Chapter 14 Test Review 1. Demand and supply analysis is particularly important if a. the success of your firm is closely linked to the profitability of your primary industry b. the success of yo ...

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Chapter 14 Test Review
1. Demand and supply analysis is particularly important if
a. the success of your firm is closely linked to the profitability of your primary industry
b. the success of your firm is independent of the profitability of your primary industry
c. the success of your firm is unlikely
d. demand and supply analysis is unimportant
ANSWER: a
2. If movie theatres decided to increase the price for the movie tickets, holding other factors constant,
what would happen to the demand for popcorn in the theatres?
a. the demand for popcorn would shift to the left because popcorn and movies are
substitute goods.
b. the demand for popcorn would shift to the left because popcorn and movies are
complementary goods.
c. the demand for popcorn would shift to the right because popcorn and movies are
substitute goods.
d. the demand for popcorn would shift to the right because popcorn and movies are
complementary goods.
ANSWER: b
3. Changes in the price of a product can cause
a. A movement along the demand curve
b. A shift of the demand curve
c. A shift of the supply curve
d. All of the above

ANSWER: a
4. After the housing bubble burst, consumer confidence plummeted and housing sales dropped to all-
time lows. This caused the demand curve for normal goods to shift
a. inwards
b. outwards
c. stay constant
d. none of the above
ANSWER: a
5. The change in any factor other than ________ would shift the demand curve
a. Weather
b. interest rate
c. Price
d. all of the above
ANSWER: c
6. An increase in the price of a substitute shifts the demand curve to the _______
a. right

b. left
c. it does not change the demand curve
d. none of the above
ANSWER: a
7. An increase in the price of a complement shifts the demand curve to the
a. right
b. left
c. it does not change the demand curve
d. none of the above
ANSWER: b
8. A decrease in the price of a substitute shifts the demand curve to the _______
a. right
b. left
c. it does not change the demand curve
d. none of the above
ANSWER: b

9. A decrease in the price of a complement shifts the demand curve to the
a. right
b. left
c. it does not change the demand curve
d. none of the above
ANSWER: a
10. An increase in demand could arise from which of the following factors
a. an increase in income
b. a decrease in the price of a complement
c. an increase in the price of a substitute
d. all of the above
ANSWER: d
11. An increase in demand could arise from which of the following factors
a. an increase in income
b. a decrease in the price of a substitute
c. an increase in the price of a complement
d. all of the above
ANSWER: a

12. Assuming that beer is a normal good, what will happen to the demand for beer near college towns if
student income increased?
a. Demand will fall because students love these beers
b. Demand will fall
c. Demand will rise
d. Supply woul