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3.2   Shifts in Demand

 

1) Which of the following statements is FALSE about the demand curve?

A) An increase in demand shifts the demand curve to the left, closer to the price axis.

B) When only the price of a good changes, there is movement along the demand curve but no change in demand.

C) A change in demand is graphically shown by shifting the entire demand curve.

D) When demand decreases, there is a drop in the quantity demanded at each price.

 

2) Which of the following will cause a movement along the demand curve instead of a shift of the demand curve?

A) income

B) tastes and preferences

C) Expectations e the future price of a good

D) none of the above

 

3) Which of the following is a determinant of consumer demand?

A) expectation of the future relative price of a product

B) taxes imposed on firms that sell the product

C) cost of inputs used to produce the product

D) number of firms that produce the product

4) If more buyers came into the market for a good, we would expect to see the market demand curve

A) shift inward and to the left.

B) remain unchanged since none of the determinants of individual demand changed.

C) shift outward and to the right.

D) reflect a positive relationship between price and quantity demanded.

 

5) Suppose that short skirts that were fashionable in the 1990s become unfashionable in the late 2000s. If other factors were held constant, then there would be

A) a rightward movement along the supply curve.

B) a rightward shift of the demand curve.

C) a leftward shift in the demand curve.

D) a leftward movement along the supply curve.

 

6) Suppose a college increases the wages paid to student employees. Which of the following options is the best description of the most likely effect of the increase in wage earnings on the demand curve for school sweatshirts in the bookstore?

A) The demand curve shifts to the right.

B) The demand curve shifts to the left.

C) a leftward movement along the demand curve

D) a rightward movement along the demand curve

 

7) An increase in demand is shown graphically by

A) a shift of the demand curve to the left.

B) a movement up along the existing curve.

C) a shift of the demand curve to the right.

D) a movement down the existing curve.

8) If a demand curve shifts, we know that

A) the price of the good itself is not a factor.

B) the price of the good itself is a factor.

C) the price of the good and supply are the major factors.

D) the price of the good and demand are major factors.

 

9) Which of the following statements is FALSE?

A) If there is an increase in the demand for a product, consumers want to buy more of the product at each and every possible price.

B) A decrease in demand shifts the demand curve leftward toward the origin, while a decrease in quantity demanded involves a movement upward along a particular demand curve.

C) If the price of a good rises, quantity demanded of the good decreases and the demand curve shifts toward the origin as long as supply is static.

D) A change in the demand for a product is caused by factors other than changes in the product's price.

 

10) A demand curve for a normal good

A) slopes upward and to the right.

B) is constructed based on the assumption that income is rising.

C) is constructed based on the assumption that an inverse relationship exists between price and income.

D) shows the inverse relationship between price and quantity demanded.

 

 

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