Question 1

The law of demand works because of the availability of complements.

Accepted Answer

A) True 
 B)False

Question 2

Substitutes need to be exactly the same product or service as the product or service you want.

Accepted Answer

A) True 
 B)False

Question 3

You have a bet that you can eat more pizza slices than your friend. The loser has to pay for all the pizza. Which statement is true ?

Accepted Answer

A)  Your total benefit increases with each slice of pizza you choose to eat. 
B)  As long as you don't get sick, there will be some positive marginal benefit from every slice you choose to eat. 
C)  Each additional slice of pizza has a lower marginal benefit than the slice before. 
D)  You will stop eating when the expected marginal benefit of the last slice is zero. 
E)  All of the above are true. 
A)  Your total benefit increases with each slice of pizza you choose to eat. 
B)  As long as you don't get sick, there will be some positive marginal benefit from every slice you choose to eat. 
C)  Each additional slice of pizza has a lower marginal benefit than the slice before. 
D)  You will stop eating when the expected marginal benefit of the last slice is zero. 
E)  All of the above are true.

Question 4

A decrease in quantity demanded is represented by a

Accepted Answer

A)  rightward shift of the supply curve. 
B)  rightward shift of the demand curve. 
C)  leftward shift of the demand curve. 
D)  movement up along the demand curve. 
E)  movement down along the demand curve. 
A)  rightward shift of the supply curve. 
B)  rightward shift of the demand curve. 
C)  leftward shift of the demand curve. 
D)  movement up along the demand curve. 
E)  movement down along the demand curve.

Question 5

Demand ________ if consumers' incomes ________ and this is a ________ good.

Accepted Answer

A)  increases; decrease; normal 
B)  increases; increase; inferior 
C)  increases; decrease; inferior 
D)  decreases; increase; normal 
E)  decreases; decrease; inferior 
A)  increases; decrease; normal 
B)  increases; increase; inferior 
C)  increases; decrease; inferior 
D)  decreases; increase; normal 
E)  decreases; decrease; inferior

Question 6

The demand for gasoline has increased. One explanation is that

Accepted Answer

A)  consumer incomes are lower and gasoline is a normal good. 
B)  the price of automobiles is higher and gasoline and automobiles are complements. 
C)  consumer incomes are higher and gasoline is a normal good. 
D)  the number of consumers has decreased. 
E)  everyone expects tomorrow's gasoline price will be lower. 
A)  consumer incomes are lower and gasoline is a normal good. 
B)  the price of automobiles is higher and gasoline and automobiles are complements. 
C)  consumer incomes are higher and gasoline is a normal good. 
D)  the number of consumers has decreased. 
E)  everyone expects tomorrow's gasoline price will be lower.

Question 7

Which could not cause an increase in demand for a service?

Accepted Answer

A)  an increase in income 
B)  a decrease in income 
C)  a decrease in the price of a substitute 
D)  a decrease in the price of a complement 
E)  an increase in preferences for the service 
A)  an increase in income 
B)  a decrease in income 
C)  a decrease in the price of a substitute 
D)  a decrease in the price of a complement 
E)  an increase in preferences for the service

Question 8

Because drivers expect the price on Saturdays will be higher, they increase the demand for gasoline on Fridays.

Accepted Answer

A) True 
 B)False

Question 9

By raising the price of water, the City of Toronto encouraged smart consumers to sweep their sidewalks instead of hosing them down with water.

Accepted Answer

A) True 
 B)False

Question 10

Your demand for tickets to the Lady Gaga concert depends on

Accepted Answer

A)  how much you like Lada Gaga. 
B)  your income. 
C)  what other live concerts you are interested in. 
D)  what else you might spend the money on. 
E)  all of the above. 
A)  how much you like Lada Gaga. 
B)  your income. 
C)  what other live concerts you are interested in. 
D)  what else you might spend the money on. 
E)  all of the above.

Question 11

The number of movie-goers has decreased. One explanation is that

Accepted Answer

A)  the prices of substitutes have fallen. 
B)  the prices of complementary products like popcorn have fallen. 
C)  people have higher incomes and movies are a normal good. 
D)  people expect the price of movies will rise in the future. 
E)  people have lower incomes and movies are an inferior good. 
A)  the prices of substitutes have fallen. 
B)  the prices of complementary products like popcorn have fallen. 
C)  people have higher incomes and movies are a normal good. 
D)  people expect the price of movies will rise in the future. 
E)  people have lower incomes and movies are an inferior good.

Question 12

Demand is a much more limited term than quantity demanded.

Accepted Answer

A) True 
 B)False

Question 13

Substitutes must

Accepted Answer

A)  have the same price. 
B)  satisfy the same want. 
C)  be sold in the same store. 
D)  have the same opportunity cost. 
E)  be exactly the same product or service. 
A)  have the same price. 
B)  satisfy the same want. 
C)  be sold in the same store. 
D)  have the same opportunity cost. 
E)  be exactly the same product or service.

Question 14

Products and services that are plentiful and essential will typically have

Accepted Answer

A)  few alternatives. 
B)  a low total benefit. 
C)  a high price. 
D)  a low marginal benefit. 
E)  a high marginal benefit. 
A)  few alternatives. 
B)  a low total benefit. 
C)  a high price. 
D)  a low marginal benefit. 
E)  a high marginal benefit.

Question 15

Total growth (in height) is best described by the question,

Accepted Answer

A)  "How much have you grown since I last saw you?" 
B)  "Have you had a growth spurt?" 
C)  "How tall are you?" 
D)  "When did you get taller than your mother?" 
E)  "Did they stretch you on the rack to make you taller?" 
A)  "How much have you grown since I last saw you?" 
B)  "Have you had a growth spurt?" 
C)  "How tall are you?" 
D)  "When did you get taller than your mother?" 
E)  "Did they stretch you on the rack to make you taller?"

