Question 1

Suppose the price of donuts increases from $$1 to 2. $$According to the law of demand, what is the most likely outcome, assuming ceteris paribus?

Accepted Answer

The quantity demanded of donuts will decrease.

Question 2

Which of the following best describes 'horizontal summation' in the context of market demand?

Accepted Answer

Summing the quantities demanded by all consumers at each price level.

Question 3

If the price of movie tickets increases, what is the expected effect on the demand for popcorn, a complementary good?

Accepted Answer

The demand for popcorn will decrease.

Question 4

A successful marketing campaign for a new brand of chocolate increases its popularity. What happens to the demand curve for this chocolate?

Accepted Answer

It shifts to the right.

Question 5

Which of the following scenarios represents a shift in the demand curve rather than a movement along the curve?

Accepted Answer

An increase in consumer income for a normal good.

Question 6

If ramen noodles are considered an inferior good, what happens to the demand for ramen noodles when consumer incomes rise?

Accepted Answer

Demand for ramen noodles decreases.

Question 7

Suppose Adidas shoes and Nike shoes are substitutes. If the price of Adidas shoes increases, what is the likely effect on the demand for Nike shoes?

Accepted Answer

The demand for Nike shoes will increase.

Question 8

Which of the following is an example of an economic bad?

Accepted Answer

Pollution that reduces air quality.

Question 9

If a university hosts a major home game, attracting many out-of-town visitors, what is the likely effect on the demand for local hotel rooms?

Accepted Answer

The demand curve for hotel rooms shifts to the right.

Question 10

Which of the following best illustrates the law of demand?

Accepted Answer

As the price of apples rises, the quantity demanded of apples falls.

Question 11

If the price of gym memberships decreases, what is the likely effect on the demand for tennis shoes, a complementary good?

Accepted Answer

The demand for tennis shoes will increase.

Question 12

Which of the following would NOT cause a shift in the demand curve for a product?

Accepted Answer

A change in the price of the product itself.

Question 13

Suppose a negative medical report links soda consumption to health risks. What is the likely effect on the demand for soda?

Accepted Answer

The demand curve for soda shifts to the left.

Question 14

If consumers expect the price of a product to rise in the near future, what is the likely effect on current demand?

Accepted Answer

Current demand will increase.

Question 15

Which equation best represents the market demand for a good, given individual demand functions $$Q_{D1} = 10 - 2P$$ and $$Q_{D2} = 8 - P$$?

Accepted Answer

$$Q_D = (10 - 2P) + (8 - P)$$

Question 16

A decrease in the number of buyers in a market will have what effect on the demand curve?

Accepted Answer

Shift the demand curve to the left.

Question 17

If the price of a substitute good increases, what happens to the demand for the original good?

Accepted Answer

The demand for the original good increases.

Question 18

Which of the following is an example of a movement along the demand curve?

Accepted Answer

A decrease in the price of the good itself leads to a higher quantity demanded.

Question 19

If the demand for used cars increases during a recession, what type of good are used cars considered?

Accepted Answer

Inferior good

Question 20

Which of the following would cause a rightward shift in the demand curve for ice cream?

Accepted Answer

An increase in consumer income, assuming ice cream is a normal good.

Understanding Demand: Market Demand and Demand Shifters

Study Guide - Practice Questions