62) If income decreases or the price of a complement rises
A) the demand curve for a normal good shifts leftward.
B) the demand curve for a normal good shifts rightward.
C) there is an upward movement along the demand curve for the good.
D) there is a downward movement along the demand curve for the good.
63) A consumer might consider in-line skates and elbow-pads to be
A) products with upward sloping demand curves.
B) unrelated goods.
C) complements.
D) substitutes.
64) When people’s incomes increase, the demand for a good increases. The good is called
A) an inferior good.
B) a complement.
C) a substitute.
D) a normal good.
65) Normal goods are those for which demand decreases as
A) the price of a complement falls.
B) the price of a substitute falls.
C) income decreases.
D) the good’s own price rises.
66) Which of the following decreases the demand for an inferior good?
A) an increase in income
B) a decrease in the price of a complement
C) a decrease in income
D) an increase in the price of a substitute
67) If consumers’ incomes increase and the demand for bus rides decreases
A) bus rides are a normal good.
B) consumers are behaving irrationally.
C) bus rides are an inferior good.
D) none of the above.
68) Which of the following is TRUE?
A) For an inferior good, when income increases, the demand curve shifts leftward.
B) The demand curve for a good shifts leftward when the price of a substitute rises.
C) If consumers expect the price of a good will rise in the future, the demand curve shifts
leftward.
D) An increase in population shifts the demand curve for most goods leftward.
69) A normal good is a good for which demand
A) decreases when income increases.
B) increases when income increases.
C) decreases when population increases.
D) increases when population increases.
70) Inferior goods are those for which demand increases as
A) the price of a substitute falls.
B) the price of a substitute rises.
C) income decreases.
D) income increases.
71) By definition, an inferior good is a
A) want that is not expressed by demand.
B) normal substitute good.
C) good for which demand decreases when its price rises.
D) good for which demand decreases when income increases.
72) An inferior good is a good for which demand
A) decreases when income increases.
B) increases when income increases.
C) decreases when population increases.
D) increases when population increases.
73) Kelly graduates and her income increases by $25,000 a year. Other things remaining the
same, she increases the quantity of clothes she buys. For Kelly, clothes are ________.
A) an inferior good
B) a normal good
C) a substitute good
D) a complement good
74) Which of the following shifts the demand curve for movie downloads rightward?
A) a decrease in the price of downloading a movie
B) a 10 percent increase in people’s income if movie downloads are a normal good
C) a decrease in the price of cable television service
D) an increase in the quantity and quality of programming included in the basic cable television
service package
75) If macaroni and cheese is an inferior good, an increase in income will
A) not affect the demand for macaroni and cheese.
B) decrease the demand for macaroni and cheese.
C) increase the demand for macaroni and cheese.
D) create no income effect.
76) If macaroni and cheese is an inferior good, then a decrease in income will result in
A) an increase in the demand for macaroni and cheese.
B) a decrease in the demand for macaroni and cheese.
C) an increase in the supply of macaroni and cheese.
D) a decrease in the supply of macaroni and cheese.
77) Jeep Cherokees are a normal good. If people’s incomes increase, the direct result will be
A) an increase in the supply of the vehicles.
B) a decrease in the demand for the vehicles.
C) an increase in the demand for the vehicles.
D) Both answers A and C are correct.
78) Homer changes jobs and his new job pays him a higher income. Before he changed jobs,
Homer purchased 3 pounds of tuna and 2 pounds of chicken. After he changed jobs, Homer now
purchases 2 pounds of tuna and 3 pounds of chicken. For Homer
A) tuna is a normal good and chicken is an inferior good.
B) tuna is an inferior good and chicken is a normal good.
C) both tuna and chicken are normal goods.
D) both tuna and chicken are inferior goods.
79) If the demand for digital cameras increases when consumers’ income rise, then digital
cameras are
A) a normal good.
B) an inferior good.
C) a substitute good for video cameras.
D) a complement to video cameras.
80) When income increases, the demand curve for X shifts rightward and the demand curve for Y
shifts leftward. These shifts mean that
A) X and Y are complements.
B) X and Y both normal goods.
C) X is an inferior good and Y is a normal good.
D) X is a normal good and Y is an inferior good.
