The determinants of the demand curve.
Answer to Problem 1CQQ
Option ‘b’ is the correct answer.
Explanation of Solution
Option (b):
A change in price of hamburgers leads to a movement along the demand curve and not a shift of the demand curve because price is measured on the vertical axis of a demand curve. Thus, option ‘b’ is correct.
Option (a):
Hot dogs can be considered as substitutes of hamburgers. A change in the price of a substitute good shifts the demand curve of a good. Thus, a change in price of hot dogs shifts the demand curve of hamburgers. So, option ‘a’ is incorrect.
Option (c):
Hamburger buns can be considered as complementary goods of hamburgers. A change in the price of a complementary good shifts the demand curve of a good. Thus, a change in the price of hamburger buns shifts the demand curve of a hamburger. So, option ‘c’ is incorrect.
Option (d):
A change in the income of a consumer of a good shifts the demand curve of that good. Thus, a change in the income of hamburger consumers shifts the demand curve of hamburger. So, option ‘d’ is incorrect.
Concept introduction:
Complementary good: It is agood with a negative cross
Substitute good: It is agood with a positive cross elasticity of demand, that is, a good whose demand is decreased when the price of another good is decreased.
Want to see more full solutions like this?
Chapter 4 Solutions
Bundle: Principles of Microeconomics, 7th + LMS Integrated Aplia, 1 term Printed Access Card
- 6arrow_forwardWhich of the following pairs of goods are most likely substitutes? a. Cola and lemon lime soda b. Lettuce and salad dressing c. Peanut butter and gasoline d. Compact discs and compact disc playersarrow_forwardWhen consumers' incomes increased 10 percent, the quantity of milk bought increased 5 percent. This result means A. milk is a luxury. B. milk is a necessity. C. the demand for milk is income elastic. D. milk is an inferior good.arrow_forward
- For most goods if a consumer's income increases his demand for the goods will do what?arrow_forwardWhich of the following items are likely to be normal goods for a typical consumer? Which are likely to be inferior goods? Expensive perfume b. Paper plates c. Second hand clothing d. Overseas tripsarrow_forward10. Which of the following is NOT a determinant of the demand for gasoline? A. Consumers' incomes B. The price of diesel C. The price of automobiles D. The supply of gasoline E. All of the above are determinants of the demand for gasoline.arrow_forward
- QUESTION 11 If macaroni and cheese is an inferior good, then an increase in A. the price will cause the demand curve for macaroni and cheese to shift to the left. OB. a consumer's income will cause the demand curve for macaroni and cheese to shift to the right. C. a consumer's income will cause the demand curve for macaroni and cheese to shift to the left. OD. the price will cause the demand curve for macaroni and cheese to shift to the right.arrow_forward10. What happens to the demand curve for an inferior good if a consumer's income increases? Show me using a diagram, please.arrow_forwardSuppose that a consumer spends a fixed amount of income per month on the following pairs of goods: a.tortilla chips and salsab.tortilla chips and potato chips. movie tickets and gourmet coffee d.travel by bus and travel by subway If the price of one of the goods increases, explain the effect on the quantity demanded of each of the goods. In each pair, which are likely to complement and which are likely to be substituted?arrow_forward
- Consumers regard Dell computers and Apple computers as substitutes. If the price of a Dell computer decreases, the Group of answer choices A.demand for Apple computers increases. B.demand for Dell computers decreases. C. demand for Apple computers decreases. D. supply of Dell computers increases. E. demand for Dell computers increases.arrow_forwardWhat is a "normal" good? Select one: a. a good for which demand varies inversely with household income b. a good for which demand does not vary with household income c. a good for which demand varies directly with household income d. a good that normal people consume e. a good that everyone normally consumesarrow_forwardExplanation with an example Variables that can shift the demand curve –Income –Normal good –Inferior goodarrow_forward
- Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage LearningBrief Principles of Macroeconomics (MindTap Cours...EconomicsISBN:9781337091985Author:N. Gregory MankiwPublisher:Cengage LearningExploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning