Question 1

What is the difference between a shortage and scarcity?

Accepted Answer

A) Scarcity will almost always exist,but a shortage will exist only if the price is kept below the equilibrium level. 
B) Scarcity is a result of two or more alternative uses,and quantities of supply and demand adjusting to flexible prices will create shortages. 
C) A shortage will exist when a good is scarce. 
D) There is no distinction between the two.They are the same thing. 
A) Scarcity will almost always exist,but a shortage will exist only if the price is kept below the equilibrium level. 
B) Scarcity is a result of two or more alternative uses,and quantities of supply and demand adjusting to flexible prices will create shortages. 
C) A shortage will exist when a good is scarce. 
D) There is no distinction between the two.They are the same thing.

Question 2

The market price of airline flights increased recently.Some economists suggest that the price increased because of an increase in the number of business travelers.They believe that,in the market for flights:

Accepted Answer

A) supply increased. 
B) supply decreased. 
C) demand increased. 
D) demand decreased. 
A) supply increased. 
B) supply decreased. 
C) demand increased. 
D) demand decreased.

Question 3

If the supply and demand curves intersect at a price of $14,then any price below that would result in:

Accepted Answer

A) a shortage. 
B) a surplus. 
C) equilibrium. 
D) an increase in demand. 
A) a shortage. 
B) a surplus. 
C) equilibrium. 
D) an increase in demand.

Question 4

Consider two competing motorcycle manufacturers,Harley-Davidson and Honda.If Harley-Davidson raises the price of its motorcycles,we can expect:

Accepted Answer

A) a shift to the right in the supply curve of Hondas and lower prices for Hondas. 
B) a shift to the left in the supply curve of Hondas and higher prices for Hondas. 
C) a shift to the right in the demand curve for Hondas and higher prices for Hondas. 
D) a shift to the left in the demand curve for Hondas and lower prices for Hondas. 
A) a shift to the right in the supply curve of Hondas and lower prices for Hondas. 
B) a shift to the left in the supply curve of Hondas and higher prices for Hondas. 
C) a shift to the right in the demand curve for Hondas and higher prices for Hondas. 
D) a shift to the left in the demand curve for Hondas and lower prices for Hondas.

Question 5

When the price of gas goes down,the demand for tires goes up.A likely possibility is that tires and gas are:

Accepted Answer

A) substitutes. 
B) complements. 
C) both inferior goods. 
D) both inexpensive. 
A) substitutes. 
B) complements. 
C) both inferior goods. 
D) both inexpensive.

Question 6

Which factor will NOT cause an increase in the supply of good X?

Accepted Answer

A) an improvement in the technology used to produce good X 
B) an increase in the number of firms that sell good X 
C) an increase in the price of inputs used to produce good X 
D) a decrease in the price of labor used to produce good X 
A) an improvement in the technology used to produce good X 
B) an increase in the number of firms that sell good X 
C) an increase in the price of inputs used to produce good X 
D) a decrease in the price of labor used to produce good X

Question 7

Use the following to answer question:  
-(Figure: Supply of Coconuts)Use Figure: Supply of Coconuts.If the price of coconuts decreased,it would be represented in the figure as a movement from:

Accepted Answer

A) A to B. 
B) B to A. 
C) C to A. 
D) E to B. 
A) A to B. 
B) B to A. 
C) C to A. 
D) E to B.

Question 8

If goods A and B are substitutes,a decrease in the price of good B will:

Accepted Answer

A) increase the demand for good A. 
B) increase the demand for good B. 
C) decrease the demand for good A. 
D) increase the demand for good B and decrease the demand for good A. 
A) increase the demand for good A. 
B) increase the demand for good B. 
C) decrease the demand for good A. 
D) increase the demand for good B and decrease the demand for good A.

Question 9

In the market for tacos,the factor that does NOT shift the supply curve to the left is:

Accepted Answer

A) an increase in the price of beef. 
B) an increase in the wages of taco shop workers. 
C) fewer taco shops. 
D) a decrease in the price of tacos. 
A) an increase in the price of beef. 
B) an increase in the wages of taco shop workers. 
C) fewer taco shops. 
D) a decrease in the price of tacos.

Question 10

A major input into vanilla ice cream is cream.An increase in the price of cream will reduce the quantity of vanilla ice cream supplied,but it will not reduce the supply of vanilla ice cream.

Accepted Answer

A) True 
 B)False

Question 11

The law of demand implies that:

Accepted Answer

A) consumers are not responsive to price changes. 
B) consumers will buy more at lower prices. 
C) sellers will offer more on the market at higher prices. 
D) sellers will offer less on the market at lower prices. 
A) consumers are not responsive to price changes. 
B) consumers will buy more at lower prices. 
C) sellers will offer more on the market at higher prices. 
D) sellers will offer less on the market at lower prices.

Question 12

The _____ apples will decrease when apple prices rise.

Accepted Answer

A) demand for 
B) quantity demanded of 
C) supply of 
D) equilibrium of 
A) demand for 
B) quantity demanded of 
C) supply of 
D) equilibrium of

Question 13

Which factor would shift the demand curve for new textbooks to the right?

