Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
121. When quantity demanded has increased at every price, it might be because
a.
the number of buyers in the market has decreased.
b.
income has increased, and the good is an inferior good.
c.
the costs incurred by sellers producing the good have decreased.
d.
the price of a complementary good has decreased.
122. Which of the following might cause the demand curve for an inferior good to shift to the left?
a.
a decrease in income
b.
an increase in the price of a substitute
c.
an increase in the price of a complement
d.
None of the above is correct.
123. If toast and butter are complements, then which of the following would increase the demand for toast?
a.
a decrease in the price of toast
b.
a decrease in the price of butter
c.
an increase in the price of butter
d.
Both a and b are correct.
124. When it comes to people's tastes, economists generally believe that
a.
tastes are based on forces that are well within the realm of economics.
b.
tastes are based on historical and psychological forces that are beyond the realm of economics.
c.
tastes can only be studied through well-constructed, real-life models.
d.
because tastes do not directly affect demand, there is little need to explain people's tastes.
125. Economists normally
a.
do not try to explain people's tastes, but they do try to explain what happens when tastes change.
b.
believe that they must be able to explain people's tastes in order to explain what happens when tastes change.
c.
do not believe that people's tastes determine demand, so they ignore the subject of tastes.
d.
incorporate tastes into economic models only to the extent that tastes determine whether pairs of goods are
substitutes or complements.
126. Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart
failure. We could expect the current demand for
a.
hair gel to increase.
b.
razors to increase.
c.
combs to increase.
d.
shampoo to increase.
127. Suppose scientists provide evidence that people who drink energy drinks are more likely to have a heart attack than
people who do not drink energy drinks. We would expect to see
a.
no change in the demand for energy drinks.
b.
a decrease in the demand for energy drinks.
c.
an increase in the demand for energy drinks.
d.
a decrease in the supply of energy drinks.
128. A very hot summer in Atlanta will cause
a.
the demand curve for lemonade to shift to the left.
b.
the demand for air conditioners to decrease.
c.
the demand for jackets to decrease.
d.
a movement downward and to the right along the demand curve for tank tops.
129. If a study by medical researchers finds that eating brown rice causes weight loss while eating white rice causes
weight gain, then we likely would see
a.
an increase in demand for brown rice and a decrease in demand for white rice.
b.
a decrease in demand for brown rice and an increase in demand for white rice.
c.
an increase in demand for both brown and white rice.
d.
no change in demand for either type of rice because weight loss is not a determinant of demand.
130. Which of the following events could shift the demand curve for gasoline to the left?
a.
The income of gasoline buyers rises, and gasoline is a normal good.
b.
The income of gasoline buyers falls, and gasoline is an inferior good.
c.
Public service announcements run on television encourage people to walk or ride bicycles instead of driving
cars.
d.
The price of gasoline rises.
131. You watch a lot of HGTV during your summer vacation, and you notice that most housing buyers list granite
countertops in their “must have” lists when buying a new or existing house. You expect the demand for
a.
granite countertops to shift to the left.
b.
granite countertops to shift to the right.
c.
substitute products such as marble countertops to shift to the right.
d.
substitute products such as marble countertops to be unaffected by buyers’ preferences for granite.
132. An increase in the number of college scholarships issued by private foundations would
a.
increase the supply of education.
b.
decrease the supply of education.
c.
increase the demand for education.
d.
decrease the demand for education.
133. Today, people changed their expectations about the future. This change
a.
can cause a movement along a demand curve.
b.
can affect future demand but not today’s demand.
c.
can affect today’s demand.
d.
cannot affect either today’s demand or future demand.
134. If Miguel expects to earn a higher income next month, he may choose to
a.
save more now and spend less of his current income on goods and services.
b.
save less now and spend more of his current income on goods and services.
c.
decrease his current demand for goods and services.
d.
move along his current demand curves for goods and services.
135. You love peanut butter. You hear on the news that 50 percent of the peanut crop in the South has been wiped out by
drought and that this will cause the price of peanuts to double by the end of the year. As a result, your demand for peanut
butter
a.
will increase but not until the end of the year.
b.
increases today.
c.
decreases as you look for a substitute good.
d.
shifts left today.
136. Elena loves orange juice. She reads in the newspaper that 20 percent of the Florida orange crop was destroyed by a
late spring frost. Economists predict that the price of oranges will rise by 50 percent by the end of the year. As a result,
Elena’s demand for orange juice
a.
will increase but not until the end of the year.
b.
increases today.
c.
decreases as she looks for a substitute good.
d.
shifts left today.
137. Ford Motor Company announces that next month it will offer $3,000 rebates on new Mustangs. As a result of this
information, today’s demand curve for Mustangs
a.
shifts to the right.
b.
shifts to the left.
c.
shifts either to the right or to the left, but we cannot determine the direction of the shift from the given
information.
d.
will not shift; rather, the demand curve for Mustangs will shift to the right next month.
138. What will happen in the market for shotgun-shell ammunition now if buyers expect higher shotgun-shell prices in the
near future?
a.
The demand for shotgun-shell ammunition will increase.
b.
