31. If average income increases, ceteris paribus, then there will be:
A) a shift of the demand curve.
B) a movement along the demand curve.
C) a movement along and a shift in the demand curve.
D) no effect on the demand curve, because income is not a ceteris paribus condition.
32. Which would be a likely cause of an increase in the price of pizza?
A) a decreased interest in take-out and fast-food dining
B) a decrease in the price of hamburgers, a substitute food
C) an increase in the price of cheese, a complement
D) a health report showing eating pizza reduces stress
33. Which will not, ceteris paribus, cause the demand curve for good A to shift?
A) a change in the price of A
B) a change in the price of B, a complement
C) a change in the price of C, a substitute
D) an increase in average income
34. Which will not cause a change in the demand for product A?
A) a change in consumer preferences
B) a change in the price of A
C) a decline in consumer incomes
D) a decrease in the price of close-substitute product B
35. A normal good is one:
A) which all people like.
B) which all normal people like.
C) for which demand increases when price decreases.
D) for which demand increases when income increases.
36. An inferior good is one:
A) that doesn’t work.
B) that costs too much.
C) that won’t be purchased at any price.
D) for which demand increases as income decreases.
37. Which goods would usually be an inferior good?
A) French wines
B) generic beer
C) theater tickets
D) steak
38. If product Y is an inferior good, an increase in consumer incomes will:
A) result in a surplus of product Y.
B) not affect the sales of product Y.
C) shift the demand curve for product Y to the left.
D) shift the demand curve for product Y to the right.
39. For most products, purchases tend to rise with increases in buyers’ incomes, and to fall with decreases in buyers’ incomes. Such products are known as:
A) inferior goods.
B) direct goods.
C) average goods.
D) normal goods.
40. For some products, purchases tend to decrease as the buyer’s income increases. Such products are known as:
A) common goods.
B) inferior goods.
C) inverse goods.
D) normal goods.
41. If an increase in consumer incomes causes the demand curve for product Q to shift to the right, then it can be said that product Q is a(n):
A) normal good.
B) luxury good.
C) inferior good.
D) inexpensive good.
42. If an increase in consumer incomes causes the demand curve for product Z to shift to the left, then it can be said that product Z is a(n):
A) normal good.
B) luxury good.
C) inferior good.
D) inexpensive good.
Use the following to answer questions 43-44:
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43. Refer to the above diagram, which shows three demand curves for coffee. Which would cause the change in the demand for coffee illustrated by the shift from D1 to D2?
A) a decrease in the price of tea
B) an increase in consumer incomes
C) an increase in the price of sugar
D) a technological improvement in the production of coffee
44. Refer to the above diagram, which shows three demand curves for coffee. Which would cause the change in the demand for coffee illustrated by the shift from D1toD3?
A) a decrease in the price of tea
B) an increase in consumer incomes
C) a decrease in the price of sugar
D) a technological improvement in the production of coffee
45. If two goods are close substitutes:
A) consumers will always buy the one that has the lower price.
B) a fall in the price of one will decrease the demand for the other.
C) an increase in the price of one causes the demand for the other to decrease.
D) a decrease in the price of one causes an increase in the demand for the other.