81) Georgine buys more sweaters when her income increases. For Georgine, sweaters are
A) a substitute.
B) a complement.
C) an inferior good.
D) a normal good.
82) Gruel is an inferior good. Hence, a decrease in people’s incomes
A) shifts the supply curve of gruel leftward.
B) decreases the quantity of gruel supplied.
C) shifts the demand curve for gruel rightward.
D) shifts the demand curve for gruel leftward.
83) An increase in the number of consumers
A) results only in a movement along the demand curve.
B) shifts the supply curve leftward.
C) shifts the demand curve rightward.
D) Both answers B and C are correct.
84) When economists speak of preferences as influencing demand, they are referring to
A) directly observable changes in prices and income.
B) an individual’s attitudes toward goods and services.
C) the excess of wants over the available supplies.
D) the availability of a good to all income classes.
85) A change in which of the following shifts the demand curve?
A) the number of sellers in the market
B) the price of the resources used to produce the product
C) the technology with which the product is produced
D) the tastes and preferences of consumers
86) An unusually warm winter shifts the
A) supply curve of gloves rightward.
B) supply curve of gloves leftward.
C) demand curve for gloves rightward.
D) demand curve for gloves leftward.
87) Which of the following does NOT shift the demand curve for broccoli?
A) an increase in the cost of fertilizer used to grow broccoli
B) a warning by the U.S. Surgeon General that broccoli causes schizophrenia
C) an increase in the price of spinach, a substitute for broccoli, because rodents gobbled up much
of this year’s spinach crop
D) a decrease in the price of spinach, a substitute for broccoli, because of a bumper crop of
spinach this year
88) Which of the following lists has variables that all shift a good’s demand curve?
A) price of the good, preferences, prices of substitution goods, income
B) income, preferences, number of buyers, price of complementary good
C) expectation of future price, price of the good, number of buyers, income
D) Both answers A and B are correct.
89) The price of the steel used to produce car engines increases. How does this price hike affect
the demand curve for cars?
A) The demand curve shifts leftward.
B) The demand curve shifts rightward.
C) The demand curve does not shift.
D) There is not enough information to tell how the change shifts the demand curve for cars.
90) The quantity demanded of a good or service is the quantity that a consumer
A) is willing to buy at a particular price during a given time period.
B) actually buys at a particular price during a given time period.
C) needs to buy at a particular price during a given time period.
D) should buy at a particular price during a given time period.
91) If the price of chocolate chip cookies rises, then
A) the demand curve for chocolate chip cookies shifts rightward.
B) the demand curve for chocolate chip cookies shifts leftward.
C) there is a movement downward along the demand curve for chocolate chip cookies.
D) there is a movement upward along the demand curve for chocolate chip cookies.
92) Which of the following leads to a movement along the demand curve for spinach but does
not shift the demand curve for spinach?
A) a rise in the price of spinach
B) a newly discovered health benefit from eating spinach
C) an increase in the price of broccoli, a substitute for spinach
D) an increase in income for all spinach lovers
93) A change in the price of a good
A) shifts the good’s demand curve and also causes a movement along it.
B) shifts the good’s demand curve but does not cause a movement along it.
C) does not shift the good’s demand curve but does cause a movement along it.
D) neither shifts the good’s demand curve nor causes a movement along it.
94) If shoes rise in price, the demand curve for shoes ________ and the quantity of shoes
demanded ________.
A) shifts leftward; decreases
B) shifts leftward; does not change
C) does not shift; decreases
D) does not shift; does not change
95) A decrease in quantity demanded because of an increase in price is represented by a
A) rightward shift of the demand curve.
B) leftward shift of the demand curve.
C) movement up and to the left along the demand curve.
D) movement down and to the right along the demand curve.
96) A change in which of the following alters buying plans for cars but does NOT shift the
demand curve for cars?
A) a 5 percent increase in people’s income
B) a 10 percent decrease in the price of car insurance
C) a 20 percent increase in the price of a car
D) an increased preference for walking rather than driving
97) Which of the following would NOT shift the demand curve for turkey?
A) an increase in income
B) a decrease in the price of ham
C) a change in people’s preferences for turkey
D) a change in the price of a turkey
98) The statement that “demand increases” means that there is a
A) movement to the right along a demand curve.
