Econ 2302

Cindy runs Cindy's Cupcake Shop. She has decided to charge $3 for a gourmet cupcake. She knows the individual demand schedules (shown below) for five of her customers. What is the market demand that Cindy will face for her five customers, if she charges $3 a cupcake? Demand by Customer (Quantity of Cupcakes)

21 cupcakes

The price of coffee, a substitute to tea, decreases. How will this affect the market for tea?

The demand curve will shift to the left.

The price of tents, a complement to sleeping bags, increases. How will this affect the market for sleeping bags?

The demand curve will shift to the left.

Which of the following is a determinant of demand in the market for laptop computers?

The price of desktop computers, a substitute in consumption for laptops.

A market is:

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

The demand schedule represents the relationship between the prices of a good, service, or resource:

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

The price of a of a good is one of the nonprice determinants of its demand. (Enter one word in the blank)

complement or substitute

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 demand ( ) (one word).

curve or schedule

When you plot the data from the demand schedule on a graph, the result is called the demand ( ).

curve, line, or function

The price of carpeting has decreased. As a result demand for hardwood floors, a substitute for carpeting, will ( ) .

decrease, fall, or shift to the left

Market ( ) is based on the overall preferences of consumers in the market.

demand

The ( ) ( ) represents 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, in a tabular form. (Enter one word in each blank.)

demand schedule

When the price of a related good, such as a substitute or a complement, changes:

demand can increase or decrease.

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:

demand curve.

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:

demand schedule.

Prices of related goods, complements and substitutes, are:

determinants of demand.

The horizontal summation of individual demand curves:

gives the market demand curve.

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

good or goods

A tangible product that consumers, firms, or governments wish to purchase is a:

good.

The overall or total demand for a good, service, or resource is called ( ) (one word) demand.

market

Any place where, or mechanism by which, buyers and sellers interact to trade goods, services, or resources is a called a(n):

market.

A good for which there is a direct relationship between the demand for the good and income is a(n) ( ) good. (Enter one word in the blank.)

normal

For ( ) goods, an increase in income increases demand and a decrease in income decreases demand. (Enter one word in the blank.)

normal

When we talk about the demand for sunglasses, we are referring to the:

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

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

service

An intangible product that consumers wish to purchase is a:

service.

The demand curve shifts when:

something other than the price of a good changes.

When considering how changes in tastes and preferences or demographics affect demand, we tend to evaluate:

the entire market.

Other things held constant, the demand curve will shift when:

the nonprice determinants of demand change.

Select all that apply The demand curve for a normal good is downward sloping because

when consumers purchase substitutes, the quantity demanded of the good falls. as prices rise, the purchasing power of each dollar earned falls, and consumers are willing and able to buy less of a good. the benefit of consuming more of a good falls with each additional unit, so the price consumers are willing and able to pay also falls with increased consumption.

The income effect, the substitution effect, and diminishing marginal utility together explain:

why demand curves are downward-sloping.