Macro Notes Notes Notes Notes

What happens to quantity demanded of a good when its price rises, other things being equal?

The quantity demanded of the good decreases.

What might cause a movement along the supply curve?

A change in the price of the good or service that is being supplied.

What happens to jewelry production if the price of gold falls?

You would be willing and able to produce more jewelry than before at each possible price.

Which of the following illustrates the law of demand?

Lois buys fewer muffins at $0.75 per muffin than at $1.00 per muffin, other things equal.

What is not a determinant of the demand for a particular good?

The prices of input used to produce the good.

If a good is normal, what results from an increase in income?

An increase in the demand for the good.

What does demand in a particular market refer to?

The whole demand curve.

How do two goods qualify as complements?

A decrease in the price of one good increases the demand for the other good.

What is the effect on demand for vanilla pudding if the price of bananas increases?

It would decrease.

Which point is on the market demand curve for lemonade given the quantities Spencer and Kate buy at different prices?

Quantity demanded = 7, Price = $1.50.

How is the market demand curve found?

By adding vertically the individual demand curves.

If you lose your job and buy more romance novels, what type of good are romance novels considered?

Inferior Good.

Which factor would shift the demand for watches to the left?

A decrease in consumer incomes if watches are a normal good.

What is the result of a workers' strike at an auto factory?

None of the above.

At $2, what is the quantity demanded in the market, based on the demand table?

24 units.

What happens to demand in the market if the price increases from $2 to $2.50?

Quantity demanded in the market decreases by 10 units.

Whose demand does not confirm to the law of demand?

Austen.

What happens to the current demand for razors if men who shave their hair are found to have health benefits?

Demand for razors will likely increase.

What is expected to happen to Caroline's demand for inferior goods after a pay increase?

Caroline’s demand for inferior goods will decrease.

If the price of a widget decreases, what is its relationship to the nidget if the demand for nidget increases?

Complementary good.

What would a company selling yogurt and oatmeal do based on their respective elasticities of demand?

Increase the price of yogurt and decrease the price of oatmeal.

What can be inferred if the total revenue from school lunches decreases after a price increase?

The elasticity of demand for school lunches must be elastic.

What type of demand does a person have for a prescription drug controlling high cholesterol?

Inelastic.

What indicates a consumer's response to inflation when drawing demand curves for milk and bacon?

It involves the shape of the price elasticity of demand curves.

What is the expectation for total revenue if the price of milk goes up and the price of bacon goes down?

Milk total revenue goes up, bacon total revenue goes down.

What is indicated by changes in income and inflation regarding demand for bread and cheese?

The shape of the demand curves represents consumer response.