Question 1

Suppose that when the price of blueberries increases, Lonnie increases his purchases of bananas.To Lonnie,
A)blueberries and bananas are complements.
B)blueberries and bananas are inferior goods.
C)blueberries and bananas are normal goods.
D)blueberries and bananas are substitutes.

Accepted Answer

When the price of blueberries increases, Lonnie substitutes blueberries for bananas, indicating that blueberries and bananas are substitutes.

Question 2

An online bookseller has created a new category, known as the 'barely used' book, in the book selling market.How does the availability of 'barely used' books affect the market for new books?
A)The demand curve for new books shifts to the right.
B)The demand curve for new books shifts to the left.
C)The supply curve for new books shifts to the right.
D)The supply curve for new books shifts to the left.

Accepted Answer

The availability of 'barely used' books creates a substitute for new books, which reduces the demand for new books. As a result, the demand curve for new books shifts to the left, meaning fewer new books will be sold at any given price.

Question 3

Figure 3.1 -Refer to Figure 3.1.If the product represented is a normal good, a decrease in income would be represented by a movement from: A)A to B B)B to A C)D₁ to D₂ D)D₂to D₁

Accepted Answer

D₂ represents the initial budget constraint with the initial level of income, while D₁ represents the new budget constraint with the decreased level of income. The movement from D₂ to D₁ represents a decrease in income, which would result in a decrease in the quantity demanded of a normal good, as shown by the shift from point A to point B on the demand curve. Therefore, the correct choice is D.

Question 4

If bottled water is considered substitutes for soda, the decline in the price of bottled water would, all else equal,
A)increase the demand for soda.
B)decrease the demand for soda.
C)increase the quantity demanded for soda.
D)decrease the quantity demanded for soda.

Accepted Answer

Bottled water is a substitute for soda, meaning consumers may choose to buy bottled water instead of soda to quench their thirst. As the price of bottled water decreases, consumers are more likely to choose bottled water over soda, leading to a decrease in the demand for soda.

Question 5

Technological advancements have led to lower prices and an increase in the sale of digital cameras.How does this affect the digital photo printing paper market?
A)The demand curve for digital photo printing paper shifts to the right.
B)The demand curve for digital photo printing paper shifts to the left.
C)The supply curve for digital photo printing paper shifts to the right.
D)The supply curve for digital photo printing paper shifts to the left.

Accepted Answer

As more people buy digital cameras due to technological advancements and lower prices, they are likely to print more digital photos, increasing the demand for digital photo printing paper. This scenario causes the demand curve for digital photo printing paper to shift to the right.

Question 6

Studies have shown links between calcium consumption and a reduction in osteoporosis.How does this affect the market for calcium?
A)The calcium supply curve shifts to the right because of a change in tastes in favour of calcium.
B)The calcium demand curve shifts to the right because of a change in tastes in favour of calcium.
C)The calcium demand curve shifts to the left because this new information will increase the price of calcium.
D)The calcium supply curve shifts to the left because this new information will increase the price of calcium.

Accepted Answer

The information about the link between calcium consumption and a reduction in osteoporosis will likely increase the demand for calcium, as consumers become more aware of its health benefits. This would shift the calcium demand curve to the right, indicating an increase in the quantity of calcium demanded at any given price.

Question 7

In June, buyers of titanium expect that the price of titanium will fall in July.What happens in the titanium market in June, holding everything else constant?
A)The demand curve shifts to the right.
B)The quantity demanded increases.
C)The quantity demanded decreases
D)The demand curve shifts to the left.

Accepted Answer

If buyers expect the price of titanium to fall in July, they will likely delay their purchases until then, causing a decrease in the quantity demanded in June. This will shift the demand curve to the left.

Question 8

Figure 3.1 -Refer to Figure 3.1.A decrease in taste or preference would be represented by a movement from: A)A to B B)B to A C)D₁ to D₂ D)D₂to D₁

Accepted Answer

The answer of Figure 3.1 
-Refer to Figure 3.1.A decrease...

Question 9

Technological advances have resulted in lower prices for digital cameras.What is the impact of this on the market for traditional (non-digital)cameras?
A)The demand curve for traditional cameras shifts to the right.
B)The supply curve for traditional cameras shifts to the right.
C)The demand curve for traditional cameras shifts to the left.
D)The supply curve for traditional cameras shifts to the left.

Accepted Answer

The lower prices of digital cameras make them more attractive to consumers, leading to a decrease in demand for traditional cameras. As a result, the demand curve for traditional cameras shifts to the left.

Question 10

Suppose that when the price of hamburgers decreases, the Ruiz family increases their purchases of ketchup.To the Ruiz family,
A)hamburgers and ketchup are complements.
B)hamburgers and ketchup and substitutes.
C)hamburgers and ketchup are normal goods.
D)hamburgers are normal goods and hot dogs are inferior goods.

Accepted Answer

When the price of hamburgers decreases, the Ruiz family increases their purchases of ketchup, indicating that hamburgers and ketchup are complements.

Question 11

Tomas increased his consumption of potato chips when the price of pistachios increased.For Tomas, potato chips and pistachios are:
A)substitutes in consumption.
B)both inferior goods.
C)complements in consumption.
D)both luxury goods.

Accepted Answer

When the price of one good (pistachios) increases, the consumer will switch to consuming more of another similar good (potato chips) instead, indicating that they are substitutes in consumption.

Question 12

If the price of music downloads was to decrease, then________.
A)the demand for MP3 players would decrease.
B)the demand for MP3 players would increase.
C)the supply of MP3 players would increase.
D)the quantity demanded of MP3 players would decrease.

