Reference no: EM133222925

Question 1

The law of demand states that, other things remaining the same,

a. the higher the price of a good, the smaller is the quantity demanded.

b. as income decreases, willingness to pay for the good increases.

c. the higher the price of a good, the greater is the quantity demanded.

d. as income increases, willingness to pay for the good increases.

Question 2

According to the law of demand, a decrease in the price of ground beef

a. will shift the demand curve for ground beef to the right.

b. will cause an increase in demand.

c. will shift the demand curve for ground beef to the left.

d. will cause an increase in quantity demanded.

Question 3

If potatoes are an inferior good, then, ceteris paribus, an increase in consumer income will

a. increase the quantity demanded for potatoes.

b. decrease the demand for potatoes.

c. increase the demand for potatoes.

d. decrease the quantity demanded for potatoes.

Question 4

Suppose hamburgers and pizza are substitutes. If the price of pizza increases, then

a. the quantity demanded for pizza will increase.

b. the demand for pizza will decrease.

c. the quantity demanded for hamburgers will increase.

d. the demand for hamburgers will increase.

Question 5

People buy more of good A when the price of good B falls. Good A and good B are

a. inferior goods.

b. complements.

c. substitutes.

d. normal goods.

Question 6

In each of the following cases, draw a graph to show how demand or quantity demanded for the "underlined" product changes. If demand does change, then explain which factor (number of buyers, income, price of related products, preferences, and consumer expectation) caused the change. (For this homework, please write your answer and draw your graphs on a paper and then upload the photo)

a) The price of shoes drops due to cheap imports.

b) Consumers react to an increase in the price of butter.

c) More and more young female celebrities are seen wearing the new shoes by Nike.

d) The price for gasoline-powered cars drops.

e) Reports come out pointing out the negative health issues with diet coke.

f) Bread prices decrease which affects the market for jam.

g) Recently people eating at Pizza House restaurant have been getting sick.

h) An influx of immigrants in a city affects the housing market.

i) Price for hamburgers goes up, affecting the market for hot dogs.

j) The price of laptop computers decreases which affects the desktop market.

k) The government gives a tax refund to consumers, which influences sales of clothing.

l) Current recession reduces workers' income and affects the used car market.