Question 1

In January,buyers of gold expect that the price of gold will fall in February.What happens in the gold market in January,holding everything else constant?

Accepted Answer

When buyers of gold expect the price of gold to fall, they will decrease the quantity demanded in anticipation of a lower price in the future. This results in a leftward shift of the demand curve.

Question 2

Which of the following has occurred as the millennial generation has come of age?

Accepted Answer

The demand for traditional fast food has decreased in the U.S. market as millennials are seeking healthier and more diverse food options. Studies show that millennials prefer fresh and organic food over traditional fast food. Therefore, option C is the correct answer. Option A and B are incorrect as they do not align with the current market trends.

Question 3

Suppose that when the price of ice cream increases,Liza decreases her purchase of hot fudge.To Liza

Accepted Answer

When the price of ice cream increases, Liza would decrease her purchase of hot fudge, indicating that ice cream and hot fudge are complements. This means that the two goods are typically consumed together, and an increase in the price of one will lead to a decrease in the consumption of the other.

Question 4

Buyers scrambled to secure stocks of Australian wool following a forecast of an 11 percent decline in wool production.What happens in the Australian wool market as a result of this announcement?

Accepted Answer

The announcement of an 11 percent decline in wool production creates a perception of scarcity in the Australian wool market, which triggers an increase in demand for the product. Buyers scramble to secure stocks of Australian wool, anticipating higher prices in the future due to the limited supply. This increase in demand shifts the demand curve for Australian wool to the right. Therefore, the best choice is B, as the demand curve for Australian wool shifts to the right in anticipation of higher prices in the future.

Question 5

Technological advancements have led to lower prices and an increase in the sale of color laser printers.How does this affect the market for traditional inkjet printers?

Accepted Answer

The decrease in prices and increased sales of color laser printers make them more attractive to consumers, leading to a decrease in demand for traditional inkjet printers, thus shifting the demand curve to the left.

Question 6

Several studies have shown promising links between green tea consumption and cancer prevention.How does this affect the market for green tea?

Accepted Answer

The promising links between green tea consumption and cancer prevention can potentially increase the demand for green tea, as consumers may be more inclined to purchase and consume green tea due to its health benefits. This would result in a rightward shift of the demand curve for green tea, as more people are willing to purchase green tea at every price point.

Question 7

Suppose that when the price of oranges decreases,Sarita decreases her purchases of peaches.To Sarita

Accepted Answer

When the price of oranges decreases, Sarita decreases her purchases of peaches, which indicates that she substitutes oranges for peaches. Therefore, oranges and peaches are substitutes.

Question 8

Using Richard Tedlow's "three phases of marketing," the premium bottled water industry is probably in

Accepted Answer

The premium bottled water industry is likely in the second phase of marketing, where one or a few brands have attained high market shares by selling a large number of bottles of premium water at lower prices. This phase is characterized by the dominance of a few key players in the market.

Question 9

In September,buyers of silver expect that the price of silver will rise in October.What happens in the silver market in September,holding all else constant?

Accepted Answer

If buyers expect the price of silver to rise in October, this creates a higher demand for silver in the present. This shifts the demand curve to the right, indicating an increase in quantity demanded at each price level.

Question 10

Table 3-2
 
-Refer to Table 3-2.The table above shows the demand schedules for cashews of two individuals (Jordy and Amy)and the rest of the market.At a price of $6,the quantity demanded in the market would be

Accepted Answer

At a price of $6, Jordy demands 3 lbs, Amy demands 4 lbs, and the rest of the market demands 96 lbs. Adding these together (3 + 4 + 96) gives a total of 103 lbs.

Question 11

How does the increasing use of digital cameras affect the market for traditional camera film?

Accepted Answer

The increasing use of digital cameras reduces the need for traditional camera film, leading to a decrease in demand. This is represented by a leftward shift in the demand curve for traditional camera film.

Question 12

If the price of gasoline increases,what will be the impact in the market for public transportation?

Accepted Answer

When the price of gasoline increases, people are more likely to use public transportation as an alternative, causing the demand curve for public transportation to shift to the right.

Question 13

How does the decreasing use of DVD players affect the market for prerecorded DVDs?

Accepted Answer

The decreasing use of DVD players means that fewer people are able to play DVDs, which will lead to a decrease in the demand for prerecorded DVDs. As a result, the demand curve for prerecorded DVDs will shift to the left.

Question 14

If virtual reality headsets are considered substitutes for game consoles,then a decline in the price of game consoles would,all else equal

Accepted Answer

If the price of game consoles decline, it would make game consoles relatively cheaper compared to virtual reality headsets. This would lead consumers to consume more of game consoles rather than substituting it with virtual reality headsets, leading to decrease in demand for virtual reality headsets.

Question 15

Technological advancements have led to lower prices and an increase in the sale of color laser printers.How does this affect the market for laser printer ink cartridges?

Accepted Answer

When the price of color laser printers decreases and their sales increase, more people will own these printers, leading to an increase in the demand for complementary goods like laser printer ink cartridges. This shifts the demand curve for ink cartridges to the right.

Question 16

Factory incentives on cell phones have encouraged consumers to upgrade their phones.How does this affect the market for bluetooth headsets?

Accepted Answer

Factory incentives on cell phones encourage more people to upgrade their phones, which means there will be more demand for bluetooth headsets as users upgrade their devices and seek out compatible accessories. As a result, the demand for bluetooth headsets increases.

Question 17

Which of the following generation categories has the smallest population in the United States in 2017?

Accepted Answer

The answer of Which of the following generation categories has...

Question 18

If the price of train tickets decreases,what will be the impact in the market for bus travel?

Accepted Answer

When the price of train tickets decreases, trains become a more attractive option compared to buses, leading to a decrease in the demand for bus travel. This is represented by a leftward shift in the demand curve for bus travel.

Question 19

If virtual reality headsets are considered substitutes for game consoles,an increase in the price of virtual reality headsets would,all else equal,

Accepted Answer

When the price of a substitute good (like virtual reality headsets) increases, consumers are likely to shift their demand to the other good (game consoles), thus increasing the demand for game consoles.

Question 20

Suppose that when the price of pickles decreases,Teddy increases his purchase of ketchup.To Teddy

Accepted Answer

When the price of pickles decreases, Teddy increases his purchase of ketchup, which means that pickles and ketchup are complements. This is because Teddy is buying more ketchup as a result of purchasing fewer pickles, indicating that he is using the ketchup to complement the pickles he is still purchasing. Hence, option A is the correct answer.

Quiz 3: Where Prices Come From: The Interaction of Demand and Supply