Accepted Answer

If the price of music downloads decreases, it would make it more affordable for consumers to purchase and download music. This would likely lead to an increase in demand for MP3 players, as more people would have music they want to listen to on-the-go. Therefore, choice B is the best answer. Choice A is incorrect because the demand for MP3 players would likely increase, not decrease. Choice C is incorrect because the supply of MP3 players is not directly related to the price of music downloads. Choice D is incorrect because it refers to the quantity demanded of MP3 players, which is different from the demand for MP3 players as a whole.

Question 13

Figure 3.1 -Refer to Figure 3.1.An increase in the expected future price of the product would be represented by a movement from: A)A to B B)B to A C)D₁ to D₂ D)D₂to D₁

Accepted Answer

An increase in the expected future price of the product would cause the demand curve to shift to the right, from an initial demand curve to a new, higher demand curve, indicating an increase in demand at each price level.

Question 14

Figure 3.1 -Refer to Figure 3.1.If the product represented is an inferior good, an increase in income would be represented by a movement from: A)A to B B)B to A C)D₁ to D₂ D)D₂to D₁

Accepted Answer

The answer of Figure 3.1 
-Refer to Figure 3.1.If the...

Question 15

Figure 3.1 -Refer to Figure 3.1.A decrease in the price of a complementary good would be represented by a movement from: A)A to B B)B to A C)D₁ to D₂ D)D₂to D₁

Accepted Answer

The answer of Figure 3.1 
-Refer to Figure 3.1.A decrease...

Question 16

Figure 3.1 -Refer to Figure 3.1.A decrease in the price of the product would be represented by a movement from: A)A to B B)B to A C)D₁ to D₂ D)D₂to D₁

Accepted Answer

The answer of Figure 3.1 
-Refer to Figure 3.1.A decrease...

Question 17

Figure 3.1 -Refer to Figure 3.1.Which movement reflects a decrease in the price of a substitute good? A)A to B B)B to A C)D₁ to D₂ D)D₂to D₁

Accepted Answer

The movement from D₂ to D₁ reflects a decrease in the price of a substitute good, as it causes a shift from point A to point B on the demand curve.

Question 18

Elle decreased her consumption of bananas when the price of peanut butter increased.For Elle, peanut butter and bananas are:
A)substitutes in consumption.
B)both inferior goods.
C)complements in consumption.
D)both luxury goods.

Accepted Answer

Elle's decrease in banana consumption due to an increase in the price of peanut butter indicates that she views these goods as complements in consumption. This means she likely consumes them together, so when one becomes more expensive, she reduces her consumption of both.

Question 19

In January, buyers of gold expect that the price of gold will rise in February.What happens in the gold market in January, holding all else constant?
A)The supply curve shifts to the right.
B)The demand curve shifts to the left.
C)The demand curve shifts to the right.
D)The quantity demanded increases.

Accepted Answer

When buyers expect the price of gold to rise in the future, they will demand more gold in the present, which shifts the demand curve to the right. All else constant, this will lead to an increase in both price and quantity demanded in the gold market in January.

Question 20

How does the increasing use of e-books affect the market for hardcover books?
A)The demand curve for hardcover books shifts to the right.
B)The supply curve for hardcover books shifts to the left.
C)The supply curve for hardcover books shifts to the right.
D)The demand curve for hardcover books shifts to the left.

Accepted Answer

The increasing use of e-books provides a substitute for hardcover books, which decreases the demand for hardcover books. Therefore, the demand curve for hardcover books shifts to the left.

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

Suppose that when the price of blueberries increases, Lonnie increases his purchases of bananas.To Lonnie,

An online bookseller has created a new category, known as the 'barely used' book, in the book selling market.How does the availability of 'barely used' books affect the market for new books?

Figure 3.1 -Refer to Figure 3.1.If the product represented is a normal good, a decrease in income would be represented by a movement from:

If bottled water is considered substitutes for soda, the decline in the price of bottled water would, all else equal,

Technological advancements have led to lower prices and an increase in the sale of digital cameras.How does this affect the digital photo printing paper market?

Studies have shown links between calcium consumption and a reduction in osteoporosis.How does this affect the market for calcium?

In June, buyers of titanium expect that the price of titanium will fall in July.What happens in the titanium market in June, holding everything else constant?

Figure 3.1 -Refer to Figure 3.1.A decrease in taste or preference would be represented by a movement from:

Technological advances have resulted in lower prices for digital cameras.What is the impact of this on the market for traditional (non-digital) cameras?

Suppose that when the price of hamburgers decreases, the Ruiz family increases their purchases of ketchup.To the Ruiz family,

Tomas increased his consumption of potato chips when the price of pistachios increased.For Tomas, potato chips and pistachios are:

If the price of music downloads was to decrease, then________.

Figure 3.1 -Refer to Figure 3.1.An increase in the expected future price of the product would be represented by a movement from:

Figure 3.1 -Refer to Figure 3.1.If the product represented is an inferior good, an increase in income would be represented by a movement from:

Figure 3.1 -Refer to Figure 3.1.A decrease in the price of a complementary good would be represented by a movement from:

Figure 3.1 -Refer to Figure 3.1.A decrease in the price of the product would be represented by a movement from:

Figure 3.1 -Refer to Figure 3.1.Which movement reflects a decrease in the price of a substitute good?

Elle decreased her consumption of bananas when the price of peanut butter increased.For Elle, peanut butter and bananas are:

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

How does the increasing use of e-books affect the market for hardcover books?