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Quantity Demanded and Demand Practice Problems
1. Which of the following would NOT shift the demand curve for mp3 players?
a. A decrease in the price of mp3 players
b. A fad that makes mp3 players more popular
c. An increase in the price of CDs (a complement)
d. A decrease in the price of satellite radio (a substitute)
2. Good x and good y are substitutes. If the price of good y increase, then the
a. Demand for good x will decrease
b. Quantity demanded for good x will decrease
c. Demand for good x will increase
d. Quantity demanded of good x will increase.
3. Suppose you like to make, from scratch, pies filled with banana cream and vanilla pudding.
You notice that the price of bananas has increased. How would this price increase affect
your demand for vanilla pudding?
a. It would decrease
b. It would increase
c. It would be unaffected
d. There is insufficient information given to answer the question.
4. When the price of a good increases the quantity demanded __________. When the price
of a good decreases the quantity demanded ___________.
5. When the price of petroleum goes up, what probably happens to the demand for natural
gas? To the demand for coal? To the demand for solar power?
6. When the price of petroleum goes up, what probably happens to the demand for SUVs?
7. Fill in the blanks: The law of demand suggests that, other things constant, a __________ in
price
will __________ the __________ for a good.
A) decrease; increase; demand B) decrease; increase; quantity demanded
C) decrease; decrease; demand D) decrease; decrease; quantity demanded
8. Which consequence is least likely to follow from an increase in the price of gasoline?
A) Increased demand for fuel-efficient cars.
B) Decreased demand for automobile tires.
C) Increased demand for public transportation.
D) Decreased demand for gasoline.
E) Increased demand for airline tickets.
9. Which of the following would tend to increase the demand for college textbooks?
A) An increase in the number of enrolled college students.
B) A lower price of college textbooks.
C) A significant increase in college tuition.
D) Both A and B.
10 Suppose the price of home heating oil is unchanged, yet we observe people purchasing 20%
more this year. Then
A) the law of demand has been proven false.
B) the demand for home heating oil has increased.
C) the demand for home heating oil has decreased.
D) the demand for home heating oil has remained unchanged - only quantity demanded
changed.
11) Macintosh and IBM computers are considered substitute goods. Other things constant, if
IBM lowered its price, compared to the Mac, then
A) the demand for Mac computers would increase.
B) the demand for IBM computers would increase.
C) the quantity demanded for IBM computers would increase.
D) all of the above would occur.
12) Suppose consumers view the George Foreman Grill and the Weber charcoal grill as close
substitutes. Other things constant, a fall in the price of the George Foreman Grill would tend to
A) increase the demand for the Weber grill.
B) decrease the demand for the George Foreman Grill.
C) decrease the demand for the Weber grill.
D) increase the demand for the George Foreman Grill.
13) Suppose most consumers of hotdogs use mustard, a complementary good. If the price of
hotdogs decreases, which is most likely to occur?
A) the demand for hotdogs will increase. B) the demand for mustard will decrease.
C) the demand for mustard will increase. D) the price of mustard will decrease.
14) Consider baseball games and ballpark hotdogs. A significant increase in the price of
baseball game tickets would tend to
A) increase the demand for baseball game tickets.
B) decrease the demand for ballpark hotdogs.
C) increase the demand for ballpark hotdogs.
D) decrease the demand for baseball game tickets.
15) What effect would an decrease in the price of beef have on the demand for chicken?
A) It would decrease the demand for chicken.
B) It would increase the demand for chicken.
C) It would decrease the demand for beef only if the demand for beef is elastic.
D) It would have no effect, because a change in price affects only the quantity
demanded, not the demand.
E) It would increase the demand for beef only if the demand for beef is inelastic.
16) Land that can be used to grow commercial Christmas trees can also produce pulpwood.
Therefore, an increase in the expected market price of Christmas trees tends to
A) increase the supply of Christmas trees.
B) decrease the cost of producing pulpwood.
C) increase the cost of producing pulpwood.
D) reduce the demand for Christmas trees.
17) Land suitable for growing wheat can also be used to farm dairy cattle. Therefore, from the
farmer's perspective, an increase in the price of wheat tends to:
A) increase the cost of farming dairy cattle. B) reduce the demand for wheat.
C) increase the demand for dairy cattle. D) decrease the cost of farming dairy cattle
18) A fish hatchery raises brook trout and rainbow trout. An increase in the market price of
brook trout therefore tends to:
A) decrease the hatchery's cost of raising rainbow trout.
B) reduce the demand for brook trout.
C) increase the demand for brook trout.
D) increase the hatchery's cost of raising rainbow trout.
19) Quantity demanded means:
A) the amount of a good customers plan to purchase at a given price.
B) demand.
C) the amount of a good that customers ultimately desire.
D) the amount of a good suppliers plan to sell.
E) the amount of a good that customers need.
20) The law of demand suggests that consumers
A) change their demand when the price of a good changes.
B) change their consumption plans when the price of a good changes.
C) change their production plans when the price of a good changes.
D) increase their quantity demanded when the price of a good increases.
E) decrease their quantity demanded when the price of a good decreases.
21. In a market economy, who determines the price and quantity demanded of goods and
services that are sold?
a. Consumers
b. The Government
c. Producers
d. Both consumers and producers
e. None of the above
22. If a good is “inferior” then a decrease in income will result in:
a. an increase in the demand for the good
b. a decrease in the demand for the good
c. a higher market price
d. a lower market price
e. a lower demand for complementary goods
23. Suppose a decrease in the price of good X leads to more of good Y being sold. Then X and
Y are:
a. Substitutes
b. Complements
c. Normal Goods
d. Inferior Goods
e. Unrelated Goods
24. The law of demand tells us that:
a. when price falls, quantity demanded rises
b. when price falls, quantity demanded falls
c. when price rises, quantity demanded rises
d. when price rises, quantity demanded falls
e. both a and d satisfy the law of demand
25. Which of these would not cause a shift in the demand curve for a good or service?
a. A change in the price of a substitute good
b. A change in tastes towards the good
c. An increase in population
d. A decrease in the price of the good
e. A change in expectations regarding prices