ECON QUiZ 2.1, 2.2, 2.3

(Figure: Graph) Refer to the graph to answer the question. An increase in the price of an item will cause the movement from: point W to point V. point Q to point P. point N to point M. point Q to point T.

N to M

Demand curves slope downward due to: the positive relationship between price and quantity demanded. buyers' perceptions that a fall in price means a fall in quality. the law of demand. stores lowering their prices.

the law of demand

After a while, Angela gets sick of eating the bitter chocolate and decides to cut back on dark chocolate and enjoy white chocolate more. What happens as a result of Angela's decision? Select all of the correct answers. Angela's individual demand for white chocolate increases. Vanessa's individual demand for dark chocolate increases to compensate for Angela's decreased demand. Angela's individual demand for dark chocolate decreases. The market demand for dark chocolate will decrease.

- Angela's individual demand for white chocolate increases. - Angela's individual demand for dark chocolate decreases. - The market demand for dark chocolate will decrease.

Which of these scenarios depicts a rational buyer? Mary values a bag of salad at $2, but she buys the bag of salad even when the price is $4. John walks into a grocery store and purchases monthly groceries without paying attention to the prices of groceries. Darwin buys a can of shoe polish at $4.50 when his marginal benefit from it is $3.75. Damien buys a sandwich for $5 when the marginal benefit of the sandwich to him is $7.

Damien buys a sandwich for $5 when the marginal benefit of the sandwich to him is $7.

Consumer surplus is equal to the difference between:

the maximum price a buyer is willing to pay and the market price.

Consumer surplus is shown graphically as the area:

under the demand curve and above the market price.

On a hot sweltering day, you feel thirsty and buy an ice-cold soft drink, which you gulp down. Whether you buy a second drink or not will depend on: how you feel about soft drinks. the total quantity of soft drinks you have consumed that week. the price of the soft drink. whether the marginal benefit of the second soft drink exceeds the price of the drink.

whether the marginal benefit of the second soft drink exceeds the price of the drink.

A downward-sloping demand curve implies: an inverse relationship between price and quantity demanded. a positive relationship between price and quantity demanded. no relationship between price and quantity demanded. that buyers are willing to buy less when prices fall.

an inverse relationship between price and quantity demanded.

(Figure: Graph) Refer to the graph to answer the question. In the graph, the movement from point W to point P represents a(n):

decrease in demand

Diminishing marginal benefit: does not affect a buyer's decision. is seen in the upward slope of a supply curve. is seen in the downward slope of a demand curve. means that consumers are willing to pay more for additional units of an item.

is seen in the downward slope of demand curve.

The relationship between price expectations and current demand is: negative; when future prices are expected to rise, current demand falls. negative; when future prices are expected to fall, current demand rises. positive; when future prices are expected to rise, current demand rises. positive; future prices are generally expected to rise.

positive; when future prices are expected to rise, current demand rises.

An individual demand curve is a graph that plots the: quantity of an item that someone plans to buy at each price. quantity of an item that someone plans to buy at a particular price. quantity of an item that a seller plans to sell at each price. market price of a product at different points in time.

quantity of an item that someone plans to buy at each price.

The buyers of a good will want to purchase it as long as their willingness to pay for the good is

greater than or equal to the price

The table shows the monthly individual demand schedules of four students for soda. What is the total monthly market demand for soda at $2 per can?

125 Cans

Consider the table below. Assuming the law of demand holds, the cell labeled "?" could be which of the following quantities? Price of a movie Quantity of movies Demanded $15 163 $17 ?

151 The table shows that buyers want to purchase 163163 movies when the price is $15. The amount buyers want to purchase is missing for $17. Because $17 is higher than $15, the law of demand tells us that the amount of movies buyers want to purchase at $17 must be less than 163163. Therefore, the only correct choice is 151151 movies.

Match the statements to the appropriate category. Each category will contain two statements and each statement is used only once. Assume that pens are a normal good and that apples and oranges are substitute goods. Change in quantity demanded: Change in demand: The price of pens decreases, so Annie buys more pens. Since Annie got a raise, she buys more pens. The price of oranges rises but the price of apples does not change. Therefore, Billy buys more apples. If the price of apples changes, Billy will change how many apples he buys.