The demand for shotgun-shell ammunition will decrease.
c.
The demand for shotgun-shell ammunition will be unaffected.
d.
The supply of shotgun-shell ammunition will increase.
139. What will happen in the gasoline market now if buyers expect higher gasoline prices in the near future?
a.
The demand for gasoline will increase.
b.
The demand for gasoline will decrease.
c.
The demand for gasoline will be unaffected.
d.
The supply of gasoline will increase.
140. Today's demand curve for gasoline could shift in response to a change in
a.
today's price of gasoline.
b.
the expected future price of gasoline.
c.
the number of sellers of gasoline.
d.
All of the above are correct.
141. If the number of buyers in a market decreases, then
a.
demand will increase.
b.
demand will decrease.
c.
supply will increase.
d.
supply will decrease.
142. Which of the following does not affect an individual's demand curve?
a.
expectations
b.
income
c.
prices of related goods
d.
the number of buyers
143. Warrensburg is a small college town in Missouri. At the end of August each year, the market demand for fast food in
Warrensburg
a.
increases.
b.
decreases.
c.
remains constant, but we observe a movement downward and to the right along the demand curve.
d.
remains constant, but we observe a movement upward and to the left along the demand curve.
144. The University of Iowa was voted the #1 “party school” in 2013. The University of Iowa is located in Iowa City. At
the end of August each year, the market demand for beer in Iowa City
a.
decreases.
b.
increases.
c.
remains constant, but we observe a movement downward and to the right along the demand curve.
d.
remains constant, but we observe a movement upward and to the left along the demand curve.
Figure 4-5
145. Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand B to Demand C in
the market for mattresses?
a.
a decrease in the price of mattresses
b.
a decrease in the price of custom wooden sleigh bed frames
c.
a change in consumer tastes away from wooden bedroom furniture
d.
a decrease in the number of people in the United States
146. Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand C to Demand A in
the market for DVDs?
a.
an increase in the price of DVDs
b.
a decrease in the price of DVD players
c.
a change in consumer preferences toward watching movies in movie theaters rather than at home
d.
an expectation by buyers that their incomes will increase in the very near future
147. Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand C to Demand A in
the market for tennis balls in the United States?
a.
an increase in the price of tennis balls
b.
a decrease in the price of tennis racquets
c.
an expectation by buyers that their incomes will increase in the very near future
d.
a decrease in the number of people in the United States under age 70
148. Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand A to Demand B in
the market for golf balls in the United States?
a.
a decrease in the price of golf balls
b.
an increase in the price of green fees
c.
an expectation by buyers that their incomes will increase in the very near future
d.
a change in consumer tastes away from golf and toward tennis
149. Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand A to Demand B in
the market for oranges in the United States?
a.
a freeze in Florida
b.
a technological advance that allows oranges to ripen faster
c.
a decrease in the price of apples
d.
an announcement by the FDA that oranges prevent heart disease
150. Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand B to Demand A in
the market for oranges in the United States?
a.
a freeze in Florida
b.
a technological advance that allows oranges to ripen faster
c.
a decrease in the price of apples
d.
an announcement by the FDA that oranges prevent heart disease
Figure 4-6
151. Refer to Figure 4-6. Suppose that the federal government is concerned about obesity in the United States. Congress
is considering two plans. One would require “junk food” producers to include warning labels on all junk food. The other
would impose a tax on all products considered to be junk food. If the warning labels are successful, we could illustrate the
plan as producing a movement from
a.
Point A to Point B in Panel 1.
b.
Point B to Point A in Panel 1.
c.
Point A to Point C in Panel 2.
d.
Point C to Point A in Panel 2.
152. Refer to Figure 4-6. Suppose that the federal government is concerned about obesity in the United States. Congress
is considering two plans. One would require “junk food” producers to include warning labels on all junk food. The other
would impose a tax on all products considered to be junk food. We could illustrate the tax as producing a movement from
a.
Point A to Point B in Panel 1.
b.
Point B to Point A in Panel 1.
c.
Point A to Point C in Panel 2.
d.
Point C to Point A in Panel 2.
Figure 4-7
153. Refer to Figure 4-7. The shift from Da to Db is called
a.
an increase in demand.
b.
a decrease in demand.
c.
a decrease in quantity demanded.
d.
an increase in quantity demanded.
154. Refer to Figure 4-7. The shift from Db to Da is called
a.
an increase in demand.
b.
a decrease in demand.
c.
a decrease in quantity demanded.
d.
an increase in quantity demanded.
155. Refer to Figure 4-7. If the demand curve for Good X shifts from Db to Da, then
a.
firms would be willing to supply more of Good X than before at each possible price.
b.
people are willing to buy less of Good X than before at each possible price.
c.
people’s incomes must have increased.
d.
the price of Good X has increased.
156. Refer to Figure 4-7. If the demand curve for Good X shifts from Da to Db, then
a.
firms would be willing to supply less of Good X than before at each possible price.
b.
people are willing to buy more of Good X than before at each possible price.
c.
people’s incomes must have decreased.
d.
the price of Good X has decreased.
