Demand, Demand Curve, Supply Curve, Price Change – Macroeconomics Final Test
The key terms in this Macroeconomics course include Demand, Mountain Dew, Demand Curve, Supply Curve, Price Change, Supply, Market, Cereal, Lower Point, Quantity – Principles of Macroeconomics.
You find out that the local Walmart is having a huge sale on Mountain Dew. You rush down with the intent of buying as much Mountain Dew as you can. This would be shown as
a shift rightward of the demand curve for Mountain Dew.
a shift rightward of the supply curve for Mountain Dew.
shift leftward of the demand curve for Mountain Dew.
a movement along the demand curve for Mountain Dew. – corrrect
Explanation: Since the sale involves a reduction of the price, you are going to be staying on your original demand curve, and moving to a lower point. This is a change in quantity demanded and a movement along the curve. If your purchase behavior were changing due to health concerns, for example, this would be shown as a shift of the demand curve.
You advise the owner of a local restaurant to lower the prices of his burgers. Which of the following is a consequence of this price change?
There is a decrease in demand for the restaurant burgers.
More people will cook burgers at home.
There is an increase in the demand for burgers.
There is an increase in demand for fries. – correct
Explanation: Since fries are a complement for burgers, lowering the price of the burger will increase demand for fries. Fewer people will cook burgers at home, because cooking burgers at home is a substitute good for getting burgers at a restaurant. Reducing the price of a burger will increase the quantity demanded, but will not shift the demand curve.
The market for breakfast cereal is currently in equilibrium. Suddenly there is a storm that destroys the wheat that farmers had been growing for the cereal manufacturer. What will happen to the cereal market after the storm?
Supply will increase.
Supply will decrease. – correct
Demand will increase.
Demand will decrease.
Explanation: A storm that destroyed the wheat crops would cause the price of that grain to rise. Given that grains are an important input in the manufacture of cereal, the rise in the price of grain represents an increase in input prices for cereal. This is represented in the cereal market as a leftward shift of the supply curve and no change in the demand curve.
As the owner of a hotel, you have decided to lower the price for all rooms in the month of October. What should you expect to happen?
As the price is lowered, demand for rooms will increase.
Because the price is lowered, the quantity demanded of rooms will decrease.
As the price is lowered, the quantity demanded of rooms will increase. – correct
Explanation: The law of demand states that quantity demanded will increase when price is lowered, all things being equal. In this case, more rooms will be sold. If only the price changes, apply the law of demand.
You find out that the local Walmart is having a huge sale on Mountain Dew. You rush down with the intent of buying as much Mountain Dew as you can. This would be shown as
a shift rightward of the demand curve for Mountain Dew.
a shift rightward of the supply curve for Mountain Dew.
shift leftward of the demand curve for Mountain Dew.
a movement along the demand curve for Mountain Dew. – corrrect
Explanation: Since the sale involves a reduction of the price, you are going to be staying on your original demand curve, and moving to a lower point. This is a change in quantity demanded and a movement along the curve. If your purchase behavior were changing due to health concerns, for example, this would be shown as a shift of the demand curve.