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econ. ch. 4 take home quiz
Terms in this set (19)
Price of Dr. Pepper falls from $4/6 pack to $2/6 pack. Economists would predict that Ford, who is a Dr. Pepper drinker, would go to the store and increase his QD of Dr. Pepper. What is an economic explanation for Ford, NOT buying additional Dr. Pepper?
A. He no longer likes it
B. He already purchased a large supply and doesn't need any more
C. He is suspicious of this new price decrease
When we say the Demand for a certain good is "x", this "x" may mean...
A. per day
B. per week
C. per year
D. any of these
The relationship of QD and Price is...
Demands and wants are NOT identical because...
A. Demand actually is a dollar amount
B. Wants are unattainable desires, but demand is an actualized transaction
C. Demand is for a group, wants are individual
D. Demand is subjective and wants are objective
Demand is greater at a lower price because....
people like to maximize their utility
At the concession stand, the price of hamburgers go up $1 so that more hot dogs are sold. This is an example of...
An increase in income will create a/an __________ in demand
On the demand curve, there is only 1 thing that will cause movement on the same curve from 1 point to another (change in QD) and that is...
A. Change in price of substitute goods
B. Change in price of complementary goods
C. Change in income of buyer
D. Change in price of the good being sold
If the price of the butler goes up 75%, what would you expect to happen to the demand for baking potatoes?
A. Go up, bc they are substitute goods
B. Go up, bc they are complementary goods
C. Go down, bc they are substitute goods
D. Go down, bc they are complementary goods
Expectations can affect demand. If you expect the price of gasoline to go up next week because of a hurricane in the Gulf this week, your current demand would...
Prices motivate supply because...
A. At higher prices, producers are more willing to supply more
B. At higher prices, producers are less willing to supply more
C. Suppliers are guaranteed bigger profits at higher prices
What factor change could cause a shift in supply outward (increase)?
Examples of increased supply because of producer expectations would be...
A. Increase in Producer supply following tax reform favorable to business
B. Increase in toy production before Christmas
C. Increase in charcoal production before the summer months
D. All of these
What is the economic explanation for all the car dealers in town usually located in a similar geographic location (auto row)?
makes an attractive destination for customers
When QD = QS, that state is called...
A surplus creates a _____________ pressure on prices
Should supply increase 20% and demand stay the same, price would...
Should supply stay the same and demand increase 20%, price would...
What if supply decreased 25% and demand decreased 25%? Price would...
stay the same
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