Question 16

Figure 2.3.1. 
-Look at the market for water in Figure 2.3.1. A movement from point D to point B is caused by a(n)

Accepted Answer

A)  fall in the price of water. 
B)  rise in the price of water. 
C)  increase in the number of consumers. 
D)  rise in the expected future price of water. 
E)  fall in the expected future price of water. 
A)  fall in the price of water. 
B)  rise in the price of water. 
C)  increase in the number of consumers. 
D)  rise in the expected future price of water. 
E)  fall in the expected future price of water.

Question 17

What you can afford is limited by

Accepted Answer

A)  preferences. 
B)  demand. 
C)  substitutes. 
D)  money. 
E)  externalities. 
A)  preferences. 
B)  demand. 
C)  substitutes. 
D)  money. 
E)  externalities.

Question 18

Quantity demanded is a much more limited term than demand.

Accepted Answer

A) True 
 B)False

Question 19

Marginal benefits change with circumstances.

Accepted Answer

A) True 
 B)False

Question 20

The high price of diamonds relative to the price of water is due to the fact that

Accepted Answer

A)  total benefits from water are relatively low. 
B)  total benefits from diamonds are relatively high. 
C)  marginal benefits from water are relatively high. 
D)  marginal benefits from diamonds are relatively low. 
E)  none of the above is true. 
A)  total benefits from water are relatively low. 
B)  total benefits from diamonds are relatively high. 
C)  marginal benefits from water are relatively high. 
D)  marginal benefits from diamonds are relatively low. 
E)  none of the above is true.

The law of demand works because of the availability of complements.

Substitutes need to be exactly the same product or service as the product or service you want.

You have a bet that you can eat more pizza slices than your friend. The loser has to pay for all the pizza. Which statement is true ?

A decrease in quantity demanded is represented by a

Demand if consumers' incomes and this is a good.

The demand for gasoline has increased. One explanation is that

Which could not cause an increase in demand for a service?

Because drivers expect the price on Saturdays will be higher, they increase the demand for gasoline on Fridays.

By raising the price of water, the City of Toronto encouraged smart consumers to sweep their sidewalks instead of hosing them down with water.

Your demand for tickets to the Lady Gaga concert depends on

The number of movie-goers has decreased. One explanation is that

Demand is a much more limited term than quantity demanded.

Substitutes must

Products and services that are plentiful and essential will typically have

Total growth (in height) is best described by the question,

Figure 2.3.1. -Look at the market for water in Figure 2.3.1. A movement from point D to point B is caused by a(n)

What you can afford is limited by

Quantity demanded is a much more limited term than demand.

Marginal benefits change with circumstances.

The high price of diamonds relative to the price of water is due to the fact that

Whats in Economics for You Scarcity, Opportunity Cost, Trade, and Models

Show Me the Money: the Law of Supply

Coordinating Smart Choices: Demand and Supply

Are Your Smart Choices Smart for All Macroeconomics and Microeconomics

Up Around the Circular Flow: Gdp, Economic Growth, and Business Cycles

Costs of Not Working and Living: Unemployment and Inflation

Skating to Where the Puck Is Going: Aggregate Supply and Aggregate Demand

Money Is for Lunatics: Demanders and Suppliers of Money

Trading Dollars for Dollars Exchange Rates and Payments With the Rest of the World

Steering Blindly Monetary Policy and the Bank of Canada

Spending Others Money: Fiscal Policy, Deficits, and National Debt

Are Sweatshops All Bad Globalization and Trade Policy

Filters

Exam 2: Making Smart Choices: the Law of Demand

The law of demand works because of the availability of complements.

Substitutes need to be exactly the same product or service as the product or service you want.

You have a bet that you can eat more pizza slices than your friend. The loser has to pay for all the pizza. Which statement is true ?

A decrease in quantity demanded is represented by a

Demand ________ if consumers' incomes ________ and this is a ________ good.

The demand for gasoline has increased. One explanation is that

Which could not cause an increase in demand for a service?

Because drivers expect the price on Saturdays will be higher, they increase the demand for gasoline on Fridays.

By raising the price of water, the City of Toronto encouraged smart consumers to sweep their sidewalks instead of hosing them down with water.

Your demand for tickets to the Lady Gaga concert depends on

The number of movie-goers has decreased. One explanation is that

Demand is a much more limited term than quantity demanded.

Substitutes must

Products and services that are plentiful and essential will typically have

Total growth (in height) is best described by the question,

Figure 2.3.1. -Look at the market for water in Figure 2.3.1. A movement from point D to point B is caused by a(n)

What you can afford is limited by

Quantity demanded is a much more limited term than demand.

Marginal benefits change with circumstances.

The high price of diamonds relative to the price of water is due to the fact that

Whats in Economics for You Scarcity, Opportunity Cost, Trade, and Models

Show Me the Money: the Law of Supply

Coordinating Smart Choices: Demand and Supply

Are Your Smart Choices Smart for All Macroeconomics and Microeconomics

Up Around the Circular Flow: Gdp, Economic Growth, and Business Cycles

Costs of Not Working and Living: Unemployment and Inflation

Skating to Where the Puck Is Going: Aggregate Supply and Aggregate Demand

Money Is for Lunatics: Demanders and Suppliers of Money

Trading Dollars for Dollars Exchange Rates and Payments With the Rest of the World

Steering Blindly Monetary Policy and the Bank of Canada

Spending Others Money: Fiscal Policy, Deficits, and National Debt

Are Sweatshops All Bad Globalization and Trade Policy

Filters

Demand if consumers' incomes and this is a good.