ECON Chapter 4
For consumers, donuts and chocolate chip cookies are substitutes. If the price of a donut decreases, the demand for chocolate chip cookies will ________________. A) Decrease, and the demand curve for chocolate chip cookies will shift leftward. B) Increase or decrease, but the demand for donuts will not change C) Not change, but there will be a movement along the demand curve for chocolate chip cookies D) Increase, and the demand curve for chocolate chip cookies will shift rightward
A
For consumers, ski trips and ski jackets are complements. If the price of a ski trip decreases, the demand for ski jackets will _____. A) Increase, and the demand curve for ski jackets will shift rightward B) Increase or decrease, but the demand for ski trips will not change. C) Not change, but there will be a movement along the demand curve for ski jackets D) Decrease, and the demand curve for ski jackets will shift leftward.
A
Milk can be used to produce cheese or butter. If the price of a pound of butter rises, what will happen to the supply of cheese? A) The supply of cheese decreases B) The supply of cheese increases C) The supply of cheese stays the same and there is a decrease in the quantity supplied of cheese. D) The supply of cheese stays the same and there is no change in the quantity supplied of cheese. E) The supply of cheese could increase, decrease, or stay the same depending on what happens to the supply of butter.
A
Suppose vegetable oil is a complement in production of vitamin E. A decrease in the price of vegetable oil will ______ the equilibrium price of vitamin E and ______ the equilibrium quantity of vitamin E. A) Increase; decrease B) Decrease; decrease C) Decrease; increase D) Increase; increase
A
Suppose wheat is a substitute in production of straw. A decrease in the price of wheat will ______ the equilibrium price of straw and ______ the equilibrium quantity of straw. A) Decrease; increase B) Increase; increase C) Increase; decrease D) Decrease; decrease
A
An increase in the demand for hot dogs brings a _______ in the price of a hot dog and _____ in the quantity of hot dogs supplied. A) Fall; an increase B) Rise; an increase C) Rise; a decrease D) Fall; a decrease
B
Bagels and cream cheese are complementary goods. Suppose that the price for flour, which is used to produce bagels, increases. The equilibrium of cheese _______ and the equilibrium quantity of cream cheese _______. A) Falls; increases B) Falls; decreases C) Rises; decreases D) Doesn't change; doesn't change E) Rises; increases
B
Gasoline prices increase by 50% and other things remain the same. As a result, there is: A) No change in the quantity of gasoline demanded B) A decrease in the quantity of gasoline demanded C) A decrease in the demand for gasoline D) An increase in the demand for gasoline E) More information is needed
B
If the price of a cell phone rises, with all other influences on buying plans remains the same, ________. A) The quantity of cell phones demanded increases B) The quantity of cell phones demanded decreases C) The demand for cell phones increases D) The demand for cell phones decreases
B
Suppose leather jackets is a substitute in production of leather belts. An increase in the price of leather jackets will ______ the equilibrium price of leather belts and _____ the equilibrium quantity of leather belts. A) decrease, increase B) increase, decrease C) decrease, decrease D) increase, increase
B
If the price of a printer falls, with all of the other influences on buying plans remains the same __________. A) The demand for printers increases B) The demand for printers decreases C) The quantity of printers demanded increases D) The quantity of printers demanded decreases
C
If we observed a fall in the price of rubber matting and an increase in the quantity of rubber matting that producers sell, the most likely explanation would be that __________. A) The law of demand applies to rubber matting but the law of supply does not B) Firms should produce more rubber matting C) The law of supply apples to rubber matting but some other influence on selling plans has also changed and the supply of rubber matting has increased. D) It is unprofitable to produce rubber matting
C
Betsy graduates from college and her income increases by $35,000. Nothing else changes. Betsy decreases the quantity of ketchup and potato chips that she buys and increases the quantity of gourmet ice cream that she buys. For Betsy, _________. A) Gourmet ice cream and potato chips are normal goods B) Ketchup and potato chips have become complements C) Ketchup and gourmet ice cream have become substitutes D) Gourmet ice cream is a normal good.
D
If both the supply and demand curves shift simultaneously, we can always predict what will happen to: A) Both the price and quantity B) Only the price C) Neither the price or the quantity D) Either the price or the quantity, but not both E) Only the quantity
D
If we observed a rise in the price of vegetable oil and a decrease in the quantity of vegetable oil that producers sell, the most likely explanation would be that ______. A) Firms should produce fewer vegetable oil B) It is unprofitable to produce vegetable oil C) The law of demand applies to vegetable oil but the law of supply doesn't D) The law of supply applies to vegetable oil, but some other influence on selling plans has also changed and the supply of vegetable oil has decreased.
D