eco 2.1-2.7

Which of the following could cause an increase in the demand for peanut butter?

An increase in consumer incomes (if peanut butter is a normal good)Correct An increase in the expected future price of peanut butter An increase in the number of buyers in the market

Which of the following could cause a decrease in the demand for jelly?

An increase in the price of peanut butter (if peanut butter and jelly are complements) A news report that jelly is hazardous

Pizza and sub sandwiches are substitutes. If the price of pizza decreases, this will cause:

a decrease in demand -- a leftward shift of the demand curve -- for sub sandwiches

Consider the market for cars. Which determinant of demand is affected by each of the following events? a. Environmentalists launch a successful One Family, One Car campaign b. A baby boom occurred 16 years ago c. Layoffs increase as the economy sheds millions of jobs d. An oil shortage causes the price of gasoline to soar e. The government offers tax rebates in return for the purchase of commuter rail tickets f. The government announces a massive plan to bail out the auto industry and subsidize production costs

a. Consumer preferences b. Number of buyers c. Incomes d. Prices of related goods e. Prices of related goods f. Expectations

Consider the market for apartments. Graphically illustrate the impact on equilibrium price and quantity for each of the following scenarios. a. More people prefer to rent apartments rather than buy houses. b. Five new apartment complexes open.

a. increase equilibrium quantity and increase equilibrium price. b. increase equilibrium quantity and decrease equilibrium price.

When a non-price factor changes—such as income, expectations, prices of related goods, consumer preferences, or the number of buyers, there is a change in

demand and the entire curve shifts.

French fries and ketchup are complements. If the American Heart Association announces that eating French fries increases the risk of stroke, this will cause:

demand for ketchup to decrease -- a leftward shift of the demand curve for ketchup

Suppose an economic boom causes incomes to increase. This will cause the

demand for smart phones to increase, and both the price of smart phones and the quantity of smart phones traded would rise.

Suppose that there is an increase in demand for this type of housing. Does demand shift inward or outward? At the original equilibrium price does this lead to a surplus or shortage?

outward (right); shortage

When there is a change in the specific numerical quantity demanded due to a change in price this is referred to as a change in:

quantity demanded and the demand curve does not shift.