Change in quantity demanded: The price of pens decreases, so Annie buys more pens. If the price of apples changes, Billy will change how many apples he buys. Change in demand: Since Annie got a raise, she buys more pens. The price of oranges rises but the price of apples does not change. Therefore, Billy buys more apples.

Which statement BEST illustrates the law of demand? An increase in food prices encourages more individuals to buy more food, owing to scarcity. Consumers buy more iPhones because prices have fallen. Tesla produces more cars as prices increase. Fewer people visit Disneyland because incomes have fallen.

Consumers buy more iPhones because prices have fallen.

The accompanying table contains the individual demand schedules of dark chocolate for Vanessa and Angela. Assuming they are the only people in the market for dark chocolate, place each of their individual demand curves and the market demand curve at the correct locations on the accompanying graph. GRAPH: $8 1 3 $1 3 5

PICTURE

People buy more of a good when the price falls. There are several theoretical explanations for this behavior. Match the explanation for why people buy more at lower prices with the proper term. You are currently in a sorting module. Turn off browse mode or quick nav, Tab to items, Space or Enter to pick up, Tab to move, Space or Enter to drop. Substitution effect Income effect Total effect An increase in quantity demands attributable to the combination of the income and substitution effect. An increase in quantity demands that are attributable to changes in purchasing power as the price of a good falls An increase in quantity demands that comes from consumers having a greater incentive to buy a good whose price is relatively lower.

Substitution effect: An increase in quantity demands that comes from consumers having a greater incentive to buy a good whose price is relatively lower. Income effect: An increase in quantity demands that are attributable to changes in purchasing power as the price of a good falls. Total effect: An increase in quantity demands attributable to the combination of the income and substitution effect.

If Tesla cars become less expensive, what will happen in the market for other electric cars? The quantity demanded of Teslas will fall. The demand for other electric cars will fall. The demand for other electric cars will rise. The quantity demanded of Teslas will not change.

The demand for other electric cars will fall.

You are the manager of Frito-Lay's Cheese Puffs account, and you notice that when the price of Cheetos increases, there is an increase in demand for Cheese Puffs. What is the economic relationship between these goods that explains this behavior? The increase in the price of Cheetos causes a decrease in the demand for Cheetos; therefore, these goods are substitutes. The increase in the price of Cheetos causes an increase in the demand for Cheese Puffs; therefore, these goods are substitutes. The increase in the price of Cheetos causes an increase in the demand for Cheese Puffs; therefore, these goods are complements. The increase in the price of Cheetos causes a decrease in the demand for Cheese Puffs; therefore. these goods are complements.

The increase in the price of Cheetos causes an increase in the demand for Cheese Puffs; therefore, these goods are substitutes.

(Figure: Graph) Refer to the graph to answer the question.

The movement from point M to point N represents a(n):

Which of these is NOT a demand shifter? the price of a substitute good the price of a complementary good the number of buyers in the market the price of the product

The price of the product

The law of demand says that, holding everything else constant, when the price of a good increases, the amount buyers buy will decrease, and when the price of a good decreases, the amount buyers buy will increase. To hold everything else constant means to use the ceteris paribus condition. If we change one of these things we were holding constant, which is the most likely result? consumers will not change their purchasing behaviors demand for the good will either increase or decrease a price ceiling will need to be implemented producers will not know how much of a good to make

demand for the good will either increase or decrease

The Rational Rule for Buyers: entails that buyers compare the total benefit of all units of an item to the total cost of all units purchased. entails that buyers compare the benefit of buying an additional unit of an item to the cost of that item. only applies to buyers who are buying necessities as opposed to luxuries. entails that buyers compare the cost of production of an item to the price of the item.

entails that buyers compare the benefit of buying an additional unit of an item to the cost of that item.

A normal good is a good: for which higher income causes an increase in demand. that is normally purchased by many consumers. that is only purchased by high-income consumers. for which higher income causes a decrease in demand.

for which higher income causes an increase in demand.