Q.1
All of the following are examples of complements EXCEPT
  • butter and margarine
  • cameras and film
  • peanut butter and jelly
  • flashlights and batteries
Q.2
The example of goods of Snob Appeal would be
  • Buying a Ferrari
  • Buying basic utilities
  • Buying a Car Insurance
  • Opening up a Bank Account
Q.3
Jennifer Lopez is seen wearing a new short and sleek dress. People now want this dress. Which demand determinant is this most likely to fall under?
  • Change in Consumer Income
  • Change in Consumer Tastes
  • Change in Price of Substitute Good
  • Change in Consumer Price Expectations
Q.4
If the demand for digital cameras increases when consumers' incomes rise, then digital cameras are
  • a normal good
  • an inferior good
  • a substitute good
  • a complement to video cameras
Q.5
All of the following will result in a shift in a demand curve except:
  • A change in the income of buyers
  • A change in the supply of a goo
  • A change in expected future prices
  • A change in the price of related goods
Q.6
The effect that increasing or decreasing prices has on the buying power of a person is better known as....
  • Income Effect
  • Substitution Effect
  • Diminishing Marginal Returns
  • Inflation
Q.7
Consider the market for SUVs. If the price of gasoline increases then the Demand for these vehicles will
  • increase
  • decrease
  • not be affected
Q.8
Consider the market for cellular phones. Which of the following shifts the demand curve leftward?
  • studies showing using cellular phones can cause brain cancer
  • a decrease in the price of cellular phones
  • a decrease in the quantity demanded of cellular phones
  • an increase in the services provided by cellular phones, such as text messaging
Q.9
When the price of a product increases, a consumer is able to buy less of it with a given money income. This describes:
  • the cost effect
  • the inflationary effect
  • the income effect
  • the substitution effect
Q.10
The law of demand states that
  • price and quantity demanded are inversely related
  • the larger the number of buyers in a market, the lower will be product price
  • price and quantity demanded are directly related
  • consumers will buy more of a product at high prices than at low prices
Q.11
Ramen noodles are a staple food item for many college students. Ramen noodles are very inexpensive, easy to prepare, and can be combined easily with other foods. After students graduate, find employment, and earn a higher income, they decrease their Ramen noodle purchases significantly. In this case, Ramen noodles are:
  • a normal good
  • an inferior good
  • a complement for higher income people
  • none of these are correct
Q.12
If the demand for a good increases when people's incomes increase,
  • the good is an inferior good
  • the law of demand is violated
  • the good's demand curve must be upward sloping
  • the good is a normal good
Q.13
Iceberg & romaine are two different types of lettuce. For most consumers, iceberg and romaine are
  • complements
  • substitutes
  • inferior goods
  • resources
Q.14
The phrase "a change in demand" most directly implies a
  • movement along the curve
  • movement along the price curve
  • change in quantity demanded of a good
  • shift in the demand curve
Q.15
The law of demand says that when the price of a product rises, the quantity demanded decreases. Why do people buy fewer CDs if the price of a CD rises?
  • When the price rises, people get less pleasure from listening to music
  • If CDs become more expensive, people switch to relatively less expensive alternative goods, such as cassette tapes
  • Higher prices just turn people off
  • Because CDs are a normal good
Q.16
When the price of good A rises, people start to drink good B. In this case, what is good B considered?
  • luxury good
  • complementary good
  • substitute good
  • normal good
Q.17
A decrease in the average incomes of consumers will result in which of the following?
  • A decrease in the demand for goods and services
  • An increase in the demand for goods and services
  • A decrease in the supply of goods and services
  • An increase in the supply of goods and services
Q.18
The law of demand states; there is an INVERSE relationship between price and quantity demanded. Which of the following is not a true statement?
  • Price goes up qty demanded goes down.
  • Price goes down, qty demanded goes up.
  • Price goes up, demand goes down.
  • All answers are correct.
Q.19
What is the relationship between the Price and Quantity Demanded?
  • Positive Relationship
  • Direct Relationship
  • Inverse Relationship
  • Mixed Relationship
Q.20
The quantity demanded of a good or service changes at all price levels best describes the concept of
  • change in quantity demanded
  • elasticity
  • change in demand
  • demand curve
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