Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
1. A market:
2. Markets, viewed from the perspective of the supply and demand model:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
3. The law of demand states that, other things equal:
4. Graphically, the market demand curve is:
5. The demand curve shows the relationship between:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
6. Economists use the term “demand” to refer to:
7. The relationship between quantity supplied and price is _____ and the relationship between
quantity demanded and price is ____.
8. When the price of a product increases, a consumer is able to buy less of it with a given
money income. This describes the:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
9. A demand curve:
10. In presenting the idea of a demand curve, economists presume the most important variable
in determining the quantity demanded is:
11. An increase in the price of a product will reduce the amount of it purchased because:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
12. The income and substitution effects account for:
13. When the price of a product rises, consumers shift their purchases to other products whose
prices are now relatively lower. This statement describes:
14. When the price of a product falls, the purchasing power of our money income rises and
thus permits consumers to purchase more of the product. This statement describes:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
15. (Advanced analysis) The equation for the demand curve in the below diagram:
16. The construction of demand and supply curves assumes that the primary variable
influencing decisions to produce and purchase goods is:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
17. One reason that the quantity demanded of a good increases when its price falls is that the:
18. When the price of Nike soccer balls fell, Ronaldo purchased more Nike soccer balls and
fewer Adidas soccer balls. Which of the following best explains Ronaldo’s decision to buy
more Nike soccer balls?
19. Steve went to his favorite hamburger restaurant with $3, expecting to buy a $2 hamburger
and a $1 soda. When he arrived he discovered that hamburgers were on sale for $1, so Steve
bought two hamburgers and a soda. Steve’s response to the decrease in the price of
hamburgers is best explained by:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
20. A recent study found that an increase in the Federal tax on beer (and thus an increase in
the price of beer) would reduce the demand for marijuana. We can conclude that:
21. In the past few years, the demand for donuts has greatly increased. This increase in
demand might best be explained by:
22. Which of the following will not cause the demand for product K to change?
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
23. Which of the following would not shift the demand curve for beef?
24. In 2007, the price of oil increased, which in turn caused the price of natural gas to rise.
This can best be explained by saying that oil and natural gas are:
25. An economist for a bicycle company predicts that, other things equal, a rise in consumer
incomes will increase the demand for bicycles. This prediction assumes that:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
26. If two goods are complements:
27. DVD players and DVDs are:
28. If the demand curve for product B shifts to the right as the price of product A declines,
then:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
29. If the price of product L increases, the demand curve for close-substitute product J will:
30. Which of the following is most likely to be an inferior good?
31. Which of the following statements is correct?
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
32. A shift to the right in the demand curve for product A can be most reasonably explained
by saying that:
33. Which of the following will cause the demand curve for product A to shift to the left?
34. If X is a normal good, a rise in money income will shift the:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
35. If Z is an inferior good, an increase in money income will shift the:
36. College students living off-campus frequently consume large amounts of ramen noodles
and boxed macaroni and cheese. When they finish school and start careers, their consumption
of both goods frequently declines. This suggests that ramen noodles and boxed macaroni and
cheese are:
37. Other things equal, which of the following might shift the demand curve for gasoline to
the left?
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
39. The demand for most products varies directly with changes in consumer incomes. Such
products are known as:
40. Assume the demand curve for product X shifts to the right. This might be caused by:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
41. Digital cameras and memory cards are:
42. A decrease in the price of digital cameras will:
43. A normal good is one:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
44. If the demand for steak (a normal good) shifts to the left, the most likely reason is that:
45. If consumer incomes increase, the demand for product X:
46. If products A and B are complements and the price of B decreases the:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
47. If products C and D are close substitutes, an increase in the price of C will:
48. In constructing a demand curve for product X:
49. An inferior good is:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
50. Suppose an excise tax is imposed on product X. We expect this tax to:
51. An increase in the price of product A will:
52. Which of the following would most likely increase the demand for gasoline?
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
53. Suppose that tacos and pizza are substitutes, and that soda and pizza are complements. We
would expect an increase in the price of pizza to:
54. Refer to the above diagram. A decrease in demand is depicted by a:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
55. Refer to the above diagram. A decrease in quantity demanded is depicted by a:
56. When an economist says that the demand for a product has increased, this means that:
57. “In the corn market, demand often exceeds supply and supply sometimes exceeds
demand.” “The price of corn rises and falls in response to changes in supply and demand.” In
which of these two statements are the terms demand and supply being used correctly?