Question 1

A movement upward and to the left along a demand curve is called a(n)
A)increase in demand.
B)decrease in demand.
C)decrease in quantity demanded.
D)increase in quantity demanded.

Accepted Answer

The answer of A movement upward and to the left...

Question 2

An increase in quantity demanded
A)results in a movement downward and to the right along a demand curve.
B)results in a movement upward and to the left along a demand curve.
C)shifts the demand curve to the left.
D)shifts the demand curve to the right.

Accepted Answer

An increase in quantity demanded means that consumers are willing to buy more of a product at the same price. This results in a movement down the demand curve, as they are willing to buy more at each price level.

Question 3

The law of demand states that, other things equal, an increase in
A)price causes quantity demanded to increase.
B)price causes quantity demanded to decrease.
C)quantity demanded causes price to increase.
D)quantity demanded causes price to decrease.

Accepted Answer

The law of demand states that, all other things being equal, when the price of a good or service increases, the quantity of goods or services demanded by consumers will decrease, and when the price of a good or service decreases, the quantity demanded by consumers will increase. Hence, an increase in price causes quantity demanded to decrease.

Question 4

The law of demand states that, other things equal, when the price of a good
A)falls, the demand for the good rises.
B)rises, the quantity demanded of the good rises.
C)rises, the demand for the good falls.
D)falls, the quantity demanded of the good rises.

Accepted Answer

The answer of The law of demand states that, other...

Question 5

Figure 4-16 
-Refer to Figure 4-16. The shift from S' to S in the market for chocolate cake could be caused by a(n)
A)decrease in the number of commercial bakers.
B)improvement in oven technology.
C)decrease in the price of butter.
D)decrease in the price of chocolate cake.

Accepted Answer

The answer of Figure 4-16 
-Refer to Figure 4-16. The...

Question 6

Figure 4-1 
-Refer to Figure 4-1. It is apparent from the figure that the
A)good is inferior.
B)demand for the good decreases as income increases.
C)demand for the good conforms to the law of demand.
D)All of the above are correct.

Accepted Answer

The downward slope of the demand curve in the figure indicates that the demand for the good conforms to the law of demand, which states that as the price of a good increases, the quantity demanded of that good decreases. There is no information in the figure to suggest that the good is inferior or that the demand for the good decreases as income increases, so options A and B are incorrect.

Question 7

Figure 4-16 
-Refer to Figure 4-16. If the supply curves that are drawn represent supply curves for single-family residential houses, then the movement from S to S' could be caused by a(n)
A)increase in the price of apartments which are a substitute for single-family houses for many people looking for a place to live.
B)newly-formed expectation by house-builders that prices of houses will increase significantly in the next six months.
C)decrease in the price of lumber.
D)All of the above are correct.

Accepted Answer

The answer of Figure 4-16 
-Refer to Figure 4-16. If...

Question 8

"Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises." This relationship between price and quantity demanded
A)applies to most goods in the economy.
B)is represented by a downward-sloping demand curve.
C)is referred to as the law of demand.
D)All of the above are correct.

Accepted Answer

The statement describes the basic principle of the law of demand, which applies to most goods in the economy and is represented by a downward-sloping demand curve. Thus, all of the above choices are correct.

Question 9

An increase in the price of a good will
A)increase demand.
B)decrease demand.
C)increase quantity demanded.
D)decrease quantity demanded.

Accepted Answer

When the price of a good increases, consumers will typically buy less of that good, resulting in a decrease in the quantity demanded. This is a movement along the demand curve, rather than a shift of the entire curve, which would be necessary for an increase or decrease in demand. Therefore, the correct answer is D, decrease quantity demanded.

Question 10

A decrease in quantity demanded
A)results in a movement downward and to the right along a demand curve.
B)results in a movement upward and to the left along a demand curve.
C)shifts the demand curve to the left.
D)shifts the demand curve to the right.

Accepted Answer

The answer of A decrease in quantity demanded
A)results in a...

Question 11

Figure 4-16 
-Refer to Figure 4-16. The shift from S to S' could be caused by an
A)increase in the price of the good.
B)improvement in production technology.
C)increase in income.
D)increase in input prices.

Accepted Answer

An improvement in production technology would allow the producer to produce more output at any given level of input, shifting the supply curve outwards from S to S'. An increase in the price of the good (A) or input prices (D) would shift the supply curve inwards, while an increase in income (C) would have no effect on the supply curve.

