MICRO CHAPTER 3 QUIZ
Blank DVDs and prerecorded DVDs are substitutes in production. An increase in the price of a blank DVD will lead to
A decrease in the supply of prerecorded DVD
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 substitution effect
normal goods
a good for which demand increases with an increase in consumer income
Which of the following results in a movement along the supply curve of spinach but does not shift the supply curve of spinach?
a rise in the price of spinach
When the demand for a good decreases, its equilibrium price _____ and equilibrium quantity
falls; decreases
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
The opportunity cost of a hot dog in terms of hamburgers is the
ratio of the money price of a hot dog to the money price of a hamburger.
When the price of a pizza decreases from $14 to $12
the income effect points out that the total purchasing power of people who buy pizza increases.
which of the following increases the demand for a normal good
the price of a good is expected to increase in the future
relative price
the ratio of one price to another
Scarcity guarantees that
wants will exceed demands.
The price of a DVD rental is $1.50 and the price of a downloaded movie is $1.00. If the price of a DVD rental increases by $0.50, the relative price a downloaded movie
will rise