29) After the price of smartphone apps falls, Justin buys fewer flash drives but he buys a new
smartphone. For Justin
A) smartphone apps and flash drives are complements, and smartphone apps and smartphones
are substitutes.
B) smartphone apps, flash drives, and smartphones are all complements.
C) smartphone apps and flash drives are substitutes, and smartphone apps and smartphones are
complements.
D) smartphone apps, flash drives, and smartphones are not all complements.
30) An increase in demand for a good can be caused by
A) a decrease in the price of a substitute good.
B) a reduction in income if the good is a normal good.
C) a decrease in the price of a complementary good.
D) an increase in price of a complementary good.
31) We observe that people buy less steak and more potatoes when the price of steak relative to
potatoes increases. This indicates that steak and potatoes are
A) substitutes.
B) complements.
C) inferior goods.
D) unrelated goods.
32) Suppose a concert by Rihanna and a basketball game played by the Houston Rockets are
substitutes, then which of the following is TRUE?
A) If the price of a ticket to a Rockets game increases, then the demand for Rihanna tickets will
fall.
B) If the price of a ticket to a Rockets game decreases, then the demand for Rihanna tickets will
fall.
C) If the price of a ticket to a Rockets game increases, then the demand for Rihanna tickets will
remain unchanged.
D) The price of a ticket to a Rockets game will always equal the price of a ticket to a Rihanna
concert.
33) If two goods, J and K, are complements, then which of the following statements is FALSE?
A) They are consumed together.
B) An increase in the price of J causes the demand for K to rise.
C) When the quantity demanded of J increases, the demand for K increases.
D) A decrease in the price of K causes an increase in the demand for J.
34) Of the following, which is the least likely to be an example of substitute goods?
A) beer and pretzels
B) margarine and butter
C) beef and chicken
D) tea and coffee
35) Which of the following pairs of goods is LEAST likely to be a pair of complements?
A) gasoline and vehicles
B) coffee and sugar
C) beer and wine
D) razors and razor blades
36) Suppose we observe that the demand for eggs increases when people buy more potatoes. We
can conclude that eggs and potatoes are
A) inferior goods.
B) normal goods.
C) complements.
D) substitutes.
37) When the price of tablet devices decreased in the 2010s, there was an increase in the demand
for computing apps because tablet devices and computing apps are
A) substitute goods.
B) capital goods.
C) inferior goods.
D) complementary goods.
38) If the price of personal computers were to rise, then the demand for printers would decrease
because personal computers and printers are
A) complementary goods.
B) consumer goods.
C) inferior goods.
D) substitute goods.
39) In the above figure, when the price of Good B increases, the result can be shown by
A) the movement from D1 to D2 in Graph A.
B) the movement from D2 to D1 in Graph A.
C) the movement along D0 from P1 to P2.
D) the movement along D0 from P2 to P1.
40) In the above figure, an increase in income is best demonstrated by a
A) shift of D1 to D2 in Graph A, if good A is a normal good.
B) shift of D2 to D1 in Graph A, if good A is a normal good.
C) movement along D0 from P1 to P2 in Graph B.
D) movement along D0 from P2 to P1 in Graph B.
41) In the above figure, the demand curve for Good A shifts from D1 to D2 in Graph A when the
price of Good B changes from P1 to P2 in Graph B. We can conclude that
A) Good A and Good B are substitutes.
B) Good A and Good B are complements.
C) Good A is a normal good but Good B is an inferior good.
D) Good A and Good B are unrelated.
42) Suppose Good A is a normal good. Which of the following will increase the demand for
Good A?
A) an increase in the price of its substitutes
B) a lower expected future relative price of A
C) an increase in the price of its complements
D) a decrease in income
43) If the price of hot dogs increases, the demand for hot dog buns will
A) increase.
B) decrease.
C) remain constant.
D) shift to the right.
44) If the price of apples goes down, then the demand for pears will
A) increase, assuming apples and pears are substitutes.
B) decrease, assuming apples and pears are substitutes.
C) decrease, assuming apples and pears are complements.
D) remain constant, assuming apples and pears are related goods.