157. Refer to Figure 4-7. The movement from Db to Da could be caused by
a.
a decrease in price.
b.
an increase in the price of a complement.
c.
a technological advance.
d.
an increase in the price of a substitute.
158. Refer to Figure 4-7. The movement from Da to Db could be caused by
a.
a decrease in price.
b.
a decrease in income, assuming the good is inferior.
c.
buyers expecting the price of the good to fall in the near future.
d.
an increase in the price of a complement.
159. Refer to Figure 4-7. The movement from Da to Db in the market for potato chips could be caused by a(n)
a.
decrease in the price of potato chips.
b.
decrease in income, assuming that potato chips are a normal good.
c.
announcement by the FDA that potato chips cause cancer.
d.
increase in the price of a pretzels.
160. Refer to Figure 4-7. The movement from Db to Da in the market for potato chips could be caused by a(n)
a.
decrease in the price of potato chips.
b.
decrease in income, assuming that potato chips are a normal good.
c.
announcement by the FDA that potato chips lower cholesterol.
d.
increase in the price of a pretzels.
Figure 4-8
161. Refer to Figure 4-8. Suppose the figure shows the market demand for laptop computers. Suppose the price of
wireless printers, a complementary good, decreases. Which of the following changes would occur?
a.
a movement along D2 from point A to point B
b.
a movement along D2 from point B to point A
c.
a shift from D1 to D2
d.
a shift from D2 to D1
162. Refer to Figure 4-8. Suppose the figure shows the market demand for laptop computers. Suppose the price of
wireless keyboards, a complementary good, increases. Which of the following changes would occur?
a.
a movement along D2 from point A to point B
b.
a movement along D2 from point B to point A
c.
a shift from D1 to D2
d.
a shift from D2 to D1
163. Refer to Figure 4-8. Suppose the figure shows the market demand for Big Box e-readers. Suppose the price of the
leading competitor’s e-readers, a substitute good, decreases. Which of the following changes would occur?
a.
a movement along D2 from point A to point B
b.
a movement along D2 from point B to point A
c.
a shift from D1 to D2
d.
a shift from D2 to D1
164. Refer to Figure 4-8. Suppose the figure shows the market demand for coffee. Suppose the price of tea, a substitute
good, increases. Which of the following changes would occur?
a.
a movement along D2 from point A to point B
b.
a movement along D2 from point B to point A
c.
a shift from D1 to D2
d.
a shift from D2 to D1
165. For the general population, a 10 percent increase in the price of cigarettes leads to a
a.
1 percent reduction in the quantity demanded of cigarettes.
b.
4 percent reduction in the quantity demanded of cigarettes.
c.
10 percent reduction in the quantity demanded of cigarettes.
d.
12 percent reduction in the quantity demanded of cigarettes.
166. For teenagers, a 10 percent increase in the price of cigarettes leads to a
a.
1 percent reduction in the quantity demanded of cigarettes.
b.
4 percent reduction in the quantity demanded of cigarettes.
c.
10 percent reduction in the quantity demanded of cigarettes.
d.
12 percent reduction in the quantity demanded of cigarettes.
167. The belief that tobacco is a “gateway drug” is consistent with
a.
the idea that tobacco and marijuana are substitutes.
b.
the idea that an increase in income causes a decrease in the demand for tobacco and an increase in the demand
for marijuana.
c.
the idea that lower cigarette prices are associated with less use of marijuana.
d.
most of the available evidence.
168. Most studies indicate that tobacco and marijuana tend to be
a.
substitutes.
b.
complements.
c.
unrelated because one good is legal while the other one is illegal.
d.
inferior goods.
169. Opponents of cigarette taxes often argue that tobacco and marijuana are substitutes so that high cigarette prices
a.
encourage marijuana use, and the evidence supports this argument.
b.
encourage marijuana use, but the evidence does not support this argument.
c.
discourage marijuana use, and the evidence supports this argument.
d.
discourage marijuana use, but the evidence does not support this argument.
Figure 4-9
Panel (a)
Panel (b)
170. Refer to Figure 4-9. The graphs show the demand for cigarettes. In Panel (a), the arrows are consistent with which
of the following events?
a.
The price of marijuana, a complement to cigarettes, increased.
b.
Mandatory health warnings were placed on cigarette packages.
c.
Several foreign countries banned U.S. cigarettes in their countries.
d.
A tax was placed on cigarettes.
171. Refer to Figure 4-9. The graphs show the demand for cigarettes. In Panel (a), the arrows are consistent with which
of the following events?
a.
Tobacco and marijuana are complements, and the price of marijuana decreased.
b.
Tobacco is a “gateway drug,” and the price of marijuana increased.
c.
The price of cigarettes increased.
d.
The arrows are consistent with all of these events.
172. Refer to Figure 4-9. The graphs show the demand for cigarettes. In Panel (b), the arrows are consistent with which
of the following events?
a.
an increase in the price of cigarettes
b.
placing a tax on cigarettes
c.
the prohibition of cigarette advertisements on television
d.
decreasing the price of marijuana, given that tobacco and marijuana are complements
