31) To ind the market demand curve for in-line skates, we must
A) add the quantities demanded at every price and every income by every buyer of in-line
skates.
B) add the quantities demanded at prices that all buyers can aford to pay.
C) sum horizontally the individual demand curves of all the buyers.
D) take account of the skate buying plans of all actual and potential buyers in all possible
situations.
E) None of the above answers is correct because we need also to take account of the supply
of in-line skates.
Skill: Level 1: Deinition
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
32) The phrase “a change in demand” most directly implies a
A) movement along a demand curve.
B) movement along the price curve.
C) change in the quantity demanded of a good.
D) shift of the demand curve.
E) movement along the quantity curve.
Skill: Level 1: Deinition
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
33) When demand increases,
A) consumers are willing to buy more at any price.
B) consumers buy more of the good only if its price falls.
C) the price is lower at any level of quantity demanded.
D) consumers buy more of the good only if its price rises.
E) the demand curve shifts leftward.
Skill: Level 2: Using deinitions
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
11
34) A change in the demand for apples could result from any of the following EXCEPT
A) a change in the number of buyers.
B) increased preferences for fresh fruit consumption for health reasons.
C) a change in the price of an apple.
D) a change in the price of a banana.
E) a change in income.
Skill: Level 2: Using deinitions
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
35) Changes in which of the following factors do NOT shift the demand curve?
A) the price of the good
B) buyers’ incomes
C) the price of a substitute good
D) the number of buyers
E) the price expected in the future
Skill: Level 2: Using deinitions
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
36) If the demand for used cars decreases after the price of a new car falls, used cars and
new cars are
A) inferior goods.
B) substitute goods.
C) complementary goods.
D) normal goods.
E) The questions errs because it is the quantity of used cars, NOT the demand for used
cars, that will change when the price of a new car falls.
Skill: Level 2: Using deinitions
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
12
37) Consumers regard Dell computers and Apple computers as substitutes. If the price of a
Dell computer decreases, the
A) demand for Dell computers increases.
B) demand for Apple computers increases.
C) demand for Apple computers decreases.
D) supply of Dell computers increases.
E) demand for Dell computers decreases.
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
38) Which of the following increases the demand for a good or service?
A) a fall in the price of the good or service
B) a smaller number of consumers wanting to buy the good or service
C) a rise in the price of the good or service
D) a rise in the price of a substitute good or service
E) a rise in the price of a complement
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
39) Consider the market for smart phones. Which of the following shifts the demand curve
rightward?
A) an increase in the price of smart phones
B) a decrease in the price of smart phones
C) an increase in the price of land-line phone service, a substitute for smart phones
D) a decrease in the number of smart phone buyers
E) an increase in the supply of smart phones
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
13
40) A decrease in the price of driver liability insurance will ________ the ________ for new
automobiles.
A) increase; demand
B) increase; supply
C) decrease; demand
D) decrease; supply
E) None of the above is correct.
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: New
AACSB: Relective thinking
41) A reduction in the cost of cable TV subscriptions will ________ the ________ for
televisions.
A) increase; supply
B) increase; demand
C) decrease; supply
D) decrease; demand
E) None of the above is correct.
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: New
AACSB: Relective thinking
42) Which of the following shifts the demand curve for movies rightward?
A) an increase in the price of NetFlix, a substitute for movies
B) an increase in the price of movie tickets
C) a decrease in the price of move tickets
D) an increase in movie star salaries
E) an increase in the price of HDTV sets
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
14
43) Which of the following shifts the demand curve for movies leftward?
A) a decrease in the price of NetFlix, a substitute for movies
B) a decrease in the price of movie tickets
C) an increase in the price of movie tickets
D) an increase in movie star salaries
E) an increase in incomes, assuming movies are a normal good
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
44) Two brands of water, Natural Water and Mountain Water, are close substitutes. If the
price of Mountain Water decreases, the fall in price
A) shifts the demand curve for Natural Water rightward.
B) shifts the demand curve for Natural Water leftward.
C) increases the price of Natural Water.
D) increases the demand for Mountain Water.
E) More information is needed to determine if the demand curve for Natural Water shifts
rightward or leftward.
Skill: Level 4: Applying models
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
45) Car insurance and cars are complements. If the price of car insurance increases, the
A) demand for cars decreases.
B) demand for cars increases.
C) quantity of cars demanded decreases.
D) quantity of cars demanded increases.
E) More information is needed to determine if the demand increases or decreases.
Skill: Level 2: Using deinitions
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
15
46) Consumers eat salsa with taco chips. The price of salsa rises. How does the increase in
the price of salsa afect the demand for taco chips?
A) It decreases the demand for taco chips.
B) It increases the demand for taco chips.
C) It has no efect on the demand for taco chips.
D) It will decrease the demand for taco chips only if taco chips are a normal good.
E) It could increase, decrease, or have no efect on the demand for taco chips, but more
information is needed to determine the impact.
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
47) What happens to the demand for a good if a complement’s price increases?
A) The demand decreases and the demand curve shifts rightward.
B) The demand increases and the demand curve shifts rightward.
