Microeconomics Chapter 17.

A change in demand is a departure from demand schedule.

A move from D1 to D2

Which of the following causes a change in supply? A) Changes in consumer income B) Changes in tastes and preferences C) Changes in the cost of production D) Changes in demand

A) Changes in consumer income

Statement I. Market demand is the same as individual demand. Statement II. Market demand is the horizontal summation of individual demand schedules. A) Statement I is true and statement II is false. B) Statement II is true and statement I is false. C) Both statements are true. D) Both statements are false.

A) Statement I is true and statement II is false.

Statement I. Most goods are normal goods. Statement II. The demand for inferior goods varies directly with income. A) Statement I is true and statement II is false. B) Statement II is true and statement I is false. C) Both statements are true. D) Both statements are false.

A) Statement I is true and statement II is false.

Suppose the price of gasoline rises $2 per gallon. What effect would this have on fruits and vegetables at the grocery store? A) The quantity demanded of fruits and vegetables would rise. B) The demand for fruits and vegetables would rise. C) The supply of fruits and vegetables would fall. D) There would be no effect on fruits and vegetables.

A) The quantity demanded of fruits and vegetables would rise.

Suppose we move from point X on a demand curve to point W on that same curve. There has been A) a change in demand. B) a change in the quantity demanded. C) an increase in demand. D) a decrease in demand.

A) a change in demand.

An increase in demand is depicted as A) a movement rightward, down the existing demand curve. B) a rightward shift of the demand curve. C) a change in the slope of an existing demand curve. D) a movement leftward, up the existing demand curve.

A) a movement rightward, down the existing demand curve.

As the price of a good declines, the prices of substitute goods will _____ and the prices of complementary goods will ______. A) rise; rise B) fall; fall C) rise; fall D) fall; rise

A) rise; rise

In a graph of market demand and supply curves, prices above equilibrium cause ____, and prices below equilibrium cause ______. A) shortages; shortages B) surpluses; surpluses C) shortages; surpluses D) surpluses; shortages

A) shortages; shortages

Changes in demand are caused by each of the following except changes in A) the price of the product. B) the prices of related goods and services. C) income. D) tastes and preferences.

A) the price of the product.

If you really want to sell something on eBay and there are no bidders, it is likely that A) there is no supply. B) the price is too low and people sense it is "cheap." C) the price is above equilibrium.

A) there is no supply.

Technological advances will

Increase supply

The main reason for changes in supply

Is changes in the cost of production

Staying on the same demand curve means

Change in quantity demanded.

If people fly, prices of hotels will increase.

Complimentary