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Fall 2019 Introduction to Economics I Quiz Chapter 4 – DEMAND

Name : Andi Hoxhaj

1. The two words most often used by economists are a. prices and quantities. b. resources and allocation. c. supply and demand. d. efficiency and equity. 2. In competitive markets, a. firms produce identical products. b. no individual buyer can influence the market price. c. no individual seller can influence the market price. d. All of the above are correct. 3. In a market economy, supply and demand determine a. both the quantity of each good produced and the price at which it is sold. b. the quantity of each good produced but not the price at which it is sold. c. the price at which each good is sold but not the quantity of each good produced. d. neither the quantity of each good produced nor the price at which it is sold. 4. Which of the following is an example of a market? a. a gas station b. a garage sale c. a barber shop d. All of the above are examples of markets. 5. In competitive markets, a. firms produce identical products. b. buyers can influence the market price more easily than sellers. c. markets are more likely to be in equilibrium. d. sellers are price setters. 6. Assume the market for pork is perfectly competitive. When one pork buyer exits the market, a. the price of pork increases. b. the price of pork decreases. c. the price of pork does not change. d. there is no longer a market for pork.

7. When the price of a good or service changes, a. the supply curve shifts in the opposite direction. b. the demand curve shifts in the opposite direction. c. the demand curve shifts in the same direction. d. there is a movement along a given demand curve.

Figure 4-1 price

A

P

B

P'

D

Q

Q'

quantity

8. Refer to Figure 4-1. The movement from point A to point B on the graph shows a. a decrease in demand. b. an increase in demand. c. a decrease in quantity demanded. d. an increase in quantity demanded. 9. Nemo rents 5 movies per month when the price is $3.00 per rental and 7 movies per month when the price is $2.50 per rental. Nemo’s demand demonstrates the law of a. price. b. supply. c. demand. d. income. 10. Which of the following demonstrates the law of demand? a. After Jon got a raise at work, he bought more pretzels at $1.50 per pretzel than he did before his raise. b. Melissa buys fewer muffins at $0.75 per muffin than at $1 per muffin, other things equal. c. Dave buys more donuts at $0.25 per donut than at $0.50 per donut, other things equal. d. Kendra buys fewer Snickers at $0.60 per Snickers after the price of Milky Ways falls to $0.50 per Milky Way. 11. The following table contains a demand schedule for a good.

Price $10 $20

Quantity Demanded 100 Q1

If the law of demand applies to this good, then Q1 could be a. 0. b. 100. c. 200. d. 400. 12. Opponents of cigarette taxes often argue that tobacco and marijuana are substitutes so that high cigarette prices

a. encourage marijuana use, and the evidence supports this argument. b. encourage marijuana use, but the evidence does not support this argument. c. discourage marijuana use, and the evidence supports this argument. d. discourage marijuana use, but the evidence does not support this argument. Figure 4-7 Panel (a)

Panel (b)

price

price

P' P

D

Q'

Q

D' quantity

D quantity

13. Refer to Figure 4-7. The graphs show the demand for cigarettes. In Panel (a), the arrows are consistent with which of the following events? a. The price of marijuana, a complement to cigarettes, increased. b. Mandatory health warnings were placed on cigarette packages. c. Several foreign countries banned U.S. cigarettes in their countries. d. A tax was placed on cigarettes. 14. What would happen to the equilibrium price and quantity of lattés if consumers’ incomes rise and lattés are a normal good? a. Both the equilibrium price and quantity would increase. b. Both the equilibrium price and quantity would decrease. c. The equilibrium price would increase, and the equilibrium quantity would decrease. d. The equilibrium price would decrease, and the equilibrium quantity would increase.

Figure 4-19 The diagram below pertains to the demand for turkey in the United States. price

y

x

D A DB quantity

15. Refer to Figure 4-19. All else equal, an increase in the income of buyers who consider turkey to be an inferior good would cause a move from a. DA to DB. b. DB to DA. c. x to y. d. y to x. 16. Refer to Figure 4-19. All else equal, buyers expecting turkey to be more expensive in the future would cause a current move from a. DA to DB. b. DB to DA. c. x to y. d. y to x. 17. Refer to Figure 4-19. All else equal, a large number of people becoming vegetarians would cause a move from a. DA to DB. b. DB to DA. c. x to y. d. y to x....