Ch 2 HW 2
If the demand for cucumbers falls when the price of tomatoes rises, then we know that tomatoes and cucumbers are:
complements
Tennis rackets and tennis balls are
complements
Washing machines and dryers are
complements
What might cause a demand curve to shift to the right?
An increase in the price of a substitute.
Which of the following is NOT true of a demand curve?
It reflects sellers' reservations prices.
A decrease in the price of pizza will lead to a(n):
increase in the quantity of pizza demanded.
If the demand for steak increases as income increases, then steak is a(n):
normal good
If the demand for a good decreases as income decreases, then the good is a(n):
normal good.
Buyers in the market for CDs learn of a decrease in the price of downloadable MP3s (a substitute for CDs).The demand curve
shifts to the left
Buyers in the market for pizza read a study linking pepperoni consumption to heart disease. The demand curve:
shifts to the left
Buyers in the market for pizza read a study linking pepperoni consumption to high blood pressure. The demand curve
shifts to the left
Buyers in the market for CDs learn of an increase in the price of downloadable MP3s (a substitute for CDs). The demand curve:
shifts to the right
The income of buyers in the market for Adirondack vacations increase. The demand curve:
shifts to the right
The incomes of buyers in the market for generic brand food decreases. The demand curve:
shifts to the right
Cloth diapers and disposable diapers are
substitutes
"All else constant, consumers will purchase more of a good as the price falls." This statement reflects the behavior underlying:
the demand curve.
When the price of a good changes, the amount of that good that buyers wish to buy changes:
because of both the substitution and the income effects.
Ice cream and chocolate are
both
To understand how the price of a good is determined in a free market, one must account for the interests of:
buyers and sellers.
One reason the demand curve slopes ______ is that as prices fall ______.
downward; more people find that the price is now less than their reservation price.
If an increase in the price of good X leads to a decrease in the demand for good Y, then:
good X and good Y are complements.
Shelly purchases a leather purse for $400. One can infer that:
her reservation price was at least $400.
If an increase in income leads to a decrease in the demand for ground beef, then ground beef is a(n):
inferior good.
Buyers in the market for CDs learn of a decrease in the price of CDs. The demand curve
remains unchanged
Buyers in the market for CDs learn of an increase in the price of CDs. The demand curve
remains unchanged
You can spend $10 for lunch and you would like to purchase two cheeseburgers. When you get to the restaurant, you find out the price for cheeseburger has increased from $5 to $6, so you decide to purchase just one cheeseburger. This is best described as:
the income effect of a price change.
The entire group of buyers and sellers of a particular good or service makes up:
the market.
An increase in the quantity of tea demanded occurs if:
the price of the tea falls.
As coffee becomes more expensive, Joe starts drinking tea instead of coffee. This is called:
the substitution effect of a price change.