11
11) If the demand for coffee decreases as income decreases, coffee is a(n)
A) normal good.
B) inferior good.
C) substitute good.
D) complementary good.
Topic: Demand in Product / Output Markets
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
12) If the demand for sardines increases as income decreases, sardines are a(n)
A) normal good.
B) inferior good.
C) substitute good.
D) complementary good.
Topic: Demand in Product / Output Markets
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
Refer to the information provided in Figure 3.3 below to answer the question(s) that follow.
Figure 3.3
13) Refer to Figure 3.3. As your income increased, the demand for X shifted from D1 to D2. Good X is
A) an inferior good.
B) a normal good.
C) a luxury good.
D) an income–neutral good.
Topic: Demand in Product / Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
12
14) Refer to Figure 3.3. As your income decreased, the demand for X shifted from D1 to D2. Good X is
A) an inferior good.
B) a normal good.
C) a luxury good.
D) an income–neutral good.
Topic: Demand in Product / Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
Refer to the information provided in Figure 3.4 below to answer the question(s) that follow.
Figure 3.4
15) Refer to Figure 3.4. If consumer income falls, the demand for tuna fish sandwiches shifts from D0 to
D1. This implies that tuna fish sandwiches are a(n)
A) normal good.
B) inferior good.
C) substitute good.
D) complementary good.
Topic: Demand in Product / Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
13
16) Refer to Figure 3.4. If consumer income increases, the demand for tuna fish sandwiches shifts from D0
to D1. This implies that tuna fish sandwiches are a(n)
A) normal good.
B) inferior good.
C) substitute good.
D) complementary good.
Topic: Demand in Product / Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
Refer to the information provided in Figure 3.5 below to answer the question(s) that follow.
Figure 3.5
17) Refer to Figure 3.5. If consumer income increases, the demand for chili peppers shifts from D0 to D1.
This implies that chili peppers are a(n)
A) normal good.
B) inferior good.
C) substitute good.
D) complementary good.
Topic: Demand in Product / Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
14
18) Refer to Figure 3.5. If consumer income decreases, the demand for chili peppers shifts from D0 to D1.
This implies that chili peppers are a(n)
A) normal good.
B) inferior good.
C) substitute good.
D) complementary good.
Topic: Demand in Product / Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
19) Suppose the demand for books goes down when the price of video games goes down. We can say that
these two goods are
A) complements.
B) substitutes.
C) unrelated goods.
D) perfect substitutes.
Topic: Demand in Product / Output Markets
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
20) During an economic downturn when consumer income falls, the demand for tacos increases and the
demand for sushi decreases. This implies that tacos
A) and sushi are complements.
B) are a normal good and sushi is an inferior good.
C) are an inferior good and sushi is a normal good.
D) are an economic bad and sushi is an economic good.
Topic: Demand in Product / Output Markets
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
21) A good whose demand is inversely related to income is a(n)
A) normal good.
B) inferior good.
C) regular good.
D) new good.
Topic: Demand in Product / Output Markets
Skill: Definition
Learning Outcome: Micro-4
15
22) In college you practically existed on instant noodles, but now you earn $95,000 a year. You never want
to see instant noodles again. We can safely conclude that you consider instant noodles to be a(n)
A) normal good.
B) complementary good.
C) luxury.
D) inferior good.
Topic: Demand in Product / Output Markets
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
23) For inferior goods, a decrease in income will cause the
A) quantity demanded to fall.
B) demand to increase.
C) demand to fall.
D) quantity demanded to increase.
Topic: Demand in Product / Output Markets
Skill: Definition
Learning Outcome: Micro-4
24) A decrease in demand for cameras would likely be caused by
A) an increase in the price of a substitute good.
B) an increase in the price of cameras.
C) an increase in the price of a complementary good.
D) a decrease in the price of cameras.
Topic: Demand in Product / Output Markets
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
25) When the decrease in the price of one good causes the demand for another good to decrease, the
goods are
A) normal.
B) inferior.
C) substitutes.
D) complements.
Topic: Demand in Product / Output Markets
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
16
26) Demand for one item goes down when the price of another item goes up. These items must be
A) substitutes.