B) movement to the left along a demand curve.
C) rightward shift of the demand curve.
D) leftward shift of the demand curve.
99) Cable television companies must pay increased charges by the networks for the programs the
cable companies carry. As a result, the price of cable television rises. Thus
A) the demand curve for cable television service shifts rightward.
B) the demand curve for cable television service shifts leftward.
C) there is a movement down the demand curve for cable television to a higher quantity
demanded.
D) there is a movement up the demand curve for cable television to a smaller quantity demanded.
100) As the price of a pound of peanuts falls, the
A) demand for peanuts increases.
B) demand for peanuts decreases.
C) quantity of peanuts demanded increases.
D) Both answers A and C are correct.
101) For “an increase in the quantity demanded” but not “an increase in demand” to occur, there
must be a
A) rightward shift of the demand curve.
B) movement along the demand curve.
C) rightward shift of the demand curve and a movement along the demand curve.
D) Both answers B and C are correct.
102) If the price per bushel of apples increased from $7.00 to $8.00 because of a poor harvest,
the
A) demand for apples decreases.
B) quantity of apples demanded decreases.
C) quantity of apples supplied decreases.
D) Both answers A and B are correct.
103) Which of the following statements is CORRECT?
A) A change in the quantity demanded means a shift in the demand curve.
B) A change in demand means a movement along the demand curve.
C) A change in demand and change in quantity demanded means the same thing.
D) A change in demand means a shift in the demand curve while change in the quantity
demanded means a movement along the demand curve.
104) Which of the following best reflects an increase in quantity demanded and not an increase
in demand?
A) A college expects enrollment to increase, despite no change in the tuition.
B) Skiing becomes a fashionable winter sports activity.
C) The price of hair stylings falls.
D) Consumers expect lower prices next month for computers.
105) In the above figure, an increase in the quantity demanded is represented by a movement
from point d to
A) point b only.
B) point c only.
C) point a.
D) both points b and c.
106) The figure above shows the demand for fruit snacks. Which movement reflects an increase
in demand?
A) from point a to point e
B) from point a to point b
C) from point a to point c
D) from point a to point d
107) The figure above shows the demand for fruit snacks. Which movement reflects a decrease
in demand?
A) from point a to point e
B) from point a to point b
C) from point a to point c
D) from point a to point d
108) The figure above shows the demand for fruit snacks. Which movement reflects a decrease
in quantity demanded but NOT a decrease in demand?
A) from point a to point e
B) from point a to point b
C) from point a to point c
D) from point a to point d
109) The figure above shows the demand for fruit snacks. Which movement reflects how
consumers would react to an increase in the price of a non-fruit snack?
A) from point a to point e
B) from point a to point b
C) from point a to point c
D) from point a to point d
110) The figure above shows the demand for fruit snacks. Which movement reflects an increase
in the price of a substitute for fruit snacks?
A) from point a to point e
B) from point a to point b
C) from point a to point c
D) from point a to point d
111) The figure above shows the demand for fruit snacks. Which movement reflects an increase
in the price of a complement for fruit snacks?
A) from point a to point e
B) from point a to point b
C) from point a to point c
D) from point a to point d
112) The figure above shows the demand for fruit snacks. Which movement reflects how
consumers would react to an increase in the price of a fruit snack that is expected to occur in the
future?
A) from point a to point e
B) from point a to point b
C) from point a to point c
D) from point a to point d
113) The figure above shows the demand for fruit snacks. Which movement reflects an increase
in income if fruit snacks are an inferior good?
A) from point a to point e
B) from point a to point b
C) from point a to point c
D) from point a to point d
114) The figure above shows the demand for fruit snacks. Which movement reflects an increase
in income if fruit snacks are a normal good?
A) from point a to point e
B) from point a to point b
C) from point a to point c
D) from point a to point d
115) The figure above shows the demand for fruit snacks. Which movement reflects a decrease
in population?
A) from point a to point e
B) from point a to point b
C) from point a to point c
D) from point a to point d
116) Consider the demand curves for soft drinks shown in the figure above. Moving from point a
to point c means that
A) the marginal benefit of each additional soft drink falls.
B) the opportunity cost of another soft drink increases.