C) The demand decreases and the demand curve shifts leftward.
D) The demand increases and the demand curve shifts leftward.
E) There is no impact on demand for the good and the demand curve does not shift.
Skill: Level 2: Using deinitions
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
48) Hot dogs and hot dog buns are complements. If the price of a hot dog falls, then
A) the demand for hot dogs will increase.
B) the demand for hot dog buns will decrease.
C) the quantity demanded of hotdogs will decrease.
D) the demand for hot dog buns will increase.
E) the quantity demanded of hot dog buns will increase.
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
16
49) A popular dinner among college students today is sushi, green tea, and wasabi dip so
these foods are complements. If the price of green tea increases and the price of wasabi
dip increases, what would be the efect on demand for sushi at lunch?
A) The demand for sushi would decrease.
B) The demand for sushi would be unafected, but the price would increase.
C) The demand for sushi could increase or decrease.
D) The demand for sushi would increase.
E) The demand for sushi would be unafected, but the price would decrease.
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
50) Soda and hot dogs are complements for one another. If a shortage of carbonated water
leads to an increase in the price of soda, then the
A) demand for hot dogs increases.
B) demand for hot dogs decreases.
C) quantity of hot dogs demanded increases.
D) quantity of hot dogs demanded decreases.
E) More information is needed to determine if the demand increases or decreases.
Skill: Level 2: Using deinitions
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
51) A student at New York University used to take the Redhound bus when she visited her
grandmother in Boston. After graduating, although the bus fare and the plane fare were
the same as they were when she was a student with a well-paid job on Wall Street, she now
takes the plane to Boston to visit her grandmother. For this student, travel by Redhound
bus is
A) a normal good.
B) an inferior good.
C) a substitute good.
D) a complement good.
E) a good with negative preferences.
Skill: Level 2: Using deinitions
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
17
52) If the demand for digital cameras increases when consumers’ incomes rise, then digital
cameras are
A) a normal good.
B) an inferior good.
C) a substitute for camcorders.
D) a complement to camcorders.
E) made using advanced technology.
Skill: Level 2: Using deinitions
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
53) Lesley buys 6 cappuccinos per week when her income is $900 per week and buys 8
cappuccinos per week when her income is $1100 per week. For Lesley, cappuccinos are
a(n) ________ good.
A) normal
B) luxury
C) inferior
D) substitute
E) essential
Skill: Level 2: Using deinitions
Section: Checkpoint 4.1
Status: New
AACSB: Relective thinking
54) If the demand for a good increases when people’s incomes increase,
A) the good is an inferior good.
B) the law of demand is violated.
C) the good’s demand curve must be slope upward.
D) the good is a normal good.
E) the good is a substitute good for an inferior good.
Skill: Level 1: Deinition
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
18
55) In a recession, consumers have less income to spend. As a result, if dining out is a
normal good, then which of the following would happen to the demand curve for dining
out?
A) The demand curve would shift leftward.
B) The demand curve would not shift, but the price of dining out would rise.
C) The efect on the demand curve is unknown.
D) The demand curve would shift rightward.
E) The demand curve would not shift, but the price of dining out would fall.
Skill: Level 2: Using deinitions
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
56) If macaroni and cheese is an inferior good, then a decrease in income results in
A) an increase in the demand for macaroni and cheese.
B) a decrease in the demand for macaroni and cheese.
C) an increase in the supply of macaroni and cheese.
D) a decrease in the supply of macaroni and cheese.
E) Both answers A and D are correct.
Skill: Level 2: Using deinitions
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
57) If income increases and the demand for bus rides decreases,
A) bus rides are a normal good.
B) consumers are behaving irrationally.
C) bus rides are an inferior good.
D) bus rides are a substitute good.
E) bus rides must be a complement good with some other good.
Skill: Level 2: Using deinitions
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
19
58) Which of the following is true?
A) For an inferior good, when income increases, the demand curve shifts leftward.
B) If the price of a substitute rises, the demand curve shifts leftward.
C) If people expect the price of a good will rise in the future, the demand curve shifts
leftward.
D) An increase in population shifts the demand curve leftward.
E) An increase in the cost of producing a good shifts the demand curve leftward.
Skill: Level 2: Using deinitions
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
59) Ramen noodles are a staple food item for many college students. Ramen noodles are
very inexpensive, easy to prepare, and can be combined easily with other foods. After
students graduate, ind employment, and earn a higher income, they decrease their Ramen
noodle purchases signiicantly. In this case, Ramen noodles are
A) a normal good.
B) an inferior good.
C) a complement for higher income people.
D) a substitute good.
E) None of the above answers is correct.
Skill: Level 2: Using deinitions
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
60) Water bottlers announce that next month the price of bottled water will rise by 25
percent. Which of the following occurs immediately?
A) The quantity of bottled water demanded increases.
B) The quantity of bottled water demanded decreases.
C) The demand for bottled water decreases.
D) The demand for bottled water increases.
E) None of the above answers is correct because it is the supply that immediately changes,
not the demand.
Skill: Level 2: Using deinitions
Section: Checkpoint 4.1
Status: Old
AACSB: Relective thinking
20