econ 101 chapter 2 quiz

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 margarine

Law of supply states that as the price of a good O increases, suppliers want to supply less of that item O decreases, suppliers want to supply less of that item O increases, the quantity of people who want to buy it decreases O decreases, suppliers want to supply more of that item

If macaroni and cheese is an inferior good and an increase in consumer income occurs, then which of the following statements is TRUE? Select one: O a. At a given price, more will be spent on macaroni and cheese. O b. There will be an increase in demand for macaroni and cheese. Oc The demand curve for macaroni and cheese will shift farther away from the origin. Od. There will be a decrease in demand for macaroni and cheese.

Which of the following explains why a decrease in the price of a normal good will lead to an increase in the quantity demanded of the good? O A lower price decreases demand for complementary goods O A lower price increases consumers' marginal utility O A lower price increases demand for the good O A lower price increases demand for substitute goods O A lower price increases consumers' purchasing power

If cheese is an inferior good, which of the following must be true? O The demand curve for cheese is horizontal O A decrease in consumer income will decrease the supply of cheese O An increase in consumer incomes will decrease the demand for cheese O An increase in the price of cheese will decrease the supply of cheese O The demand curve for cheese is vertical

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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.

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|Unit 3 Midterm Economics A docs.google.com/forms/d/e/1FAlpQLSfDzcagnpq9EUKBs3AWMb. a change in quantity demanded for one product or service causes a change in simple demand for a related product or service. * In 2. O Elasticity of Demand O Cross Elasticity of Demand O Diminishing Marginal Utility O Cost-Benefit Analysis O All of These O None of These The rules of the price system operate in all markets of a capitalist/market economy. The market where consumers earn income Market. by selling resources to business resources is called O Consumer

A 10 percent increase in income leads to a 15% decrease in the quantity of Cheetos demanded but no change in the price of Cheetos. From this information, we can assume: O Cheetos are an inferior good and price elasticity of demand is less than 1. O Cheetos are a normal good and price elasticity of demand is greater than 1. Cheetos are an inferior good and price elasticity of supply is equal to zero. Cheetos are an inferior good and price elasticity of supply is infinite.

Suppose that California wildfires destroy one-third of the grape crop in the state. What would be the expected effect on the market for raisins? O increase in equilibrium price, increase in equilibrium quantity O decrease in equilibrium price, increase in equilibrium quantity decrease in equilibrium price, decrease in equilibrium quantity no change in the market for raisins increase in equilibrium price, decrease in equilibrium quanttiy

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 False

Question 3

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly a complement for peanut butter fell, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you? Select one: a. Quantity will rise, and the effect on price is ambiguous. O b. Quantity will fall, and the effect on price is ambiguous. Price will fall, and the effect on quantity is ambiguous. O d. Price will rise, and the effect on quantity is ambiguous.

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…

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A demand schedule A) shows how the demand changes when the supply changes. B) is a list of the quantities demanded at each different price when all other influences on buying plans remain the same. C) shows the quantity demanded at one price. O D) is a graph showing a relationship between the quantity demanded and the price of a good.

QUESTION 3 Which of the following would lead to the demand curve shifting leftwards? O In the case of inferior goods, a rise in income O In the case of normal goods, a rise in income O An increase in prices O An increase in the price of a substitute good

QUESTION 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.

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The price of sugar (a substitute for corn syrup) decreased. At the same time, the price of corn starch (one of the main ingredients of corn syrup) increased. These two effects together will lead to the following change in the price and quantity of corn syrup: O A decrease in quantity and an ambiguous effect on price O A decrease in price and an increase in quantity O An increase in both price and quantity O An increase in price and an ambiguous effect on quantity O An increase in quantity and an ambiguous effect on price