Quiz 1 - SS 2

Which of the following would shift the demand curve for gasoline to the right?

• A. An increase in consumer income, assuming gasoline is a normal good

• B. An increase in the price of cars, a complement for gasoline

• C. A decrease in the price of gasoline

• D. A decrease in the expected future price of gasoline

Currently you purchase ten frozen pizzas per month. You will graduate from college in December, and you will start a new job in January. You have no plans to purchase frozen pizzas in January. For you, frozen pizzas are:

• A. a complementary good

• B. an inferior good

• C. a normal good

• D. a substitute good

Assume Kalene buys notebooks in a competitive market. It follows that:

• A. Kalene cannot influence the price of notebooks even if she buys a large quantity of them

• B. Kalene has a limited number of sellers from which to buy notebooks

• C. Kalene might have trouble finding notebooks at her local store

• D. Kalene will negotiate with sellers whenever she buys notebooks

Soup is an inferior good if the demand

• A. curve for soup slopes upward

• B. for soup falls when income rises

• C. for soup falls when the price of a substitute for soup rises

• D. for soup rises when the price of soup falls

A competitive market is one in which there

• A. are many sellers, and each seller has the ability to set the price of his product

• B. is only one seller, but there are many buyers

• C. are many sellers, and they compete with one another in such a way that some sellers are always being forced out of the market

• D. are so many buyers and so many sellers that each has a negligible impact on the price of the product

Assume a market is perfectly competitive. When a new producer enters the market, the

• A. price in the market does not change

• B. price in the market increases

• C. market is no longer a competitive market

• D. price in the market decreases

Suppose that when the price of a 16 oz. to-go cup of gourmet coffee is $4.25, students purchase 750 cups per day. If the price decreases to $3.75 per cup, which of the following is the most likely outcome?

• A. Students would purchase fewer than 750 cups per day

• B. Student would continue to purchase 750 cups per day

• C. Students would purchase more than 750 cups per day

• D. We do not have enough information to answer this question

Refer to Figure 1. At a price of $12, there is a

• A. shortage of 1 unit

• B. shortage of 3 units

• C. surplus of 3 units

• D. surplus of 1 unit

Pizza is a normal good if the demand

• A. for pizza rises when income rises

• B. for pizza rises when the price of pizza falls

• C. curve for pizza slopes upward

• D. curve for pizza shifts to the right when the price of burritos rises, assuming pizza and burritos are substitutes

Which of the following demonstrates the law of demand?

• A. Ashlyn buys more donut holes at $0.25 per donut hole than at $0.50 per donut hole, other things equal

• B. After Qyatt got a raise at work, he bought more pretzels at $1.50 per pretzel than he did before his raise

• C. Benjamin buys fewer croissants at $0.75 per croissant than at $1 per croissant, other things equal

• D. Ellie buys fewer Snickers at $0.60 per candy bar after the price of Skittles falls to $0.50 per bag