C) people’s incomes have decreased.
D) the price of a soft drink has increased.
117) Consider the demand curves for soft drinks shown in the figure above. Suppose the
economy is at point a. An increase in the price of a soda results in a movement to a point such as
A) none of the points illustrated.
B) b.
C) c.
D) d.
118) Consider the demand curves for soft drinks shown in the figure above. Suppose the
economy is at point a. Which of the following could result in a movement to point c?
A) a decrease in income
B) an increase in the relative price of a soft drink
C) a decrease in the relative price of a soft drink
D) a decrease in the price of bottled water
119) Consider the demand curves for soft drinks shown in the figure above. Suppose the
economy is at point a. Which of the following could result in a movement to point d?
A) a decrease in income
B) an increase in the relative price of a soft drink
C) a decrease in the relative price of a soft drink
D) a decrease in the price of bottled water
120) Consider the demand curves for soft drinks shown in the figure above. Suppose the
economy is at point a. What of the following could result in a movement to point b?
A) an increase in the price of bottled water
B) a decrease in the price of bottled water
C) an increase in the opportunity cost of soft drinks
D) a decrease in the relative price of a soft drink
121) Consider the demand curves for soft drinks shown in the figure above. Initially the
economy is at point a. If people come to expect that the price of a soft drink will increase in the
future, there will be a movement to a point such as
A) none of the points illustrated.
B) b.
C) c.
D) d.
122) Consider the demand curves for soft drinks shown in the figure above. A movement from
point a to point c represents
A) a decrease in quantity demanded.
B) an increase in demand.
C) an increase in quantity demanded.
D) a decrease in demand.
123) Consider the demand curves for soft drinks shown in the figure above. A movement from
point a to point b represents
A) a decrease in quantity demanded.
B) an increase in demand.
C) an increase in quantity demanded.
D) a decrease in demand.
124) The law of demand concludes that a rise in the price of a golf ball ________ the quantity
demanded and ________.
A) increases; shifts the demand curve for golf balls rightward
B) decreases; shifts the demand curve for golf balls leftward
C) decreases; creates a movement up along the demand curve for golf balls
D) increases; creates a movement down along the demand curve for golf balls
125) If a decrease in the price of gasoline increases the demand for large cars, then
A) gasoline and large cars are substitutes in consumption.
B) gasoline and large cars are complements in consumption.
C) gasoline is an inferior good.
D) large cars are an inferior good.
126) A normal good is one
A) with a downward sloping demand curve.
B) for which demand increases when the price of a substitute rises.
C) for which demand increases when income increases.
D) none of the above
127) Some sales managers are talking shop. Which of the following quotations refers to a
movement along the demand curve?
A) “Since our competitors raised their prices our sales have doubled.”
B) “It has been an unusually mild winter; our sales of wool scarves are down from last year.”
C) “We decided to cut our prices, and the increase in our sales has been remarkable.”
D) none of the above
128) A recession occurs and people’s incomes decrease. Knowing that an iPad is a normal good,
you predict that the demand for an iPad
A) increases.
B) decreases.
C) might increase or decrease.
D) remains unchanged.
3 Supply
1) Which of the following is NOT one of the factors that influences the supply of a product?
A) technology
B) income
C) number of suppliers
D) expected future prices
2) The quantity of CDs that firms plan to sell this month depends on all of the following
EXCEPT the
A) number of producers of CDs.
B) quantity of CDs that people plan to buy.
C) wage rate of workers who produce CDs.
D) price of a CD.
3) The quantity supplied of a good is
A) the same thing as the quantity demanded at each price.
B) the amount that the producers are planning to sell at a particular price during a given time
period.
C) equal to the difference between the quantity available and the quantity desired by all
consumers and producers.
D) the amount the firm would sell if it faced no resource constraints.
4) The quantity supplied of a good or service is the amount that
A) producers wish they could sell at a higher price.
B) is actually bought during a given time period at a given price.
C) people are willing to buy during a given time period at a given price.
D) producers plan to sell during a given time period at a given price.
5) The quantity supplied of a good or service is the quantity that a producer ________ at a
particular price during a given time period.
A) is willing to sell
B) actually sells
C) needs to sell
D) should sell