Question

35.

Steve went to his favorite hamburger restaurant with $3, expecting to buy a $2 hamburger and a $1 soda. When he arrived he discovered that hamburgers were on sale for $1 each, so Steve bought two hamburgers and a soda. Steve's response to the decrease in the price of hamburgers is best explained by:

A.	the substitution effect.

B.	the income effect.

C.	the price effect.

D.	a rightward shift in the demand curve for hamburgers.

36.

A recent study found that an increase in the federal tax on beer (and thus an increase in the price of beer) would reduce the demand for marijuana. We can conclude that:

A.	beer and marijuana are substitute goods.

B.	beer and marijuana are complementary goods.

C.	beer is an inferior good.

D.	marijuana is an inferior good.

37.

Which of the following would not shift the demand curve for beef?

A.	A widely publicized study that indicates beef consumption increases one's cholesterol.

B.	A reduction in the price of cattle feed.

C.	An effective advertising campaign by pork producers.

D.	A change in the incomes of beef consumers.

38.

In 2007, the price of oil increased, which in turn caused the price of natural gas to rise. This can best be explained by saying that oil and natural gas are:

A.	complementary goods and the higher price for oil increased the demand for natural gas.

B.	substitute goods and the higher price for oil increased the demand for natural gas.

C.	complementary goods and the higher price for oil decreased the supply of natural gas.

D.	substitute goods and the higher price for oil decreased the supply of natural gas.

39.

An economist for a bicycle company predicts that, other things equal, a rise in consumer incomes will increase the demand for bicycles. This prediction assumes that:

A.	there are many goods that are substitutes for bicycles.

B.	there are many goods that are complementary to bicycles.

C.	there are few goods that are substitutes for bicycles.

D.	bicycles are normal goods.