978-0134078816 Chapter 3 Part 3

Unlock access to all the studying documents.

View Full Document

39) Refer to Figure 3.7. An increase in quantity demanded 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

40) Refer to Figure 3.7. Assume the market is initially at Point B and that pizza is a normal good. An

increase in income would cause the market to move from Point B on demand curve D2 to

A) Point A on demand curve D2.

B) Point C on demand curve D2.

C) demand curve D1.

D) demand curve D3.

Topic: Demand in Product / Output Markets

Skill: Analytical

AACSB: Analytical Thinking

Learning Outcome: Micro-4

41) Refer to Figure 3.7. If pizza and beer are complementary goods, an increase 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

42) Refer to Figure 3.7. If pizza and burritos are substitutes, a decrease in the price of burritos 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

43) Refer to Figure 3.7. A movement from Point A 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 burritos, assuming that pizza and burritos 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

44) Refer to Figure 3.7. An increase 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

45) Refer to Figure 3.7. A decrease in quantity demanded 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

Refer to the information provided in Figure 3.8 below to answer the following question(s).

Figure 3.8

46) Refer to Figure 3.8. Assume that there are only two people in the market for baseball caps: Alex and

Ryan. Along the market demand curve for baseball caps, at a price of ________, quantity demanded

would be ________.

A) $10; 7

B) $10; 11

C) $8; 12

D) $8; 13

Topic: Demand in Product / Output Markets

Skill: Analytical

AACSB: Analytical Thinking

Learning Outcome: Micro-4

47) Refer to Figure 3.8. Assume there are only two people in the market for baseball caps: Alex and Ryan.

Along the market demand curve for baseball caps, at a price of ________, quantity demanded would be

________.

A) $10; 6

B) $10; 12

C) $8; 14

D) $8; 25

Topic: Demand in Product / Output Markets

Skill: Analytical

AACSB: Analytical Thinking

Learning Outcome: Micro-2

48) Refer to Figure 3.8. Assume that there are only two people in the market for baseball caps: Alex and

Ryan. Along the ________ for baseball caps, at a price of $10, quantity demanded would be 5.

A) demand curve for Alex

B) demand curve for Ryan

C) market demand curve

D) none of the above

Topic: Demand in Product / Output Markets

Skill: Analytical

AACSB: Analytical Thinking

Learning Outcome: Micro-4

49) Refer to Figure 3.8. Assume there are only two people in the market for baseball caps: Alex and Ryan.

Along the ________, at a price of $8, quantity demanded would be 7.

A) demand curve for Alex only

B) demand curve for Ryan only

C) market demand curve

D) demand curves for both Ryan and Alex

Topic: Demand in Product / Output Markets

Skill: Analytical

AACSB: Analytical Thinking

Learning Outcome: Micro-4

Refer to the information provided in Figure 3.9 below to answer the following question(s).

Figure 3.9

50) Refer to Figure 3.9. Assume that there are only two people in the market for coconuts: Sasha and Kyle.

Along the market demand curve for coconuts, at a price of ________, quantity demanded would be

________.

A) $14; 7

B) $14; 9

C) $10; 9

D) $10; 8

Topic: Demand in Product / Output Markets

Skill: Analytical

AACSB: Analytical Thinking

Learning Outcome: Micro-2

51) Refer to Figure 3.9. Assume there are only two people in the market for coconuts: Sasha and Kyle.

Along the market demand curve for coconuts, at a price of ________, quantity demanded would be

________.

A) $10; 9

B) $10; 10

C) $14; 9

D) $14; 8

Topic: Demand in Product / Output Markets

Skill: Analytical

AACSB: Analytical Thinking

Learning Outcome: Micro-2

52) Refer to Figure 3.9. Assume that there are only two people in the market for coconuts: Sasha and Kyle.

Along the ________ for coconuts, at a price of $14, quantity demanded would be 10.

A) demand curve for Sasha

B) demand curve for Kyle

C) market demand curve

D) none of the above

Topic: Demand in Product / Output Markets

Skill: Analytical

AACSB: Analytical Thinking

Learning Outcome: Micro-4

53) Refer to Figure 3.9. Assume there are only two people in the market for coconuts: Sasha and Kyle.

Along the ________, at a price of $10, quantity demanded would be 5.

A) demand curve for Sasha only

B) demand curve for Kyle only

C) market demand curve

D) demand curve for either Sasha or Kyle

Topic: Demand in Product / Output Markets

Skill: Analytical

AACSB: Analytical Thinking

Learning Outcome: Micro-4

Refer to Scenario 3.1 below to answer the question(s) that follow.

SCENARIO 3.1: Rented DVDs and movies shown in theaters are substitutes. Rented DVDs and plasma

TVs are complements. Plasma TVs and movies shown in theaters are normal goods. People watch rented

DVDs more often in the winter than in the summer.

54) Refer to Scenario 3.1. Most plasma TVs sold in the United States are imported from Japan. If the

United States government reduces the number of plasma TVs that can be imported into the United States,

ceteris paribus, what would happen?

A) The price of plasma TVs and the rental price of DVDs would decrease.

B) The price of plasma TVs would decrease, and the rental price of DVDs would increase.

C) The price of plasma TVs would increase, and the rental price of DVDs would decrease.

