Question 1

A decrease in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

Accepted Answer

The answer of A decrease in the price of a...

Question 2

An increase in the price of a substitute good will shift the demand curve for a good to the right.

Accepted Answer

When the price of a substitute good increases, consumers are likely to switch to the relatively cheaper good and demand for it will increase, shifting the demand curve for that good to the right.

Question 3

If the demand for a good falls when income falls, then the good is called an inferior good.

Accepted Answer

When the demand for a good falls as income falls, the good is considered a normal good, not an inferior good. Inferior goods see an increase in demand when income falls.

Question 4

A decrease in the price of a complement will shift the demand curve for a good to the left.

Accepted Answer

A decrease in the price of a complement will actually shift the demand curve for a good to the right. This is because cheaper complement goods will increase the demand for the related good.

Question 5

If orange juice and apple juice are substitutes, an increase in the price of orange juice will shift the demand curve for apple juice to the right.

Accepted Answer

If the price of orange juice increases, people may switch to consuming more apple juice as a substitute, resulting in an increase in the demand for apple juice, and hence a shift in the demand curve for apple juice to the right.

Question 6

If a determinant of demand other than price changes, the demand curve shifts.

Accepted Answer

When factors other than price affect the demand for a product, the demand curve shifts. These factors can include changes in consumer preferences, income levels, the availability of substitute products, and demographic shifts.

Question 7

The demand curve is the upward-sloping line relating price and quantity demanded.

Accepted Answer

The demand curve actually slopes downwards, indicating that as price increases, the quantity demanded decreases.

Question 8

If orange juice and apple juice are substitutes, an increase in the price of orange juice will shift the demand curve for apple juice to the left.

Accepted Answer

If orange juice and apple juice are substitutes, an increase in the price of orange juice would likely cause consumers to buy more apple juice instead, shifting the demand curve for apple juice to the right, not the left.

Question 9

An increase in demand shifts the demand curve to the left.

Accepted Answer

An increase in demand shifts the demand curve to the right.

Question 10

Baseballs and baseball bats are substitute goods.

Accepted Answer

Baseballs and baseball bats are complementary goods because they are used together; the demand for one increases when the demand for the other does.

Question 11

The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant.

Accepted Answer

The market demand curve shows how the total quantity demanded of a good varies as the price of the good varies, while all the other factors that affect how much consumers want to buy are held constant.

Question 12

If something happens to alter the quantity demanded at any given price, then the demand curve shifts.

Accepted Answer

If something happens to alter the quantity demanded, such as a change in consumer tastes or a shift in income levels, then the existing demand curve will no longer be accurate and a new demand curve must be drawn to represent the change in demand. This is known as a shift in the demand curve.

Question 13

Public service announcements, mandatory health warnings on cigarette packages, and the prohibition of cigarette advertising on television are all policies aimed at shifting the demand curve for cigarettes to the right.

Accepted Answer

These policies are aimed at shifting the demand curve for cigarettes to the left, not to the right. They are intended to decrease the demand for cigarettes by making them less desirable or by increasing public awareness of their dangers.

Question 14

When Mario's income decreases, he buys more pasta. For Mario, pasta is a normal good.

Accepted Answer

If Mario buys more pasta when his income decreases, it means that pasta is an inferior good for him, not a normal good.

Question 15

A movement upward and to the left along a given demand curve is called a decrease in demand.

Accepted Answer

A movement upward and to the left along a given demand curve is called a decrease in quantity demanded, not a decrease in demand. A decrease in demand would shift the entire demand curve to the left.

Question 16

An increase in the price of pizza will shift the demand curve for pizza to the left.

Accepted Answer

An increase in the price of pizza does not shift the demand curve; instead, it moves along the demand curve, typically leading to a decrease in the quantity demanded. A shift in the demand curve would be caused by factors other than the price of the good itself, such as changes in consumer income, preferences, or prices of related goods.

Question 17

Individual demand curves are summed vertically to obtain the market demand curve.

Accepted Answer

Individual demand curves are summed horizontally to obtain the market demand curve, as this process involves adding the quantities demanded by all individuals at each price level.

Question 18

A decrease in demand shifts the demand curve to the left.

Accepted Answer

When there is a decrease in demand for a product or service, meaning that consumers are buying less of the product or service at any given price, the demand curve shifts to the left. This is because at every price point, the quantity demanded is lower than before.

Question 19

When an increase in the price of one good lowers the demand for another good, the two goods are called complements.

Accepted Answer

This is the definition of complements. When the price of one good goes up, the demand for the other good decreases, indicating a complementary relationship between the two goods.

Question 20

A decrease in income will shift the demand curve for an inferior good to the right.

Accepted Answer

This is because as income decreases, individuals tend to purchase more inferior goods rather than premium goods, leading to an increase in demand for inferior goods.

Quiz 4: The Market Forces of Supply and Demand