Econ 203 Quiz 2
What would happen in the market for knee replacement surgery if insurance companies started to cover a smaller portion of the cost of the surgery?
Demand will decrease, but this will not shift the supply curve
How has the growing popularity of factory outlet stores affected the market for clothing at retail department stores?
The demand curve for clothing at retail department stores shifts to the left.
Technological advancements have led to lower prices and an increase in the sale of color laser printers. How does this affect the market for laser printer ink cartridges?
The demand curve for laser printer ink cartridges shifts to the right
How does the decreasing use of DVD players affect the market for prerecorded DVDs?
The demand curve for prerecorded DVDs shifts to the left.
How does the increasing use of digital cameras affect the market for traditional camera film?
The demand curve for traditional camera film shifts to the left.
Assume there is a surplus in the market for hybrid automobiles. Which of the following statements correctly describes this situation?
The price of hybrid automobiles will fall in response to the surplus; as the price falls the quantity demanded will increase and the quantity supplied will decrease.
"Because Coke and Pepsi are substitutes, a decrease in the price of Pepsi will cause the demand for Coke to decrease. This initial shift in demand for Coke results in a lower price for Coke; this lower price will cause the demand curve for Coke to shift to the left." Which of the following correctly comments on this statement?
The statement is false because a change in the price of Coke would not change the demand for Coke.
George Gnat subscribes to a monthly pest control service for his home. Last week the owner of the service informed George that he will have to raise his monthly service fee because of increases in the price of gasoline used by his workers on their service trips. How is the market for pest control services affected by this
There is a decrease in the supply of pest control services.
If, in response to an increase in the price of pineapples, the quantity of pineapples demanded decreases, economists would describe this as
a decrease in quantity demanded.
Which of the following would cause an increase in the equilibrium price and decrease in the equilibrium quantity of watermelon?
a decrease in supply
Farmers can plant either corn or soybeans in their fields. Which of the following would cause the supply of soybeans to increase?
a decrease in the price of corn
A decrease in the price of pork will result in
a smaller quantity of pork supplied
Holding everything else constant, a decrease in the price of GPS systems will result in
an increase in the quantity of GPS systems demanded.
If an increase in income leads to a decrease in the demand for salami, then salami is
an inferior good
If a decrease in income leads to an increase in the demand for macaroni, then macaroni is
an inferior good.
The market for smartwatches is becoming very competitive. The increase in competition in this market is an example of how the market responds to
changes in consumer tastes.
A change in which variable will change the market demand for a product?
expected future prices
The ________ effect of a price change refers to the impact of a change in the price of a good on a consumer's purchasing power.
income
If smartwatches are considered substitutes for smartphones, the increase in the price of smartwatches would, all else equal,
increase the demand for smartphones.
The income effect of a price change results in a
movement along the demand curve due to a change in purchasing power brought about by the price change.
Because new plastic and recycled plastic are substitutes, as the price of newly produced plastic increases,
the demand curve for recycled plastic shifts to the right.
Assume that the hourly price for the services of personal trainers has risen and sales of these services have also risen. One can conclude that
the demand for personal trainers has increased.
Suppose a drought resulted in a major reduction in the California lettuce crop. In the market for lettuce,
the supply curve shifted to the left resulting in an increase in the equilibrium price.
According to a recent study, "Stricter college alcohol policies, such as raising the price of alcohol, or banning alcohol on campus, decrease the number of students who use marijuana." On the basis of this information, how would you describe alcohol and marijuana?
the two goods are complements in consumption.
Apple's decision in 2002 to focus on developing a smartphone rather than a tablet computer exemplifies the
trade-off that firms face due to limited resources.