Econ Chapter 3 Test

If James and his friends experience the substitution effect, they will respond to a rise in the price of their favorite post-game snack by

• working extra hours to make more money.

• buying less of their favorite snack.

• buying more of their favorite snack

• choosing another snack food instead of their favorite snack.

In economics, the concept of demand is defined as the desire to own something

• that has not yet been manufactured or produced.

• and a willingness to pay more than other consumers for it.

• that a manufacturer is capable of producing.

• combined with the ability to pay for it.

According to the law of demand, when the price of pizza goes up,

• consumers will buy less pizza.

• consumers will save more money.

• pizza restaurants will stop making pizza.

• pizza restaurants will make more money.

Juanita has noticed that the price of bagels has gone up. Because of this, she has decided to buy a less expensive yogurt every morning for her breakfast. This is an example of the

• income effect.

• law of demand.

• substitution effect.

• market demand schedule.

If Tino responds to a sharp increase in his transportation costs by buying fewer clothes, he is demonstrating

• horizontal demand.

• an individual demand schedule.

• the income effect.

• the substitution effect.

A change in demand for one good will have what effect on its complement?

• No effect

• Different effects at different times

• The same effect

• The opposite effect

The closing of a major factory in a city is likely to affect which non-price determinants of demand most strongly in the short term?

• consumer tastes

• demographics

• income

• population

Ceteris paribus" means demand will change when price changes

• no matter what other factors may influence the market.

• if other market factors remain constant.

• only if the supply also does not change.

• only in the short-term.

In general, a decrease in consumer income will have what effect on demand for normal goods?

• It will have no effect.

• It will cause demand to rise.

• It will cause demand to fall.

• It will demand to fluctuate sharply.

The increasing age of the American population is an example of how

• changing demographics can cause demand shifts.

• the law of ceteris paribus works.

• lack of substitutes can blunt demand shifts.

• demand does not always change when prices change.