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Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A demand curve shows the relationship between 1) A) the price of a produce and the demand for the product. B) the price of a product and the quantity of the product demanded. C) the quantity that consumers are willing and able to buy and the quantity that sellers are willing and able to offer. D) the amount of a product sellers are willing to sell at a particular price and the amount consumers are willing to buy at that price. 2) If, in response to an increase in the price of chocolate, the quantity demanded of chocolate decreases economists would describe this as 2) A) a decrease in demand. B) a change in consumer income. C) a decrease in quantity demanded. D) a decrease in consumers' taste for chocolate. 3) The law of demand implies, holding everything else constant, that 3) A) as the price of bagels increases, the demand for bagels will decrease. B) as the price for bagels increases, the demand of bagels will increase. C) as the price of bagels increases, the quantity of bagels demanded will increase. D) as the price of bagels increases, the quantity of bagels demanded will decrease. 4) A change in which variable will change the market demand for a product? 4) A) The number of firms in the market. B) The quantity supplied of the product. C) The price of the product. D) Expected future prices. Table 3 - 1 Loose leaf Tea Price per lb. (dollars) Sunil's Quantity Demanded (lbs) Mia's Quantity Demanded (lbs) Rest of Market Quantity Demanded (lbs) Market Quantity demanded (lbs) $8 4 0 30 6 7 2 40 5 9 3 51 4 12 5 64 3 15 8 90 5) Refer to Table 3 - 1 . The table above shows the demand schedules for loose - leaf tea of two individuals (Sunil and Mia) and the rest of the market. At a price of $5, the quantity demanded in the market would be 5) A) 76 lbs. B) 51 lbs. C) 146 lbs. D) 63 lbs 1
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6) Which of the following will not shift the demand curve for a good? 6) A) An increase in the price of the good. B) An increase in population. C) A decrease in the price of a substitute good. D) An increase in consumer incomes. 7) If the price of grapefruit rises, the substitution effect due to the price change will cause 7) A) a decrease in the quantity supplied of grapefruit. B) a decrease in the demand for grapefruit. C) a decrease in the quantity demanded of grapefruit. D) a decrease in the demand for oranges, a substitute for grapefruit. 8) If an increase in income leads to in an increase in the demand for peanut butter, then peanut butter is 8) A) a necessity. B) a normal good. C) a complement. D) a neutral good. 9) If a decrease in income leads to an increase in the demand for macaroni, then macaroni is 9) A) a necessity. B) a normal good. C) a neutral good.
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