all units consumed in a given period of time. C. positive relationship between the quantity of a good, service, or resource and the total utility obtained from all units consumed in a given period of time. D. negative relationship between the quantity of a good, service, or resource and the marginal utility obtained from each additional unit consumed in a given period of time.

D. negative relationship between the quantity of a good, service, or resource and the marginal utility obtained from each additional unit consumed in a given period of time.

When we talk about the demand for a product, we are referring to: A. the price that consumers are willing and able to pay, all else held constant. B. the amount that buyers and sellers both want to exchange. C. the quantity that consumers are willing and able to buy D. at the current price, all else held constant. the quantity that consumers are willing and able to buy at a variety of different prices, all else held constant.

D. the quantity that consumers are willing and able to buy at a variety of different prices, all else held constant.

Which of the following are reasons the demand curve is downward sloping? (Select all that apply) Diminishing marginal utility Income effect Income changes Substitution effect Price effect Marginal effect

Diminishing marginal utility Income effect Substitution effect

Everyone's individual demand for a particular good or service can be represented by the same demand curve. (T/F)

False

Suppose you have $30 to spend on tacos each week. When the price of tacos increases from $2.00 to $3.00, the purchasing power falls from 15 tacos per week to 10 tacos per week. This decrease in the quantity of tacos demanded illustrates the __________ effect.

INCOME

Which of the following correctly states the three main reasons the demand curve is downward sloping? Marginal cost, complements, and purchasing power Marginal benefit, purchasing power, and substitutes Substitutes, complements, and number of buyers Marginal benefit, marginal cost, and number of buyers

Marginal benefit, purchasing power, and substitutes

Which statement best describes the demand curve for most goods and services? The demand curve is downward sloping. The demand curve is horizontal at the equilibrium price. The demand curve is vertical at the equilibrium quantity. The demand curve is upward sloping.

The demand curve is downward sloping.

How is a decrease in demand depicted graphically? Movement upward, to the left, along an existing demand curve. Movement downward, to the right, along an existing demand curve. The demand curve shifts to the left. The demand curve shifts to the right.

The demand curve shifts to the left.

For normal goods, an increase in income will have what effect on demand? The demand curve will shift to the left. There will be no effect on demand. There will be movement along a demand curve. The demand curve will shift to the right.

The demand curve will shift to the right.

Which of the following are reasons for the demand curve sloping downward? The income effect Increasing marginal cost The substitution effect The consumer effect Diminishing marginal utility

The income effect The substitution effect Diminishing marginal utility

People do not always purchase all of the things they want. (T/F)

True

The change in the quantity of a good, service, or resource that consumers, firms, and governments are willing and able to buy due to a change in its price is called: a change in the quantity demanded. the market effect. a change in demand. the price effect.

a change in the quantity demanded.

Consider each of the following scenarios and determine whether it is an example of the income effect, the substitution effect, or diminishing marginal utility. a. Sasha likes to treat herself to a small latte each afternoon. On Wednesdays, when the coffee shop decreases the price of lattes, Sasha buys a large latte instead. b. The price of chicken nuggets rises from $3 to $3.50 for a box of six. The price of hamburgers stays the same. Mateo used to eat chicken nuggets three times a week. He has replaced one chicken nuggets meal per week with hamburgers. c. Jack offers Victoria a plate of a dozen chicken wings. Victoria enjoys the first wing the best, the second wing a little bit less, and by the seventh wing, she has had enough and chooses not to eat the remaining five wings.

a. income b. substitution c. diminishing marginal

In economics, the word "curve" is typically used to refer to: a relationship between two variables that is constantly changing. a relationship between two variables that is unknown. almost any graphical representation of the relationship between two variables. a conceptual relationship.

almost any graphical representation of the relationship between two variables.

In economics, the word "curve" is typically used to refer to: a relationship between two variables that is unknown. almost any graphical representation of the relationship between two variables. a conceptual relationship. a relationship between two variables that is constantly changing.

almost any graphical representation of the relationship between two variables.

The demand curve: is always a nonlinear curve. is always a straight line. can be a straight line or a nonlinear curve. is never horizontal.

can be a straight line or a nonlinear curve.

