978-0134078816 Chapter 3 Part 4

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68) As Tabitha consumes more ice cream sundaes within a given period of time, it is likely that each

additional sundae consumed will

A) bring her successively more satisfaction.

B) bring her successively less satisfaction.

C) increase her quantity demanded for ice cream sundaes.

D) increase the supply of ice cream sundaes.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

69) If the demand for macaroni and cheese decreases as income increases, macaroni and cheese is a(n)

A) complementary good.

B) normal good.

C) inferior good.

D) substitute good.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

70) If the demand for green tea increases as income increases, green tea is a(n)

A) complementary good.

B) substitute good.

C) normal good.

D) inferior good.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

71) Suppose the demand for lawnmowers goes down when the price of gasoline goes up. 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

32

72) During an economic upturn when consumer income rises, the demand for caviar increases and the

demand for hummus decreases. This implies that caviar

A) and hummus are complements.

B) is a normal good and hummus is an inferior good.

C) is an inferior good and hummus is a normal good.

D) is an economic bad and hummus is an economic good.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

73) A good whose demand is directly 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

74) In college you could barely afford to dine in restaurants. Now you earn $80,000 a year and dine out at

least three times per week. We can safely conclude that you consider restaurant meals to be 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

75) For inferior goods, demand will fall when

A) income increases.

B) income decreases.

C) price increases.

D) price decreases.

Topic: Demand in Product / Output Markets

Skill: Definition

Learning Outcome: Micro-4

33

76) When the increase 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

77) An increase in demand for laptop computers would likely be caused by

A) an increase in the price of a substitute good.

B) an increase in the price of laptop computers.

C) an increase in the price of a complementary good.

D) a decrease in the price of laptop computers.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

78) Demand for one item goes down when the price of another item goes down. 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

79) In response to news reports that drinking a glass of red wine each day can reduce an individual’s risk

of heart disease, there will most likely be a(n)

A) increase in the demand for red wine.

B) decrease in the supply of red wine.

C) increase in the supply of red wine.

D) increase in the quantity demanded of red wine.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

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80) ________ curves are derived while holding constant income, tastes, and the prices of other goods.

A) Distribution

B) Production

C) Demand

D) Supply

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

81) The quantity demanded of Coca Cola has increased. The best explanation for this is that

A) the price of Pepsi has decreased.

B) Coca Cola has instituted a new, successful advertising campaign.

C) the price of Coca Cola has decreased.

D) Coca Cola consumers had an increase in income.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

82) A decrease 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) increase in quantity demanded; movement along the demand curve

C) increase in demand; shift of the demand curve

D) decrease in quantity demanded; shift of the demand curve

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

83) A change in the ________ leads to a change in demand that causes a ________.

A) price of other goods; shift in the demand curve

B) price of other goods; movement along the demand curve

C) price of the original product; shift of the demand curve

D) price of the original product; shift of the demand curve and a movement along the new demand curve

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

35

84) Related to the Economics in Practice on p. 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 increases,

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

traditional, hard–copy textbooks increases.

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

quantity of traditional, hard–copy textbooks demanded increases.

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

demand for traditional, hard–copy textbooks increases.

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

demand for traditional, hard–copy textbooks increases.

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

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

85) Related to the Economics in Practice on p. 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 the Kindle decreases,

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

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

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

D) the quantity of Kindles demanded increases and the quantity of electronic textbooks demanded

increases.

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

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

86) Related to the Economics in Practice on p. 51: Economist Meghan Busse found after examining more

than 40 million car transactions that car purchasers are ________ influenced in their choice of cars by

temporary weather fluctuations at the time of purchase.

A) not at all

B) heavily

C) slightly

D) always

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

Skill: Fact

AACSB: Reflective Thinking

Learning Outcome: Micro-4

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87) Related to the Economics in Practice on p. 51: It would most likely be ________ if a particular day’s

weather influenced the purchase of a durable good such as an automobile.