D) The price of plasma TVs and the rental price of DVDs would increase.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-5

55) Refer to Scenario 3.1. To raise additional revenues, the government imposes an entertainment tax on

movie tickets, but there are no new additional taxes levied on rented DVDs. This would lead to

A) an increase in the price of movie tickets, but no change in the rental price of DVDs.

B) an increase in the price of movie tickets and the rental price of DVDs.

C) an increase in the price of a movie ticket and a decrease in the rental price of DVDs.

D) no change in the price of a movie ticket and an increase in the rental price of DVDs.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-5

56) Refer to Scenario 3.1. You observe that the rental price for DVDs is higher in the winter than in the

summer. This would be explained by the fact that

A) demand for rented DVDs is higher in the winter than in the summer.

B) the quantity demanded of rented DVDs is higher in the winter than in the summer.

C) there are more DVDs released into the rental market in the winter than in the summer.

D) consumer income tends to fall in the winter and increase in the summer.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

57) Refer to Scenario 3.1. The number of stores renting DVDs is reduced by 25%, reducing the number of

DVDs available. Which of the following would occur?

A) The rental price of DVDs would increase, and the price of plasma TVs and movie tickets would

decrease.

B) The rental price of DVDs would increase, but the price of plasma TVs and movie tickets would be

unaffected.

C) The rental price of DVDs and movie tickets would decrease, but the price of plasma TVs would

increase.

D) The rental price of DVDs and the price of movie tickets would increase, but the price of plasma TVs

would decrease.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

58) Refer to Scenario 3.1. Most plasma TVs sold in the United States are imported from Japan. If the

United States government eliminates a quota that reduced the number of plasma TVs that can be

imported into the United States, ceteris paribus, what would happen?

A) The price of plasma TVs and the rental price of DVDs would increase.

B) The price of plasma TVs and the rental price of DVDs would decrease.

C) The price of plasma TVs would decrease and the rental price of DVDs would increase.

D) The price of plasma TVs would increase and the rental price of DVDs would decrease.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-5

59) Refer to Scenario 3.1. In response to complaints from movie theater owners, the government removes

an entertainment tax on movie tickets, but there are no additional taxes levied on rented DVDs. This

would lead to

A) a decrease in the price of movie tickets, but no change in the rental price of DVDs.

B) a decrease in the price of a movie ticket and an increase in the rental price of DVDs.

C) a decrease in the price of movie tickets and the rental price of DVDs.

D) no change in the price of a movie ticket and a decrease in the rental price of DVDs.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-5

60) Refer to Scenario 3.1. If the number of stores renting DVDs increases by 10%, which of the following

would occur?

A) The rental price of DVDs would increase and the price of plasma TVs and movie tickets would

decrease.

B) The rental price of DVDs and the price of movie tickets would decrease, but the price of plasma TVs

would increase.

C) The rental price of DVDs and the price of movie tickets would increase, but the price of plasma TVs

would decrease.

D) The rental price of DVDs would increase, but the price of plasma TVs and movie tickets would be

unaffected.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

61) Related to the Economics in Practice on page 50: The Amazon Kindle and the electronic textbooks

available for the Kindle are complementary goods. Electronic textbooks and traditional, hard–copy

textbooks are substitute products. If the price of electronic textbooks for the Kindle decreases,

A) demand for the Kindle increases, demand for electronic textbooks increases, and demand for

traditional, hard–copy textbooks decreases.

B) the quantity of Kindles demanded increases, demand for electronic textbooks increases, and the

quantity of traditional, hard–copy textbooks demanded decreases.

C) demand for the Kindle decreases, the quantity of electronic textbooks demanded increases, and

demand for traditional, hard–copy textbooks decreases.

D) demand for the Kindle increases, the quantity of electronic textbooks demanded increases, and

demand for traditional, hard–copy textbooks decreases.

Topic: Demand in Product / Output Markets: Economics in Practice

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

62) Related to the Economics in Practice on page 50: The Amazon Kindle and the electronic textbooks

available for the Kindle are complementary goods. Electronic textbooks and traditional, hard copy

textbooks are substitute products. If the price of traditional, hard–copy textbooks increases,

A) demand for traditional, hard–copy textbooks decreases and demand for electronic textbooks increases.

B) the quantity of traditional, hard–copy textbooks demanded decreases and demand for electronic

textbooks increases.

C) the quantity of electronic textbooks demanded increases and demand for the Kindle increases.

D) the quantity of electronic textbooks demanded increases and demand for traditional, hard–copy

textbooks decreases.

Topic: Demand in Product / Output Markets: Economics in Practice

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

63) Income ________ along the demand curve.

A) increases

B) decreases

C) is held constant

D) either increases or decreases

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

64) Which of the following will not cause a shift in the demand curve for DVDs?

A) a change in income

B) a change in wealth

C) a change in the price of Blu–ray discs

D) a change in the price of DVDs

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

65) According to the law of demand, quantity demanded decreases as ________, ceteris paribus.

A) prices rise

B) prices fall

C) demand increases

D) demand decreases

Topic: Demand in Product / Output Markets

Skill: Definition

Learning Outcome: Micro-1

66) According to the law of demand, quantity demanded increases as ________, ceteris paribus.

A) prices rise

B) prices fall

C) demand increases

D) demand decreases

Topic: Demand in Product / Output Markets

Skill: Definition

Learning Outcome: Micro-1

67) According to the law of demand there is negative relationship between ________ and ________.

A) price; demand

B) quantity; income

C) price; income

D) price; quantity demanded

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4