question
If the Apple iPad and the Samsung Galaxy are considered substitutes, then, other things equal, an increase in the price of the iPad will
answer
increase the demand for the Galaxy Tab
question
What is the difference between an "increase in demand" and an "increase in quantity demanded"?
answer
An "increase in demand" is represented by a rightward shift of the demand curve while "increase in quantity demanded" is represented by a movement along a given demand curve
question
The demand by all consumers of a given good or service is the _______ for the good or service
answer
market demand
question
If, in response to an increase in the price of chocolate, the quantity demanded of chocolate decreases economists would describe this as
answer
a decrease in quantity demanded
question
If a demand curve shifts right, then
answer
demand has increased
question
A change in all of the following variables will change the market demand for a product EXCEPT
answer
the price of a product
question
The income effect of a price change refers to the impact of a change in
answer
the price of a good on a consumer's purchasing power
question
Which of the following will shift the demand curve for a good?
answer
a decrease in the price of a complementary good
question
A movement along the demand curve for toothpaste would be caused by
answer
a change in the price of toothpaste
question
When the price of a good falls, consumers buy a larger quantity because of the _______ effect and the ______ effect
answer
substitution, income
question
If the price of a grapefruit rises, the substitution effect due to the price change will cause
answer
a decrease in the quantity demanded of the grapefruit
question
If an increase in income leads to an increase in the demand for peanut buter, then peanut butter is
answer
a normal good
question
if an increase in income leads to a decrease in the demand for popcorn, then popcorn is
answer
an inferior good
question
Buyers rush to purchase stocks in California vineyards following a forecast of a 30 percent decline in this year's grape harvest. What happens in the California wine market as a result of this announcement?
answer
the demand curve for California wine shifts to the right in anticipation of higher prices in the future
question
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?
answer
the demand curve shifts to the left
question
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?
answer
The demand curve shifts to the right
question
One would speak of a change in the quantity of a good supplied, rather than a change in supply, if
answer
the price of the good changes
question
If a firm has an incentive to increase supply now and decrease supply in the future, the firm expects that
answer
the price of its product will be lower in the future than it is today
question
What shifts the supply curve, and which way?
a. increase in number of firms
b. increase in current price
c. decrease in the price of an input
a. increase in number of firms
b. increase in current price
c. decrease in the price of an input
answer
a. RIGHT
b. no shift
c. RIGHT
b. no shift
c. RIGHT
question
Which of the following is the correct way to describe equilibrium in a market?
answer
at equilibrium, quantity demanded equals quantity supplied
question
In a free market such as that depicted above, a surplus is eliminated by
answer
a price decrease, decreasing the quantity supplied and increasing the quantity demanded
question
What does trade allow a country to do that it can't do by itself?
answer
CONSUME outside the PPF
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