45) There is an increase in the demand for cookies when the price of coffee falls. Other things
constant, we can conclude that cookies and coffee are
A) substitute goods.
B) inferior goods.
C) independent goods.
D) complementary goods.
46) An decrease in demand is represented by a
A) shift of the demand curve to the left.
B) shift of the demand curve to the right.
C) movement down the demand curve.
D) movement up the demand curve.
47) Two goods are substitutes when
A) an increase in the price of one reduces the demand for the other.
B) an increase in the price of one raises the demand for the other.
C) the two goods are used together.
D) the two goods have the same price.
48) An increase in the price of wheat will lead to
A) an upward movement along the demand curve for wheat.
B) a leftward shift in the demand curve for wheat.
C) a rightward shift in the supply curve for wheat.
D) an increase in the quantity of wheat consumed.
49) A significant increase in the price of basketballs will most likely lead to
A) an increase in the demand for basketball shoes.
B) an inward shift in the demand for basketballs.
C) a movement along the demand curve for basketball shoes.
D) an inward shift in the demand for basketball shoes.
50) If the price of butter increases, the demand for margarine
A) will be unchanged.
B) will shift outward.
C) will shift inward.
D) will kink into an S-curve.
51) Sugar and coffee are complements. When the price of coffee decreases, the demand for sugar
A) will fall.
B) remains constant.
C) will shift outward.
D) will shift inward.
52) An expected future increase in the price of bananas may
A) increase the demand for bananas now.
B) decrease the demand for bananas now.
C) increase the supply of bananas now.
D) make bananas an inferior good.
53) An expected increase in the future price of automobiles will lead to
A) an outward shift in demand for automobiles today.
B) a reduction in the demand for gasoline today.
C) a movement down the demand schedule for automobiles.
D) no predictable impact on today’s demand for automobiles.
54) If consumers expect that the price of pretzels will decrease next week, what would happen
today?
A) Demand today for pretzels would decrease.
B) Demand today for pretzels would increase.
C) Demand today for pretzels would be unaffected.
D) Supply today of pretzels would decrease.
55) Which of the following will cause a movement along the demand curve for shoes?
A) an increase in the price of socks
B) an increase in income
C) an increase in the price of shoes
D) all of the above
56) Which of the following will NOT cause a shift in the demand for portable power banks?
A) a change in taste
B) a change in income
C) a change in the price of portable power banks
D) a change in the price of smartphones
57) With reference to the difference between a change in demand and a change in quantity
demanded, which of the following is TRUE?
A) If a good’s price goes down, then demand for the good will decrease.
B) If a good’s price goes down, then quantity demanded will increase.
C) If demand increases, then the demand curve will shift to the left.
D) If price rises and quantity demanded decreases, then the demand curve will shift to the left.
58) Which of the following does NOT cause a shift in demand?
A) change in income
B) change in tastes
C) change in the price of the good
D) change in the price of a related good
59) More cattle are found to have mad cow disease. As a result, consumer confidence in the
safety of beef is shaken. What would an economist predict will happen in the beef market?
A) As consumer preferences move away from beef, there is an upward movement along the beef
demand curve.
B) The demand curve will shift to the left.
C) The demand curve does not shift but consumers move to a point lower down the curve.
D) absolutely no change in either the quantity demand or the demand for beef
60) Suppose that a new study finds that eating more fish will improve a person’s health. As a
result
A) the demand for fish will fall.
B) the demand for fish will rise.
C) the price of fish will fall.
D) a smaller amount of fish will be purchased.
61) An increase in the number of consumers in a market would cause
A) an increase in quantity demanded.
B) an increase in quantity supplied.
C) an increase in demand.
D) an increase in supply.
62) A shift in demand occurs when
A) the price of that good changes.
B) the amount demanded of a good changes at each existing price.
C) there is a change in quantity demanded.
D) the price changes and the good is a normal good.
63) If a bottle of soda and bottled juice are substitutes, when the price of soda rises
A) demand for bottled juice rises.
B) demand for bottled juice falls.
C) quantity of bottled juice demanded falls.
D) quantity of bottled juice demanded rises.