According to the law of , _________ price and quantity demanded are inversely related.

demand

The relationship between the price of a good, service, or resource and the quantity that individuals and firms are willing and able to buy, all else held constant, is graphically represented by a: demand curve. demand schedule. supply curve. table. supply schedule.

demand curve.

A normal good, as opposed to an inferior good, is a good for which: demand increases as income increases. demand decreases as income increases. the law of demand does not apply. the law of demand applies.

demand increases as income increases.

When a nonprice determinant of demand changes, a change in: the quantity demanded occurs, which causes a movement along the demand curve. price occurs, which has the effect of moving along the demand curve. the quantity supplied occurs, which causes a movement along the demand curve. demand occurs, which has the effect of shifting the entire demand curve to the right or left.

demand occurs, which has the effect of shifting the entire demand curve to the right or left.

Competition among suppliers tends to drive prices _______; competition among buyers tends to drive prices ______ . up; down down; down down; up up; up

down; up

Due to the inverse relationship between the price of a good and the quantity demanded for the good, we expect that the demand curve is: upward-sloping. vertical. horizontal. downward-sloping.

downward-sloping.

__________ markets are highly structured, whereas ___________ markets are less structured with fewer rules.

formal: informal

A(n) __________ is a tangible product that consumers, firms, or governments wish to purchase.

good

When graphing a demand curve, we always place quantity demanded on the (horizontal/vertical) axis.

horizontal

Suppose you have $30 to spend on tacos each week. When the price of tacos decreases from $3.00 to $2.00, the purchasing power increases from 10 tacos per week to 15 tacos per week. This increase in the quantity of tacos demanded illustrates the ______________ effect.

income

A good for which there is an inverse relationship between the demand for the good and income is a(n) _________ good

inferior

When the price of a good rises, we can expect that: people will want more of the good. the good will be in short supply. less of the good will be purchased. the market will be disrupted.

less of the good will be purchased.

The overall or total demand for a good, service, or resource is called ________ demand.

market

When there is an increase in demand,: more is demanded at every price. less is supplied at lower prices. less is demanded at every price. less is demanded at higher prices.

more is demanded at every price.

When graphing a demand curve, we place _______ on the y-axis and _________ on the x-axis. price; demand quantity demanded; price price; quantity demanded demand; price

price; quantity demanded

In most markets, __________ are determined by the interactions of numerous buyers and sellers.

prices

There is an inverse relationship between price and _________ demanded.

quantity

A(n) ____________ is any item, whether a gift of nature, the result of production, or the result of human effort, that is used to produce goods and services

resource

A _______ is an intangible product or action that consumers, firms, or governments wish to purchase.

service

According to the law of demand, lower prices lead to a higher quantity demanded. As a result, the demand curve: should slope down. should slope upward. is horizontal. is vertical.

should slope down.

When the price of oranges increases, Jack buys more apples and fewer oranges. The decrease in the quantity demanded for oranges and the increase in the quantity demanded for apples is an example of the ________ effect.

substitution

Without individuals and households that are willing and able to purchase a good: the demand side of the market cannot exist. minimum wages will steadily increase. the international side of the market cannot exist. the government side of the market cannot exist.

the demand side of the market cannot exist.

When a nonprice determinant of demand changes,: there is a movement along the demand curve. price changes. there is a movement along the supply curve. the entire demand curves shifts.

the entire demand curves shifts.

Whether a good is normal or inferior depends on: the preferences of all consumers in the aggregate. the individual and his or her age. the time frame in question. the market and prices.

the preferences of all consumers in the aggregate.

The income effect, the substitution effect, and diminishing marginal utility together explain: why demand curves exist. why demand curves are downward-sloping. how markets function. the importance of prices.

why demand curves are downward-sloping.

The income effect, the substitution effect, and diminishing marginal utility explain: why the price tends to be in equilibrium. why the quantity demanded will fall when prices rise. why the quantity demanded will fall when prices fall. why the quantity demanded will rise when prices rise.

why the quantity demanded will fall when prices rise.

A demand curve and demand schedule express information about the: willingness and ability to work. willingness and ability to purchase a good. willingness and ability to pay taxes. willingness and ability to produce a good.

willingness and ability to purchase a good.