Macro Notes Notes Notes Notes

1. Other things equal, when the price of a good rises, the 

1. Quantity demanded of the good increases

2. Supply increases

3. Quantity supplied of the good increases

4. Demand curve shifts to the left

2. A movement along the supply curve might be caused by a change in

1. Technology

2. Input Prices

3. Expectations about future prices

4. The price of the good or service that is being supplied

3. Suppose you make jewelry. If the price of gold falls, we would expect you to:

1. Be willing and able to produce less jewelry than before at each possible price

2. Be willing and able to produce more jewelry than before at each possible price

3. Face a greater demand for your jewelry

4. Face a weaker demand for your jewelry

4. Which of the following demonstrates the law of demand:

1. Relative to last month, John buys more pretzels at $1.50 per pretzel, since he got a raise at work this month

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

3. Dave buys more donuts at $0.25 per donut than at $0.50 per donut, other things equal

4. Kendra buys fewer snickers at $0.60 per snickers since the price of milky ways fell to $0.50 per milky way

5. Which of the following would not be determinant of the demand for a particular good

1. Prices of related goods

2. Income

3. Taste

4. The prices of input used to produce the good

6. If a good is normal, then an increase in income will result in: 

1. An increase in quantity demanded for that good

2. An increase in the demand for the good

3. A decrease in the demand of the good

4. A movement down into the right along the demand curve for the good

5. A movement up into the left along the demand curve for the good

7. Demand in a particular market refers to

1. A particular quantity actually demanded at that moment

2. Only one point on the entire demand curve

3. Only one entry in a demand schedule

4. The whole demand curve

8. Two goods are complements if a decrease in the price of one good:

1. Decreases the demand for the other good

2. Decreases the quantity demanded of the other good

3. Increases the demand for the other good

4. Increases the quantity demanded for the other good

9. Suppose you like to make, from scratch, pies filled with banana cream and pudding. You notice that the price of bananas has increased. How would this price increase affect your demand for vanilla pudding? 

1. It would increase

2. It would decrease

3. It would be unaffected

4. There is insufficient information given to answer the question

10. Suppose Spencer and Kate are the only 2 demanders of lemonade. Each month, Spencer buys 4 glasses of lemonade where the price is a dollar per glass, and he buys 3 glasses when the price is $1.50 per glass. Each month, Kate buys 2 glasses of lemonade when the price is $1 per glass, and she buys 4 glasses when the price is $1.50 per glass. Which of the following points is on the market demand curve

1. Quantity demanded = 7, Price = $1.50

2. Quantity demanded = 13, Price = $2.50

3. Quantity demanded = 4, Price = $1.00

4. Quantity demanded = 2, Price = $1.50

11. The market demand curve: 

A is found by adding vertically the individual demand curves. 

B. Slopes Upward

C. Represents the sum of the prices that all buyers are willing to pay for a given quantity of the good

D. Represents the sum of the quantities demanded by all the buyers at each price of the good

12. You lose your job and as a result you buy more romance novels. This shows that you consider romance novels to be a 

1. Luxury good

2. Inferior Good

3. Normal Good

4. Complementary good

13. Which of the following shifts the demand for watches to the left

1. An increase in the price of watches 

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

3. A decrease in the price of watch batteries

4. An increase in the price of watches

5. None of the above

14. Assume that workers strike at an auto Factory, as a result 

A. demand for Autos shift to the left

 B, the demand for autos shift to the right

C. Quantity demanded for autos moves to the right on the curve

D. Quantity demanded for the autos moves to the left on the curve 

E. None of the above

15. The table below shows individual demand for markets

15. Refer to table 2, when the price of the good is $2, the quantity demanded in the market would be 

1. 42 units 

2. 31 units 

3. 24 units 

4. 14 units

16. If the price increases from $2 to $2.50, 

1. Demand in the market decreases by 10 units

2. Individual demand curves when drawn will shift to the left

3. Quantity demanded in the market decreases by 6 units

4. Quantity demanded in the market decreases by 10 units

??17. Whose demand does not confirm to the law of demand

a.Aaron

b.Angela

c.Austen

d.Alyssa

18. Suppose the American Medical Association discovers that men who shave their hair are less likely to die of heart failure. We can expect the current demand for 

1. Hair gel to increase

2. Razors to increase

3. Combs to increase

4. None of the above are correct

???19. Suppose that Caroline receives a pay increase. We would expect

1. To observe Caroline moving down and to the right along her given demand curve

2. Caroline’s demand for inferior goods to decrease

3. Caroline’s demand for each of the two goods that are complements to increase

4. Caroline’s demand for normal goods to decrease

??20. If the price of a widget decreases, and as a consequences the demand for a nidget increases, a widget is, in relationship to a nidget:

1. A substitute good 

2. Complementary good

3. Independent good

4. Inferior good

21. For yogurt, the elasticity of demand is less than 1, for oatmeal the elasticity of demand is more than 1. A company selling yogurt and oatmeal would be wise to:

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

2. Decrease the price of yogurt and increase the price of oatmeal

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

4. Decrease the price of yogurt and the price of oatmeal

22. If the price of lunch at the school cafeteria increases and total revenue received decreases, then the elasticity of demand for school lunches must be:

1. Elastic

2. Inelastic

3. Unitary elastic

4. More information is necessary

23. A person who takes a prescription drug to control high cholesterol most likely has a demand for that drug that is

1. Inelastic

2. Unit elastic

3. Elastic

4. Highly responsive to changes in income

24. Inflation has affected what consumers are willing and able to buy at the supermarket. Showing the consumers response to inflation, draw a curve displaying the price elasticity of demand for milk and one for bacon. No need for numbers on the graph, the shape of your curve is the key

25. Do your curves indicate that total revenue will be up or down for each one? 

Milk total revenue up or down, bacon total revenue up or down 

Milk up, bacon down

Changes in income and inflation have influenced what consumers are willing and able to purchase at Shoprite. Showing the consumers' response to income changes, draw a curve displaying the price elasticity of demand for bread and one for cheese.