Microeconomics Chapter 2: Demand

Dental services are: a normal good. expenses that do not change with income. an inferior good. a natural good.

a normal good.

In a typical week, Cheyenne buys four lattes at Starbucks. If the price of lattes doubles, what is the MOST likely number of lattes she will buy?two five eight four

two

You're a management consultant hired by Sunco Lighting, Inc., to estimate the demand for high-efficiency LED light bulbs. The table shows the results of a survey you conducted of four representative consumers in a market of 40,000 consumers overall. You asked the four buyers how many high-efficiency LED light bulbs they would buy in a year at different prices. What market quantity demanded would you project, based on these data, at a price of $7 per bulb? 1,100 2,400 240,000 960,000

240,000

The demand curve for meals at a local Chick-fil-A will shift to the left if: Chick-fil-A offers a free sandwich to people who sign up for their new rewards app .the price of a meal at Chick-fil-A rises. incomes increase, and Chick-fil-A meals are a normal good. the price of gasoline falls in the area.

Chick-fil-A offers a free sandwich to people who sign up for their new rewards app.

Which statement BEST illustrates the law of demand?

Consumers buy more iPhones because prices have fallen.

Which of these scenarios depicts a rational buyer? Mary values a bag of salad at $2, but she buys the bag of salad even when the price is $4. John walks into a grocery store and purchases monthly groceries without paying attention to the prices of groceries. Darwin buys a can of shoe polish at $4.50 when his marginal benefit from it is $3.75. Damien buys a sandwich for $5 when the marginal benefit of the sandwich to him is $7.

Damien buys a sandwich for $5 when the marginal benefit of the sandwich to him is $7.

Figure: Four sample demands) A hotel in Cape Cod, Massachusetts, is completely booked during August. However, in September, tourism drops significantly, and some hotel rooms remain empty. Which of the graphs depicts this scenario? Graph A Graph B Graph C Graph D

Graph A

(Figure: Netflix subscriptions) The graph represents monthly Netflix subscriptions. If Hulu, another streaming service, raises its price, what is MOST likely to happen to the demand curve for Netflix?

a shift from Old demand to New demand 1

Why might you underestimate the increase in market quantity demanded when you lower your price? You may not take into account potential new customers attracted by the lower price. Some of your current customers may switch to a rival's product, so a drop in price doesn't produce any additional sales. Lowering the price only increases the quantity demanded for inferior goods. A price reduction increases the quantity demanded for individuals but not for the entire market.

You may not take into account potential new customers attracted by the lower price.

You're the manager of an independent coffee bar with a loyal customer base, and you have accurate information about your current customers' demand curves. You lower the price on your lattes, but the new total quantity demanded for your lattes far exceeds your estimate. What is the MOST likely explanation? You neglected to factor in new customers entering your market due to the lower price. In response to your move, your competitors lowered their prices to remain competitive. Incomes have fallen, and your latte is a normal good. The price of bubble tea, which many of your customers see as a substitute for lattes, fell.

You neglected to factor in new customers entering your market due to the lower price.

Antonio has a cell phone, and his service provider is AT&T. When he calls his wife, Erika, who is also an AT&T customer, he does not have to pay for those minutes. The more AT&T customers there are in the market, the greater the benefit Antonio receives. This is: a network effect. the Coase theorem. a Pigouvian subsidy. a technology spillover.

a network effect.

Shifts in the market demand curve occur: because of all the factors that shift individual demand curves, along with changes in the types and number of buyers. only because of changes in income and preferences, along with changes in the types and number of buyers. only because of changes in the types and number of buyers. only because of the same factors that shift individual demand curves.

because of all the factors that shift individual demand curves, along with changes in the types and number of buyers.

If the price of paint rises, we can expect the: quantity of paint demanded to increase. demand for paintbrushes to decrease. demand for paintbrushes to increase. quantity of paintbrushes demanded to remain unchanged.

demand for paintbrushes to decrease.

Over the past several years, sushi has become increasingly popular among consumers. This means that the _____ has _____. quantity of sushi demanded; increased demand for sushi; decreased demand for sushi; increased quantity of sushi demanded; decreased

demand for sushi; increased

Facebook is subject to network effects because: its value to an individual declines when the number of other people using it increases .its value is determined only by its marginal private benefit .its value to an individual increases when the number of other people using it increases. it yields negative externalities.

its value to an individual increases when the number of other people using it increases.

(Figure: Graph) Refer to the graph to answer the question. A decrease in the price of an item will cause the movement from: point P to point W. point N to point M. point T to point P. point Q to point P.

point Q to point P.

Which of these items is a normal good? canned food instant noodles steak third-hand cars

steak

Recent research suggests that certain refillable plastic water bottles may leech cancer-causing particles into the containers with repeated usage. As a result of this research being made public, one would expect: the demand for such containers to decrease .the quantity demanded of such containers to increase. no effect. the price of the containers to change because of a movement along the demand curve.

the demand for such containers to decrease.

(Figure: Leo's marginal benefit) The graph depicts Leo's marginal benefit curve for ride-shares per week. If the price is $4, how many rides will he order this week? two rides three rides four rides five rides

three rides

On a hot sweltering day, you feel thirsty and buy an ice-cold soft drink, which you gulp down. Whether you buy a second drink or not will depend on: how you feel about soft drinks. the total quantity of soft drinks you have consumed that week. the price of the soft drink. whether the marginal benefit of the second soft drink exceeds the price of the drink.

whether the marginal benefit of the second soft drink exceeds the price of the drink.