B) complements.
C) normal goods.
D) inferior goods.
Topic: Demand in Product / Output Markets
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
27) In response to news reports that taking aspirin daily can reduce an individual’s risk of a heart attack,
there will most likely be a(n)
A) increase in the supply of aspirin.
B) decrease in the supply of aspirin.
C) increase in the demand for aspirin.
D) increase in the quantity demanded of aspirin.
Topic: Demand in Product / Output Markets
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
28) Demand curves are derived while holding constant
A) income, tastes, and the price of the good.
B) only income and tastes.
C) income, tastes, and the prices of other goods.
D) only tastes and the prices of other goods.
Topic: Demand in Product / Output Markets
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
29) The quantity demanded of Pepsi has decreased. The best explanation for this is that
A) the price of Coca–Cola has increased.
B) Pepsi‘s advertising is not as effective as in the past.
C) the price of Pepsi has increased.
D) Pepsi consumers had an increase in income.
Topic: Demand in Product / Output Markets
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
17
Refer to the information provided in Figure 3.6 below to answer the question(s) that follow.
Figure 3.6
30) Refer to Figure 3.6. The number of DVDs Isabel rents per week increases from 4 to 7. This is caused by
A) an increase in income if DVDs are a normal good.
B) a decrease in the price of popcorn, which is a complement to DVDs.
C) a decrease in the rental price of DVDs.
D) either A or B.
Topic: Demand in Product / Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
31) Refer to Figure 3.6. The number of DVDs Isabel rents per week decreases from 7 to 4. This is caused
by
A) a decrease in income if DVDs are a normal good.
B) an increase in the price of popcorn which is a complement to DVDs.
C) an increase in the rental price of DVDs.
D) a decrease in the cable price of pay–per–view movies.
Topic: Demand in Product / Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
18
32) An increase in the price of a good or service leads to a(n) ________ that leads to a ________.
A) decrease in demand; movement along the demand curve
B) decrease in quantity demanded; movement along the demand curve
C) increase in demand; shift of the demand curve
D) increase in quantity demanded; shift of the demand curve
Topic: Demand in Product / Output Markets
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
33) A change in income leads to a ________ that causes a ________.
A) change in demand; movement along the demand curve
B) change in quantity demanded; movement along the demand curve
C) change in demand; shift of the demand curve
D) change in quantity demanded; shift of the demand curve
Topic: Demand in Product / Output Markets
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
19
Refer to the information provided in Figure 3.7 below to answer the following question(s).
Figure 3.7
34) Refer to Figure 3.7. Assume the market is initially at Point B and that pizza is a normal good. A
decrease in income would cause the market to move from Point B on demand curve D2 to
A) demand curve D1.
B) demand curve D3.
C) Point A on demand curve D2.
D) Point C on demand curve D2.
Topic: Demand in Product / Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
35) Refer to Figure 3.7. If pizza and beer are complementary goods, a decrease in the price of beer will
cause a movement from Point B on demand curve D2 to
A) demand curve D1.
B) demand curve D3.
C) Point A on demand curve D2.
D) Point C on demand curve D2.
Topic: Demand in Product / Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
20
36) Refer to Figure 3.7. If pizza and hamburgers are substitutes, an increase in the price of hamburgers
will cause a movement from Point B on demand curve D2 to
A) demand curve D1.
B) demand curve D3.
C) Point A on demand curve D2.
D) Point C on demand curve D2.
Topic: Demand in Product / Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
37) Refer to Figure 3.7. A movement from Point C to Point B on demand curve D2 would be caused by
a(n)
A) decrease in income, assuming pizza is a normal good.
B) decrease in the price of hamburgers, assuming that pizza and hamburgers are substitutes.
C) decrease in the price of pizza.
D) increase in the price of pizza.
Topic: Demand in Product / Output Markets
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
38) Refer to Figure 3.7. A decrease in demand is represented by the movement
A) from D2 to D1.
B) from D2 to D3.
C) along D2 from Point B to Point A.
D) along D2 from Point B to Point C.
Topic: Demand in Product / Output Markets
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4