Accepted Answer

A) a decrease in the price of paper 
B) a fall in the price of used textbooks 
C) an increase in college enrollment 
D) a fall in the price of new textbooks 
A) a decrease in the price of paper 
B) a fall in the price of used textbooks 
C) an increase in college enrollment 
D) a fall in the price of new textbooks

Question 14

Use the following to answer question:  
-(Figure: Supply of Coconuts)Use Figure: Supply of Coconuts.If the prices of inputs (e.g. ,labor,fertilizer,and fuel)used to produce and transport coconuts increased,it could be represented in the figure as a movement from:

Accepted Answer

A) A to B. 
B) B to A. 
C) C to A. 
D) E to B. 
A) A to B. 
B) B to A. 
C) C to A. 
D) E to B.

Question 15

Use the following to answer question:  
-(Table: The Market for Chocolate-Covered Peanuts)Use Table: The Market for Chocolate-Covered Peanuts.A surplus of 210 bags of chocolate-covered peanuts per month exists if the price is _____ per bag.

Accepted Answer

A) $0.90 
B) $0.80 
C) $0.60 
D) $0.40 
A) $0.90 
B) $0.80 
C) $0.60 
D) $0.40

Question 16

Use the following to answer question:  
-(Figure: Shifts in Demand and Supply III)Use Figure: Shifts in Demand and Supply III.The figure shows how supply and demand might shift in response to specific events.Suppose a wet and sunny year increases the nation's corn crop by 20%.Which panel BEST describes how this will affect the market for corn?

Accepted Answer

A) Panel A 
B) Panel B 
C) Panel C 
D) Panel D 
A) Panel A 
B) Panel B 
C) Panel C 
D) Panel D

Question 17

If the market for buffalo meat is in equilibrium,the price of buffalo meat will probably _____ in the near future.

Accepted Answer

A) increase 
B) not change 
C) decrease 
D) increase considerably 
A) increase 
B) not change 
C) decrease 
D) increase considerably

Question 18

Which factor is likely to cause a rightward shift in the demand for home-delivered pizza?

Accepted Answer

A) a lower price of pizza 
B) a lower price of fast-food hamburgers 
C) a higher price of pepperoni 
D) a larger population 
A) a lower price of pizza 
B) a lower price of fast-food hamburgers 
C) a higher price of pepperoni 
D) a larger population

Question 19

An increase in the price of contact lenses will increase the supply of contact lenses.

Accepted Answer

A) True 
 B)False

Question 20

A decrease in supply of good X means:

Accepted Answer

A) a shift to the left of the entire supply curve for good X. 
B) a movement down the supply curve as prices of good X go down. 
C) that less of good X will be demanded at every price. 
D) that more of good X will be supplied at every price. 
A) a shift to the left of the entire supply curve for good X. 
B) a movement down the supply curve as prices of good X go down. 
C) that less of good X will be demanded at every price. 
D) that more of good X will be supplied at every price.

Exam 3: Supply and Demand

What is the difference between a shortage and scarcity?

The market price of airline flights increased recently.Some economists suggest that the price increased because of an increase in the number of business travelers.They believe that,in the market for flights:

If the supply and demand curves intersect at a price of $14,then any price below that would result in:

Consider two competing motorcycle manufacturers,Harley-Davidson and Honda.If Harley-Davidson raises the price of its motorcycles,we can expect:

When the price of gas goes down,the demand for tires goes up.A likely possibility is that tires and gas are:

Which factor will NOT cause an increase in the supply of good X?

Use the following to answer question: -(Figure: Supply of Coconuts)Use Figure: Supply of Coconuts.If the price of coconuts decreased,it would be represented in the figure as a movement from:

If goods A and B are substitutes,a decrease in the price of good B will:

In the market for tacos,the factor that does NOT shift the supply curve to the left is:

A major input into vanilla ice cream is cream.An increase in the price of cream will reduce the quantity of vanilla ice cream supplied,but it will not reduce the supply of vanilla ice cream.

The law of demand implies that:

The _____ apples will decrease when apple prices rise.

Which factor would shift the demand curve for new textbooks to the right?

Use the following to answer question: -(Figure: Supply of Coconuts)Use Figure: Supply of Coconuts.If the prices of inputs (e.g. ,labor,fertilizer,and fuel)used to produce and transport coconuts increased,it could be represented in the figure as a movement from:

Use the following to answer question: -(Table: The Market for Chocolate-Covered Peanuts)Use Table: The Market for Chocolate-Covered Peanuts.A surplus of 210 bags of chocolate-covered peanuts per month exists if the price is _____ per bag.

If the market for buffalo meat is in equilibrium,the price of buffalo meat will probably _____ in the near future.

Which factor is likely to cause a rightward shift in the demand for home-delivered pizza?

An increase in the price of contact lenses will increase the supply of contact lenses.

A decrease in supply of good X means:

First Principles

Economic Models: Trade-Offs and Trade

Consumer and Producer Surplus

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters