Economics Quiz 2
In the figure, what is the minimum supply price for the fourth gallon of ice cream?
$5.00
The figure illustrates the market for pens. The equilibrium quantity is
500 pens a month
The price of cereal rises. As a result, people have cereal for breakfast on fewer days and eat eggs instead. This behavior is an example of
A decrease in the quantity demanded of cereal because of the situation effect
Kelly graduates and her income increases by $25,000 a year. Other things remaining the same, she increases the quantity of clothes she buys. For Kelly, clothes are _____.
A normal good
Which of the following does NOT shift the demand curve for broccoli?
An increase in the cost of fertilizer used to grow broccoli
Which of the following is consistent with the law of demand?
An increase in the price of a soda causes a decrease in the quantity of soda demanded.
Oatmeal is a normal good and cold cereal is a substitute for oatmeal. Raisins are a complement for oatmeal. Which of the following increases the demand for oatmeal?
An increase in the price of cold cereal
For a "change in the quantity supplied" but not "a change in supply" to occur, there must be a
Both answers B and C are correct.
What happens to the demand for Xbox games if the price of an Xbox falls?
The demand for Xboxes increases because the price of a complement falls.
Which of the following increases the demand for a normal good?
The price of the good is expected to increase in the future.
If a market is NOT in equilibrium, then which of the following is likely to occur?
The price will adjust to bring the market to equilibrium.
People come to expect that the price of a gallon of gasoline will rise next week. As a result,
Today's demand for gasoline increases
When income increases, the demand curve for product X shifts rightward and the demand curve for product Y shifts leftward. These shifts mean that
X is a normal good and Y is an inferior good.
It is expected that the price of a bushel of wheat will increase in one month. This belief will result in
a decrease in current supply of wheat
Which of the following shifts the demand curve for oranges?
a decrease in the price of a pound of bananas, a substitute in consumption for oranges.
Which of the following shifts the supply curve for gasoline rightward?
a decrease in the price of a resource used to produce gasoline, such as crude oil
Consider the figure showing supply curves for soft drinks. Suppose the economy is at point a. A movement to point c could be the result of
a decrease in the relative price of a soft drink.
A changes in which of the following shifts the demand curve for hamburgers
a fall in the price of french fries, a complement for hamburgers
A price below the equilibrium price results in
a shortage.
At a price of $10 in the figure, there is
a surplus of 400 units
Which of the following decreases the demand for an inferior good?
an increase in income
Jeep Cherokees are a normal good. If people's incomes increase, the direct result will be
an increase in the demand for the vehicles.
The "income effect" in the market for aspirin means that
an increase in the price of aspirin will reduce the total purchasing power of aspirin takers, making them able to afford fewer aspirin.
In the market for magazines, the "income effect" means that
an increase in the price of magazines will reduce the total purchasing power of magazine readers, making them able to afford fewer magazines.
Changes in which of the following items will shift the supply curve of hamburgers?
an increase in the price of meat used to produce hamburgers
Consider the figure showing supply curves for soft drinks. Suppose the economy is at point a. A movement to point d would be the result of
an increase in the relative price of a soft drink
An increase in technology for producing personal computers leads to
an increase in the supply of personal computers.
When the price of an inferior good falls, the substitution effect leads to ________ in the quantity purchased and the income effect leads to ________ in the quantity purchased.
an increase; a decrease
When the price of a normal good falls, the substitute effects lead to ______ in the quantity purchased and the income effect leads to _______ in the quantity purchased.
an increase; an increase
When economists speak of preferences as influencing demand, they are referring to
an individual's attitudes toward goods and services.
The Law of demand implies that, other things remaining the same,
as the price of a cheeseburger rises, the quantity of cheeseburgers demand will decrease.
If consumers' incomes increase and the demand for the bus rides decrease
bus rides are an inferior good.
Which of the following pairs of goods are most likely substitutes?
cola and lemon lime soda
Suppose people buy more of good 1 when the price of good 2 falls. These goods are
complements
The observation that the demand curve for grape jelly shifts rightward every time the price of peanut butter falls means that grape jelly and peanut butter are
complements
The quantity demanded of a good or service is the amount that
consumers plan to buy during a given time period at a given price.
Ham and eggs are complements. If the price of ham rises, the demand for eggs will
decrease and the demand curve for eggs will shift leftward.
A severe drought has damaged this year's lettuce crop. The initial effect on the lettuce market is a
decrease in the supply of lettuce.
If macaroni and cheese is an inferior good, an increase in income will
decrease the demand for macaroni and cheese
A decrease in the expected future price of cars
decreases the current demand of cars, that is, there is a leftward shift of the demand curve for cars
The figure represents the market for oil. Because of the development of a new deep sea drilling technology the
demand curve does not shift, and the supply curve shifts from S1 to S2
If income increases or the price of a complement falls, the
demand curve for a normal good shifts rightward
A decrease in the price of a game of bowling shifts the
demand curve for bowling balls rightward.
The figure represents the market for french fries at fast food joints. If the price of potatoes rises and simultaneously people become concerned that french fries can cause heart attacks the
demand curve for french fries shifts from D2 to D1 and the supply curve of french fries shifts from S2 to S1
An unusually warm winter shifts the
demand curve for gloves leftward
The figure represents the market for candy. People become more concerned that eating candy causes them to gain weight, which they do not like. As a result, the
demand curve shifts from D2 to D1 and the supply curve does not shift.
