ECON 101 Principles of Microeconomics 2017W Term 2 Quiz Ch 3

ECON 101 Principles of Microeconomics, 2017W Term 2 Quiz: Ch 3 Quiz This Question: 1 pt yixuan zhang | 1/28/18 9:46 PM Time Remaining: 01:13:00 Submit Q 1of15 (7 complete) This Quiz: 22 pts poss Imagine that the table on the right shows the quantity demanded of UGG boots at five different prices in 2016 and in 2017 Quantity Quantity Demanded Demanded Price $160 170 180 190 Which of the following variables could cause the demand for UGG boots to change as indicated from 2016 to 2017? (Check all that apply) 2016 6,000 5,500 5,000 4,500 4,000 2017 4,500 4,000 3,500 3,000 ol A. B. Anincrease in the price of UGG boots. C. The expectation that UGG boots will rise in price D. An increase in the price of a complementary good Ade rease in the number of buyers. Click to select your answeris).

Solution

Demand for UGG boots has fallen for all levels of prices.

Correct Answer: A, B, and D

Explanation:

A) A decrease in the number of buyers would result in a decrease in the demand for boots as there will be lesser people demanding the product.

B) The increase in the price of boots will lead to a decrease in the demand as less number of people would be willing to pay a higher price.

C) The expectation that the price of boots will rise in the future will lead to increase in its demand and not decrease. If due to some reason, consumers expect that in the near future prices of the goods would rise, then in the present they would demand greater quantities of the goods so that in the future they should not have to pay higher prices.

D) The increase in the price of the complementary goods, such as an increase in the price of shoe polish, would lead to a decrease in the demand for the boots as it would become expensive to maintain such shoes.