64) When income falls
A) the demand for a normal goods rises.
B) the demand for an inferior goods rises.
C) there is a movement downward along the demand curve for a normal good.
D) there is a movement downward along the demand curve for an inferior good.
65) When income rises
A) demand for a normal good rises.
B) demand for a luxury good falls.
C) demand for an inferior good rises.
D) quantity of a normal good demanded rises.
66) Which of the following factors will lead to a shift in the demand curve?
A) changes in the costs of inputs
B) changes in technology
C) changes in the price of the good
D) changes in consumers’ tastes and preferences
67) The relationship between a change in the price of a complementary good and demand for
another complementary good is
A) positive.
B) negative.
C) inconclusive.
D) zero.
68) Assuming bottled water and cola are substitutes, if the price of bottled water rises
A) there is a movement along the demand curve for cola.
B) the demand curve for bottled water will shift to the right.
C) the demand curve for cola will shift to the right.
D) the demand curve for bottled water will shift to the left.
69) Suppose that today, consumers expect the price of bottled water to double in the future. Then
today the bottled water’s
A) demand curve will shift to the right.
B) demand curve will shift to the left.
C) supply curve will shift to the right.
D) supply curve will shift to the left.
70) A shift in the demand curve will occur when
A) supply shifts.
B) the price of an input used to produce the good changes.
C) consumers’ income changes.
D) the price of the product changes.
71) Suppose it is discovered that consumption of chocolate leads to a longer life. This
information would lead to
A) an increase in quantity demanded of chocolate.
B) an increase in demand for chocolate.
C) a decrease in quantity demanded of chocolate.
D) a decrease in demand for chocolate.
72) Which of the following causes a decrease in demand for a normal good?
A) increase in price of a substitute
B) increase in price of a complement
C) increase in price
D) increase in income
73) Which of the following causes an increase in demand for a normal good?
A) increase in the price of a substitute
B) increase in the price of a complement
C) decrease in price
D) decrease in income
74) Refer to the above figure. The rightward shift of the curve indicates
A) an increase in demand.
B) a decrease in demand.
C) an increase in quantity demanded.
D) a decrease in quantity demanded.
75) Refer to the above figure. For a normal good, the rightward shift of the curve could have
been caused by
A) a technological improvement.
B) an increase in the cost of inputs.
C) an increase in income.
D) a decrease in income.
76) Refer to the above figure. The arrows show the direction of a shift in the demand curve of
Good A. Which of the following would be the most likely reason for the shift in the demand
curve if Good A is an inferior good?
A) an increase in the price of Good A
B) a decrease in the price of Good A
C) a decrease in consumers’ income
D) an increase in consumers’ income
77) Refer to the above figure for a particular good. The rightward shift of the curve could have
been caused by
A) a decrease in the price of an input.
B) a decrease in the price of that good.
C) an increase in the price of a complementary good.
D) an increase in the price of a substitute good.
78) A shift of the demand curve to the left represents
A) an increase in demand.
B) a decrease in demand.
C) an increase in quantity demanded.
D) a decrease in quantity demanded.
79) Which of the following will NOT lead to an increase in demand for a normal good?
A) an increase in income
B) an increase in the price of an input
C) a decrease in the price of a complement good
D) an increase in the number of consumers
80) A shift in the demand curve to the right represents
A) an increase in demand.
B) a decrease in demand.
C) an increase in quantity demanded.
D) a decrease in quantity demanded.
81) An increase in demand occurs when
A) we measure price in money price rather than real price.
B) we move up the demand curve.
C) the demand curve shifts to the right.
D) the demand curve shifts to the left.
82) A decrease in demand would be represented by
A) the price of a good going up.
B) a downward movement along the demand curve.
C) an upward movement along the demand curve.
D) a shift of the demand curve to the left.
83) A normal good is one for which
A) demand increases as income increases.
B) demand increases as income decreases.
C) the demand curve is horizontal.
D) demand increases as the price of a substitute increases.
84) As John’s income has increased, he has purchased less instant noodles. Instant noodles are
A) a normal good for John.
B) an inferior good for John.