Students can rent a Blu-ray movie at Campus Video for $4. As the price of Blu-Ray players fall, the
demand for Blu-ray movies will increase
A change in the price of a good
does not shift the good's demand curve but does cause a movement along it.
When the price is below the equilibrium price, the quantity demanded
exceeds the equilibrium quantity but the quantity supplied is less than the equilibrium quantity.
In the figure, which movement reflects a decrease in demand?
from point a to point c
In the figure, which movement reflects a decrease in population?
from point a to point c
In the figure, which movement reflects an increase in income if fruit snacks are an inferior good?
from point a to point c
In the figure, which movement reflects an increase in income if fruit snacks are a normal good?
from point a to point d
In the figure, which movement reflects an increase in demand?
from point a to point d
In the figure, which movement reflects a decrease in quantity demanded but NOT a decrease in demand?
from point a to point e
Because of increasing marginal cost, most supply curves
have a positive slope
Inferior goods are those for which demand increases as
income decreases
Which of the following losts has variables that all shift a demand curve?
income, preferences,number of buyers, prices of complementary good
An increase the expected future price of a good
increases its demand
An increase in the number of fast-food restaurants
increases the supply of fast-food meals
Which of the following explains why supply curves slope upward
increasing marginal cost
The quantity demanded of a good or service is the quantity that a consumer
is willing to buy at a particular price during a given time period.
The quantity supplied of a good or service is the quantity that a producer ________ at a particular price during a given time period.
is willing to sell
If the price of a video download is below its equilibrium price, the quantity supplied is ________ than the quantity demanded. If the price of a video download is above its equilibrium price, the quantity supplied is ________ than the quantity demanded
less; greater
The "law of supply" states that, other things remaining the same, firms produce
more of a good the higher its price
The "law of demand" is illustrated by a
movement along the demand curve.
If the price of a CD is equal to the equilibrium price, there will be ________ of CDs and the price will ________.
neither a shortage nor surplus; not change
In the figure, an increase in the supply of oil would result in a movement from
point a to point b.
Consider the figure showing supply curves for soft drinks. Suppose the economy is at point a. A decrease in the price of sugar used to make soft drinks is shown as a movement from point a to a point such as
point b
Consider the figure showing supply curves for soft drinks. Suppose the economy is at point a. An increase in the price of a soft drink is shown as a movement from point a to
point d
In a supply and demand figure, the equilibrium price and quantity are found at the
point where quantity supplied equals quantity demanded
The quantity supplied of a good or service is the amount that
producers plan to sell during time period at a given price
As the price of a pound of peanuts falls, the
quantity of peanuts supplied decreases.
When graphing a demand curve for corn, we are showing the relationship between the quantity demanded of corn and the
relative price of corn
By itself, an increase in the number of suppliers in a market results in a
rightward shift in the supply curve.
The law of demand implies that demand curves
slope down.
People buy more of good 1 when the price of good 2 rises. These goods are
substitutes
If a producer can use resources to produce either good A or good B, then A and B are
substitutes in production.
Which of the following explains why demand curves slope downward?
substitution effect and income effect
When the price of a pizza decreases from $12 to $10, it is definitely the case that the
substitution effect means people buy more pizza.
Good A and good B are substitutes in production. The demand for good A increases so that the price of good A rises. The increase in the price of good A shifts the
supply curve of good B leftward
A substitute is a good
that can be used in place of another good
The quantity supplied of a good is
the amount that the producers are planning to sell at a particular price during, a given time period
if income decreases or the price of a complement rises,
the demand curve for a normal good shifts leftward
In the figure, if the demand curve is D2, then
the equilibrium price will be P1 and the equilibrium quantity will be Q2
Each point on the demand curve reflects
the highest price consumers are willing and able to pay for that particular unit of a good.
When the price of a pizza decreases from $14 to $12,
the income effect points out the total purchasing power of people who buy pizza increases.
A fall in the price of a good causes producers to reduce the quantity of the good they are willing to produce. This fact illustrates
the law of supply
Each point on a supply curve represents
the lowest price for which a supplier can profitably sell another unit.
Which of the following influences people's buying plans and does not shift the demand curve?
the price of the good
Which of the following is NOT held constant while moving along a supply curve?
the price of the good itself
The "law or demand" states that changes in
the quantity demanded of a good are inversely related to changes in its price
Apples are a normal good, so if the price of an apple increases from 50cents¢ to 60cents¢, the quantity of apples demanded decrease because of
the substitution and income effects
A bakery can produce either cakes or cookies. If the price of cookies rises, then
the supply curve of cake shifts leftward.
A change in which of the following shifts the demand curve
the tastes and preference of consumers
The quantity of iPads that people plan to buy this month depends on all of the following EXCEPT the
the technology used to produce an iPad.
The "law of demand" refers to the fact that, all other things remaining the same, when the price of a good rises
there is a movement up along the demand curve to a smaller quantity demanded.
At a price of $4 in the figure,
there is a shortage of 200 units.
When a market is in equilibrium,
there is no shortage and no surplus at the equilibrium price.
A complement is a good
used in conjunction with another good.