Review of Demand

Quantity demanded: Indicate the answer choice that best completes the statement or answers the question.

• shows how much buyers are willing and able to buy at different prices.

• is the amount that buyers are willing and able to buy at a particular price.

• shows how much sellers are willing and able to sell at different prices.

• is the amount that sellers are willing and able to sell at a particular price.

A demand curve is a function that shows the relationship between:

• price and the quantity sold.

• price and the quantity supplied.

• price and the quantity demanded.

• quantity demanded and quantity supplied.

Which statement expresses the law of demand?

• There is a positive relationship between price and consumer surplus, all else equal.

• There is a positive relationship between price and the quantity that buyers are willing and able to purchase, all else equal.

• There is an inverse relationship between the willingness to pay and the ability to pay, all else equal.

• There is a negative relationship between price and quantity demanded, all else equal.

If the university president valued a parking space close to the administration building at $500 and paid $30 for a parking permit, he would receive consumer surplus equal to:

• $30.

• $470.

• $500.

• $530.

A decrease in demand refers to:

• a rightward shift of the demand curve.

• a leftward shift of the demand curve.

• an upward movement along the demand curve.

• a downward movement along the demand curve.

Assume that spaghetti is an inferior good for most people. As peoples' incomes increase, all other things held constant, the demand for spaghetti will:

• decrease, shifting the demand curve to the left.

• decrease, shifting the demand curve to the right.

Which factor would cause the change in the figure?

• a. a decrease in the price of a complement good

• b. a decrease in the price of the product

• c. a decrease in the price of a substitute good

• d. an increase in taxes

New research suggests that cholesterol may not be as unhealthy as previously thought. If so, what will happen to the demand for eggs, a high-cholesterol food?

• a. It will decrease because eggs and cholesterol are substitutes.

• b. It will increase because some consumers that used to avoid eggs for health reasons will stop avoiding them.

• c. It will increase, since eggs are an inferior good.

• d. It will decrease because there will be fewer chickens to lay eggs.

Which would NOT cause the market demand curve for dog food to shift to the right?

• a. an increase in the price of veterinarian-office visits

• b. an increase in population

• c. a hit television show about a talking basset hound

• d. a decrease in the price of invisible backyard fences

When cashews are $4 a pound, Sarah buys seven pounds per month. When they are $6 a pound, she buys five pounds per month. How many pounds is Sarah likely to purchase if the price is $7 a pound?

• a. three pounds

• b. five pounds

• c. seven pounds