Question 12

When the price of a good or service changes,
A)the supply curve shifts in the opposite direction.
B)the demand curve shifts in the opposite direction.
C)the demand curve shifts in the same direction.
D)there is a movement along a given demand curve.

Accepted Answer

When the price of a good or service changes, there is a movement along a given demand curve. This is because quantity demanded changes in response to the price change, but the other determinants of demand remain constant. The supply curve may also move, but only in response to changes in factors affecting supply such as input costs or technology.

Question 13

Figure 4-16 
-Refer to Figure 4-16. The shift from S to S' is called a(n)
A)decrease in supply.
B)decrease in quantity supplied.
C)increase in supply.
D)increase in quantity supplied.

Accepted Answer

The shift from S to S' shows an increase in supply because at any given price, there is now a greater quantity supplied than before, represented by the shift of the supply curve to the right.

Question 14

Figure 4-16 
-Refer to Figure 4-16. The shift from S to S' in the market for peaches could be caused by a(n)
A)increase in the price of peaches.
B)decrease in the price of pears.
C)increase in income.
D)decrease in the labor costs of the workers who pick peaches.

Accepted Answer

The answer of Figure 4-16 
-Refer to Figure 4-16. The...

Question 15

A movement downward and to the right along a demand curve is called a(n)
A)increase in demand.
B)decrease in demand.
C)decrease in quantity demanded.
D)increase in quantity demanded.

Accepted Answer

The answer of A movement downward and to the right...

Question 16

A decrease in the price of a good would
A)increase the supply of the good.
B)increase the quantity demanded of the good.
C)give producers an incentive to produce more to keep profits from falling.
D)shift the supply curve for the good to the left.

Accepted Answer

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

Question 17

The quantity demanded of a good is the amount that buyers are
A)willing to purchase.
B)willing and able to purchase.
C)willing, able, and need to purchase.
D)able to purchase.

Accepted Answer

The quantity demanded of a good is the amount that buyers are both willing and able to purchase. While some buyers may need to purchase a good, their ability to purchase depends on their income or other factors, making willingness and ability the most accurate indicators of demand.

Question 18

Figure 4-1 
-Refer to Figure 4-1. The movement from point A to point B on the graph shows a(n)
A)decrease in demand.
B)increase in demand.
C)decrease in quantity demanded.
D)increase in quantity demanded.

Accepted Answer

The answer of Figure 4-1 
-Refer to Figure 4-1. The...

Question 19

Figure 4-1 
-Refer to Figure 4-1. The movement from point A to point B on the graph is caused by a(n)
A)increase in price.
B)decrease in price.
C)decrease in the price of a substitute good.
D)increase in income.

Accepted Answer

The movement from point A to point B on the graph represents an increase in quantity demanded, which occurs in response to a decrease in price. Therefore, the correct choice is B, decrease in price.

Question 20

A decrease in the price of a good will
A)increase demand.
B)decrease demand.
C)increase quantity demanded.
D)decrease quantity demanded.

Accepted Answer

According to the law of demand, as the price of a good decreases, the quantity demanded will increase. However, the overall demand for the good may or may not increase depending on various factors such as price elasticity of demand, consumer income, availability of substitutes, etc.

Quiz 4: The Market Forces of Supply and Demand

A movement upward and to the left along a demand curve is called a(n)

An increase in quantity demanded

The law of demand states that, other things equal, an increase in

The law of demand states that, other things equal, when the price of a good

Figure 4-16 -Refer to Figure 4-16. The shift from S' to S in the market for chocolate cake could be caused by a(n)

Figure 4-1 -Refer to Figure 4-1. It is apparent from the figure that the

Figure 4-16 -Refer to Figure 4-16. If the supply curves that are drawn represent supply curves for single-family residential houses, then the movement from S to S' could be caused by a(n)

"Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises." This relationship between price and quantity demanded

An increase in the price of a good will

A decrease in quantity demanded

Figure 4-16 -Refer to Figure 4-16. The shift from S to S' could be caused by an

When the price of a good or service changes,

Figure 4-16 -Refer to Figure 4-16. The shift from S to S' is called a(n)

Figure 4-16 -Refer to Figure 4-16. The shift from S to S' in the market for peaches could be caused by a(n)

A movement downward and to the right along a demand curve is called a(n)

A decrease in the price of a good would

The quantity demanded of a good is the amount that buyers are

Figure 4-1 -Refer to Figure 4-1. The movement from point A to point B on the graph shows a(n)

Figure 4-1 -Refer to Figure 4-1. The movement from point A to point B on the graph is caused by a(n)

A decrease in the price of a good will