The price of good A will rise if: O a. The demand for good A decreases. O b. The price of a complement for good A decreases. O c. The price of a substitute for good A decreases. Od. The price of a complement for good A increases.
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- As a general rule, is it safe to assume that a change in the price of a good will always have its most significant impact on the quantity demanded of that good, rather than on the quantity demanded of miller goods? Explain.If butter and margarine are substitutes, an increase in the price of butter causes: Select one: O a. quantity demanded of margarine to fall and the demand curve for butter to shift toward the origin O b. quantity demanded of butter remains constant, but the demand for margarine decreases O c. the demand curve for both butter and margarine shift O d. decrease in quantity demanded for butter and an outward shift of the demand curve for margarineThe demand for a given good will decrease when the price of its substitute and the demand for a given good also decreases when the price of its complement Select one: O a. None of the provided answers are correct O b. rises; rises O c. falls; falls O d. falls; rises Assume a demand curve for coffee; Which of the following would NOT shift the demand curve for coffee? Select one: O a. an increase in wages O b. a decrease in the price of tea O c. price of coffee changes O d. a change in taste for tea
- QUESTION 12 Assume that the price of cheese has decreased and the price of garlic bread (a substitute good) has decreased at the same time. How this will affect the market for pizzas? O a. Quantity of pizza would fall, and the effect on price would be ambiguous. O b. Price of pizza would rise, and the effect on quantity would be ambiguous. O. Quantity of pizza would rise, and the effect on price would be ambiguous. O d. Price of pizza would fall, and the effect on quantity would be ambiguous. QUESTION 13 Samuel owns a laundromat business in Queens, New York. He recently purchased 2 new washing machines and 2 new dryers. This will cause O a. the demand for laundromat services to increase. O b. the supply of laundromat services to decrease. O c. the demand for laundromat services to decrease. O d. the supply of laundromat services to increase. QUESTION 16 A likely example of complementary goods for most people would be O a. golf club and baseball bat. O b. tea and coffee. O c. CPA…There is a negative relationship between the price of fuel and quantity demanded for cars, as these two goods are O a. Substitute goods O b. Normal goods Oc Complementary goods O d. Inferior goods Which of the following factors cause a contraction in quantity demanded for a commodity? O a. A rise in the price of the commodity O b. A decrease in the price of complementary goods Oc An increase in the price of its substitutes O d. An increase in the taste and preferences of the consumer for the commodityQUESTION 11 Assume that the price of cheese has decreased and the price of garlic bread (a substitute good) has decreased at the same time. How this will affect the market for pizzas? O a. Quantity of pizza would fall, and the effect on price would be ambiguous. O b. Price of pizza would rise, and the effect on quantity would be ambiguous. O. Quantity of pizza would rise, and the effect on price would be ambiguous. O d. Price of pizza would fall, and the effect on quantity would be ambiguous.
- Consider a situation with two goods. Which of the following statements are true, which are false? If a good is a Giffen good, then it is an inferior good. O True O False A good is a Giffen good if the demand for this good decreases O True False when income increases. A good is an inferior good if the demand for this good increases when its price increases. O True FalseThe price of a good will tend to fall when there is excess demand for the good. O there is excess supply of the good. O demand for the good increases. O the supply of the good decreases.Consider the figure to the right. At point A, the O A. marginal change in price associated with a given change in quantity is zero. value of the slope is larger than at point B. O B. O C. marginal change in price associated with a given change in quantity is larger than at point B. O D. O E. slope of the curve is positive. marginal change in price associated with a given change in quantity is smaller than at point B. Price B Quantity Q ON
- If two goods are substitutes, then O an increase in the price of one causes the demand for the other to fall. O there is an inverse relationship between changes in the price of one good and changes in the demand for the other. O if the price of one good falls, the demand for the other good falls also. O changes in the quantity demanded of one good will not affect the demand for the other.Sundresses Price S D Quantity For reasons unstated, both consumers and producers expect that the price of sundresses is going to rise in the future. What do you think will happen in the market for sundresses today, shown in the graph above? Select one: O a. Price will fall. O b. Quantity will rise. O c. Price will rise. O d. Quantity will fall.In the figure, the shift in the demand curve from D to D₁ can be the result of O A. a decrease in income if pizza is a normal good. B. an increase in the price of soda, a complement to pizza. OC. an increase in the price of a sub sandwich, a substitute for pizza. O D. a change in quantity demanded. O E. an increase in the price of pizza. Price (dollars per pizza) 0 b ¤ DI D2 Quantity (millions of pizzas per year)