A) expected

B) a surprise

C) normal behavior

D) impossible

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

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

88) Wealth is a flow measure.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-1

89) A change in the price of a service leads to a change in quantity demanded of the service.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

90) Quantity demanded of a product is determined only by how much of that product consumers desire.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

91) Inferior goods are always substandard.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

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92) If iPods and iTunes are complements, then a decrease in the price of iPods will result in a decrease in

the demand for iTunes.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

93) Income is a flow measure.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-1

94) A change in the price of a good leads to a change in the demand of the good.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

95) Quantity demanded is determined by how much consumers are willing to pay for the good or service.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

96) Demand is determined by how much suppliers are willing and able to produce.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

97) Inferior goods are also known as substitute goods.

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

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98) If coffee and tea are substitutes, then an increase in the price of coffee will result in an increase in the

demand for tea.

Answer: TRUE

Diff: 1

Topic: Demand in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

3.4 Supply in Product / Output Markets

1) According to the law of supply, there is a

A) negative relationship between price and the quantity of a good supplied.

B) positive relationship between price and the quantity of a good supplied.

C) negative relationship between price and the change in supply.

D) positive relationship between price and the change in supply.

Topic: Supply in Product / Output Markets

Skill: Definition

Learning Outcome: Micro-1

2) The price of hard drives used in the manufacturing of laptop computers has risen. This will lead to

________ laptop computers.

A) an increase in the supply of

B) a decrease in the supply of

C) an increase in the quantity supplied of

D) a decrease in the quantity supplied of

Topic: Supply in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

3) If the price of chili increases, there will be ________ of chili cheese fries.

A) an increase in the supply

B) a decrease in the supply

C) an increase in the quantity supplied

D) a decrease in the quantity supplied

Topic: Supply in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

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4) A frozen food manufacturer can produce either pizzas or calzones. As the result of an increase in the

price of calzones, the firm produces more calzones and fewer pizzas. An economist would explain this by

saying

A) the supply of calzones increased and the supply of pizzas decreased.

B) there has been an increase in the quantity supplied of calzones and a decrease in the quantity supplied

of pizzas.

C) there has been an increase in the quantity supplied of calzones and a decrease in the supply of pizza.

D) the supply of calzones increased and the quantity supplied of pizza decreased.

Topic: Supply in Product / Output Markets

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-4

Refer to the information provided in Figure 3.10 below to answer the following question(s).

Figure 3.10

5) Refer to Figure 3.10. A decrease in the wage rate of pizza makers will cause a movement from Point B

on supply curve S2 to

A) Point A on supply curve S2.

B) Point C on supply curve S2.

C) supply curve S3.

D) supply curve S1.

Topic: Supply in Product / Output Markets

Skill: Analytical

AACSB: Analytical Thinking

Learning Outcome: Micro-4

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6) Refer to Figure 3.10. An increase in supply is represented by the movement from

A) S2 to S3.

B) S2 to S1.

C) Point B to Point A along supply curve S2.

D) Point B to Point C along supply curve S2.

Topic: Supply in Product / Output Markets

Skill: Analytical

AACSB: Analytical Thinking

Learning Outcome: Micro-4

7) Refer to Figure 3.10. A decrease in quantity supplied is represented by a movement from

A) S2 to S3.

B) S2 to S1.

C) Point B to Point A along supply curve S2.

D) Point B to Point C along supply curve S2.

Topic: Supply in Product / Output Markets

Skill: Analytical

AACSB: Analytical Thinking

Learning Outcome: Micro-4

8) Refer to Figure 3.10. An increase in the price of pizza sauce will cause a movement from Point B on

supply curve S2 to

A) supply curve S3.

B) supply curve S1.

C) Point A on supply curve S2.

D) Point C on supply curve S2.

Topic: Supply in Product / Output Markets

Skill: Analytical

AACSB: Analytical Thinking

Learning Outcome: Micro-4

9) Refer to Figure 3.10. A movement from Point A to Point B on supply curve S2 would be caused by a(n)

A) increase in the price of pizza.

B) decrease in the demand for pizza.

C) increase in the price of pizza dough.

D) increase in the price of hamburgers, assuming hamburgers are a substitute for pizza.

Topic: Supply in Product / Output Markets

Skill: Analytical

AACSB: Analytical Thinking

Learning Outcome: Micro-4