C) not following the law of demand.
D) not scarce for John.
85) Refer to the above figure. A movement from point A to point B indicates
A) an increase in demand.
B) a decrease in demand.
C) an increase in quantity demanded.
D) a decrease in quantity demanded.
86) Refer to the above figure. A movement from Point A to Point B is caused by
A) an increase in income.
B) an expectation of a decrease in the price of the good in that figure.
C) a decrease in the price of the good in that figure.
D) all of the above.
87) Refer to the above figure. Which of the following statements is TRUE?
A) Panel A shows a decrease in demand and Panel B shows an increase in demand.
B) Both Panels A and B show an increase in demand.
C) Panel A shows a change in demand and Panel B shows a change in quantity demanded.
D) Panel A shows a change in quantity demanded and Panel B shows a change in demand.
88) Refer to the above figure. Which panel shows the effect of an increase in the price of a good
on the demand curve of that good?
A) Panel A
B) Panel B
C) both panels
D) neither panel
89) A change in quantity demanded
A) is a shift of the demand curve.
B) is a movement along the demand curve.
C) can be either a shift or a movement along the demand curve.
D) is caused when there is a change in a ceteris paribus factor.
90) A change in any of the ceteris paribus conditions for demand leads to a
A) a good going from an inferior good to a normal good.
B) movement along the demand curve.
C) shift of the demand curve.
D) change in supply.
91) Matt graduates from college and gets a job paying $70,000 a year. While in school, he
consumed 5 pounds of chicken and 10 pounds of shrimp a month. After he starts working, he
consumes 4 pounds of chicken and 12 pounds of shrimp a month. If everything else is held
constant, we know that
A) chicken and shrimp are normal goods for Matt.
B) chicken is an inferior good and shrimp is a normal good for Matt.
C) chicken is an inferior good for Matt.
D) shrimp is a normal good for Matt.
92) After the price of milk increases, Susan buys more eggs and less hotdogs. For Susan
A) milk, eggs, and hotdogs are all complements.
B) milk and eggs are complements, and milk and hotdogs are substitutes.
C) milk and eggs are substitutes, and milk and hotdogs are complements.
D) milk, eggs, and hotdogs are all substitutes.
93) When a rise in the price of one item results in a decrease in the demand for another good,
then the two goods are
A) substitute goods.
B) complementary goods.
C) inferior goods.
D) satisfying the law of supply.
94) An increase in quantity demanded of a good is caused by
A) a decrease in income.
B) a decrease in the price of a substitute.
C) a decrease in the price of the good.
D) a change of tastes.
95) Larry decreases his consumption of grapes after his income goes up. For Larry
A) grapes and income are substitute goods.
B) grapes and income are complementary goods.
C) grapes are an inferior good.
D) grapes are a superior good.
96) Mary increases her consumption of Good X after the price of Good Y decreased. For Mary
A) Good X and Good Y are substitutes.
B) Good X and Good Y are complements.
C) Good X is an inferior good.
D) Good Y is an inferior good.
97) Ashley decreases her consumption of Good A after the price of Good B decreased. For
Ashley
A) Good A and Good B are substitutes.
B) Good A and Good B are complements.
C) Good A is an inferior good.
D) Good B is an inferior good.
98) John increases his consumption of Good X and Good Y when his income increases. For John
A) Good X and Good Y are substitute goods.
B) Good X and Good Y are complement goods.
C) Good X is an inferior good.
D) Good X and Y are normal goods
99) All of the following are non-price determinants of demand EXCEPT
A) price of related goods.
B) price of raw materials used in production of the good.
C) income.
D) number of consumers.
100) Assuming that turkey, chicken, pork, and beef are substitutes, suppose that the price of
turkey has fallen. This will, other things being equal
A) reduce demand for chicken, pork, and beef.
B) leave demand for chicken, pork, and beef unchanged.
C) increase demand for chicken, pork, and beef.
D) increase quantity demanded of beef.
101) Which factor would cause a movement along the demand curve for pizza?
A) an increase in the number of students in town
B) a renewed preference for Italian food
C) a drop in the price of pizza
D) an increase in average income