The Market Forces of Supply and Demand 835
106.
Two goods are substitutes when a decrease in the price of one good
a.
decreases the demand for the other good.
b.
decreases the quantity demanded of the other good.
c.
increases the demand for the other good.
d.
increases the quantity demanded of the other good.
107.
Suppose that a decrease in the price of good X results in fewer units of good Y being
demanded. This implies that
X and Y are
a.
complementary goods.
b.
normal goods.
c.
inferior goods.
d.
substitute goods.
108.
Good X and good Y are substitutes. If the price of good Y increases, then the
a.
demand for good X will decrease.
b.
quantity demanded of good X will decrease.
c.
demand for good X will increase.
d.
quantity demanded of good X will increase.
109.
A likely example of substitute goods for most people would be
a.
peanut butter and jelly.
b.
tennis balls and tennis rackets.
c.
televisions and subscriptions to cable television services.
d.
pencils and pens.
The Market Forces of Supply and Demand 837
110.
A likely example of substitute goods for most people would be
a.
tables and chairs.
b.
bicycles and helmets.
c.
apple juice and orange juice.
d.
coffee and sugar.
111.
If muffins and bagels are substitutes, a higher price for bagels would result in a(n)
a.
increase in the demand for bagels.
b.
decrease in the demand for bagels.
c.
increase in the demand for muffins.
d.
decrease in the demand for muffins.
112.
If Kindle e-readers and Nook e-readers are substitutes, a higher price for Nooks would result in
a(n)
a.
increase in the demand for Nooks.
b.
decrease in the demand for Nooks.
c.
increase in the demand for Kindles.
d.
decrease in the demand for Kindles.
113.
You wear either shorts or sweatpants every day. You notice that sweatpants have gone on sale,
so your demand
for
a.
sweatpants will increase.
b.
sweatpants will decrease.
c.
shorts will increase.
d.
shorts will decrease.
114.
If mayonnaise and Miracle Whip are substitutes, then which of the following would increase the
demand for
Miracle Whip?
a.
a decrease in the price of Miracle Whip
b.
an increase in the price of mayonnaise
c.
a decrease in the price of mayonnaise
d.
Both a and b are correct.
115.
Two goods are complements when a decrease in the price of one good
a.
decreases the quantity demanded of the other good.
b.
decreases the demand for the other good.
c.
increases the quantity demanded of the other good.
d.
increases the demand for the other good.
116.
If textbooks and study guides are complements, then an increase in the price of textbooks will
result in
a.
more textbooks being sold.
b.
more study guides being sold.
c.
fewer study guides being sold.
d.
no difference in the quantity sold of either good.
117.
A likely example of complementary goods for most people would be
a.
butter and margarine.
b.
lawnmowers and automobiles.
c.
chips and salsa.
d.
cola and lemonade.
118.
A likely example of complementary goods for most people would be
a.
canoes and paddles.
b.
snow mobiles and sofas.
c.
coffee and tea.
d.
tennis balls and basketballs.
119.
A higher price for batteries would result in a(n)
a.
increase in the demand for flashlights.
b.
decrease in the demand for flashlights.
c.
increase in the demand for batteries.
d.
decrease in the demand for batteries.
120.
Suppose you like to make, from scratch, pies filled with banana cream and vanilla pudding. You
notice that the price
of bananas has increased. As a result, your demand for vanilla pudding
would
a.
decrease.
b.
increase.
c.
be unaffected.
d.
There is insufficient information given to answer the question.
121.
Holding all other things constant, a higher price for ski lift tickets would
a.
increase the number of skiers.
b.
increase the price of skis.
c.
decrease the number of skis sold.
d.
decrease the demand for other winter recreational activities.
122.
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.
123.
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.
124.
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.
125.
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.
126.
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.
127.
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.
128.
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.
129.
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.
The Market Forces of Supply and Demand 847
130.
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.
131.
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.
132.
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.
133.
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.
134.
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.
135.
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.
136.
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.
137.
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.
The Market Forces of Supply and Demand 851
138.
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.
139.
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.
140.
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.
141.
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.
The Market Forces of Supply and Demand 853
142.
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.
143.
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
144.
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.
145.
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.