Title: QUIZ: Demand Module (classic)
Course: Recommended Resources for AP Macro from FRE > Section: Unit 1: Basic Economic Concepts

Q: If a good is considered "normal" by economists, an increase in consumers' incomes will result in a decrease in the demand for the good.
- True
- False
A: False
If right: That’s correct!
If wrong: For normal goods, an increase in income will result in an increase in demand.

Q: If two goods are complements, an increase in the price of one good will cause a decrease in the demand for the other.
- True
- False
A: True
If right: That’s correct!
If wrong: If they are complements, an increase in the price of one good will cause a decrease in the demand for the other.

Q: According to the law of demand, as the price of a good or service increases, the
- demand for the good or service will decrease.
- demand for the good or service will increase.
- quantity demanded of the good or service will decrease.
- quantity demanded of the good or service will increase.
A: quantity demanded of the good or service will decrease.
If right: That’s correct!
If wrong: The law of demand says that as the price of a good or service increases, the quantity of that good or service demanded decreases.

Q: If good A is considered to be an inferior good, when incomes rise
- the demand for good A will increase, and the demand curve will shift to the right.
- the demand for good A will decrease, and the demand curve will shift to the left.
- the supply of good A will increase, and the supply curve will shift right.
- the supply of good A will decrease, and the supply curve will shift left.
A: the demand for good A will decrease, and the demand curve will shift to the left.
If right: That’s correct!
If wrong: An inferior good is a good for which demand decreases as income increases. A decrease in demand is a shift of the demand curve to the left.

Q: If the price of peanut butter were to increase, what would likely happen to the demand for jelly? 
- The demand for jelly would increase—the demand curve would shift right.
- The demand for jelly would decrease—the demand curve would shift left.
- The demand for jelly would increase—the demand curve would shift vertically upward.
- The demand for jelly would decrease—the demand curve would shift vertically downward.
A: The demand for jelly would decrease—the demand curve would shift left.
If right: That’s correct!
If wrong: Peanut butter and jelly are complementary goods. An increase in the price of peanut butter would reduce the quantity demanded of peanut butter, decreasing the demand for jelly. A decrease in demand is a shift of the demand curve to the left.

Q: An increase in the average incomes of consumers will result in
- 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.
A: an increase in the demand for goods and services.
If right: That’s correct!
If wrong: An increase in average incomes would cause the demand for goods and services to increase.

Q: An increase in the price of a good would be illustrated on a demand graph as a
- shift of the demand curve to the right.
- shift of the demand curve to the left.
- movement along the demand curve upward.
- movement along the demand curve downward.
A: movement along the demand curve upward.
If right: That’s correct!
If wrong: An increase in the price of a good or service would cause movement along the demand curve upward.

Q: If consumers expect higher coffee prices in the future,
- the demand for coffee will increase now.
- the demand for coffee will decrease now.
- the supply of coffee will increase now.
- the supply of coffee will decrease now.
A: the demand for coffee will increase now.
If right: That’s correct!
If wrong: The demand for coffee would increase now as consumers buy more coffee before an expected price increase.

Q: When the price of good A rises, people start to drink good B. In this case,
- good B is considered a luxury good.
- good B is considered a complementary good.
- good B is a substitute good.
- good B is a normal good.
A: good B is a substitute good.
If right: That’s correct!
If wrong: If an increase in the price of good A results in an increase in the demand of good B, then good B is a substitute for good A.