Question 1

Use the table below to answer the following questions.
Table 3.1.1  
-Refer to Table 3.1.1.In 2016,the relative price of coffee in terms of cola is

Accepted Answer

A) 1.25. 
B) 1.00. 
C) 0.80. 
D) 2.50. 
E) 2.00. 
A) 1.25. 
B) 1.00. 
C) 0.80. 
D) 2.50. 
E) 2.00.

Question 2

The income effect influences food purchases because when the price of a certain food rises,other things remaining the same,________.Consumers ________.

Accepted Answer

A) demand for that food increases;believe that the price may rise even further so they buy more now 
B) demand for that food decreases;buy less of the food that has experienced the price rise and more of other foods 
C) the price rises relative to income;cannot afford to buy all the things they previously bought,so they normally buy less of the food that has experienced the price rise 
D) demand for that food increases;buy more food because food is a normal good 
E) its relative price rises;purchase less of all foods because food is an inferior good 
A) demand for that food increases;believe that the price may rise even further so they buy more now 
B) demand for that food decreases;buy less of the food that has experienced the price rise and more of other foods 
C) the price rises relative to income;cannot afford to buy all the things they previously bought,so they normally buy less of the food that has experienced the price rise 
D) demand for that food increases;buy more food because food is a normal good 
E) its relative price rises;purchase less of all foods because food is an inferior good

Question 3

The money price of a litre of milk is $3.33 and the money price of a litre of gasoline is $1.11.The relative price of a litre of gasoline in terms of milk is

Accepted Answer

A) $2.22. 
B) 1/3 litre of milk. 
C) 3 litres of milk. 
D) $3.33. 
E) $1.11. 
A) $2.22. 
B) 1/3 litre of milk. 
C) 3 litres of milk. 
D) $3.33. 
E) $1.11.

Question 4

If the price is above the equilibrium price,then

Accepted Answer

A) none of the good will be sold. 
B) the price must rise further to reach the new market equilibrium. 
C) a surplus exists. 
D) a shortage exists. 
E) price will not change;producers will cut back production until the market is in equilibrium. 
A) none of the good will be sold. 
B) the price must rise further to reach the new market equilibrium. 
C) a surplus exists. 
D) a shortage exists. 
E) price will not change;producers will cut back production until the market is in equilibrium.

Question 5

The law of demand applies to food because when the price of food rises,there is

Accepted Answer

A) a substitution effect that offsets the income effect. 
B) an income effect but no substitution effect. 
C) both a substitution effect and an income effect. 
D) a substitution effect but no income effect. 
E) a substitution effect and a complement effect. 
A) a substitution effect that offsets the income effect. 
B) an income effect but no substitution effect. 
C) both a substitution effect and an income effect. 
D) a substitution effect but no income effect. 
E) a substitution effect and a complement effect.

Question 6

A shift of the supply curve for rutabagas occurs if there is

Accepted Answer

A) a change in preferences for rutabagas. 
B) a change in the price of a related good that is a substitute for rutabagas. 
C) a change in income. 
D) a change in the price of rutabagas. 
E) a flood that destroys rutabaga farms. 
A) a change in preferences for rutabagas. 
B) a change in the price of a related good that is a substitute for rutabagas. 
C) a change in income. 
D) a change in the price of rutabagas. 
E) a flood that destroys rutabaga farms.

Question 7

Use the figure below to answer the following questions.   Figure 3.2.2
-Which one of the following would result in the demand curve shifting from D1 to D2 in Figure 3.2.2?

Accepted Answer

A) an increase in the supply of pizza 
B) a rise in the price of spaghetti,a substitute for pizza 
C) a rise in the price of pizza 
D) a fall in the price of pizza 
E) a rise in the price of Coke,a complement of pizza 
A) an increase in the supply of pizza 
B) a rise in the price of spaghetti,a substitute for pizza 
C) a rise in the price of pizza 
D) a fall in the price of pizza 
E) a rise in the price of Coke,a complement of pizza

Question 8

Use the table below to answer the following questions.
Table 3.1.1  
-Refer to Table 3.1.1.In 2015,the relative price of coffee in terms of tea is

Accepted Answer

A) 2.25. 
B) 2.10. 
C) 1.00. 
D) 0.93. 
E) 1.07. 
A) 2.25. 
B) 2.10. 
C) 1.00. 
D) 0.93. 
E) 1.07.

Question 9

Some producers are chatting.Which one of the following quotations refers to a rightward shift of the supply curve?

Accepted Answer

A) "Wage increases have forced us to raise our prices." 
B) "Our new,sophisticated equipment will enable us to undercut our competitors." 
C) "Raw material prices have sky-rocketed;we will have to pass the cost on to our customers." 
D) "We anticipate a big increase in demand.Our product price should rise,so we are planning for an increase in output." 
E) "Competitors are leaving the industry." 
A) "Wage increases have forced us to raise our prices." 
B) "Our new,sophisticated equipment will enable us to undercut our competitors." 
C) "Raw material prices have sky-rocketed;we will have to pass the cost on to our customers." 
D) "We anticipate a big increase in demand.Our product price should rise,so we are planning for an increase in output." 
E) "Competitors are leaving the industry."

Question 10

Use the figure below to answer the following questions.   Figure 3.5.2
Original equilibrium at 1.
-Refer to Figure 3.5.2,which represents the market for tacos.A new scientific study reveals that tacos cause bad breath.Simultaneously,the cost of producing tacos increases.What is the new equilibrium,ceteris paribus?

Accepted Answer

A) 2 
B) 3 
C) 9 
D) 4 
E) 7 
A) 2 
B) 3 
C) 9 
D) 4 
E) 7

Question 11

Use the figure below to answer the following questions.   Figure 3.4.2
-The equilibrium price in the market illustrated by Figure 3.4.2 is

Accepted Answer

A) $2 a unit. 
B) $4 a unit. 
C) $6 a unit. 
D) $8 a unit. 
E) $10 a unit. 
A) $2 a unit. 
B) $4 a unit. 
C) $6 a unit. 
D) $8 a unit. 
E) $10 a unit.

Question 12

Which one of the following will definitely lower the equilibrium price?

Accepted Answer

A) an increase in both demand and supply 
B) a decrease in both demand and supply 
C) an increase in demand combined with a decrease in supply 
D) a decrease in demand combined with an increase in supply 
E) a decrease in supply combined with an increase in demand 
A) an increase in both demand and supply 
B) a decrease in both demand and supply 
C) an increase in demand combined with a decrease in supply 
D) a decrease in demand combined with an increase in supply 
E) a decrease in supply combined with an increase in demand

Question 13

If we observe a decrease in the equilibrium quantity of good A,we know that

Accepted Answer

A) either the demand for A has increased or the supply of A has decreased or both. 
B) either the demand for A has increased or the supply of A has increased or both. 
C) either the demand for A has decreased or the supply of A has increased or both. 
D) either the demand for A has decreased or the supply of A has decreased or both. 
E) the price of A has fallen. 
A) either the demand for A has increased or the supply of A has decreased or both. 
B) either the demand for A has increased or the supply of A has increased or both. 
C) either the demand for A has decreased or the supply of A has increased or both. 
D) either the demand for A has decreased or the supply of A has decreased or both. 
E) the price of A has fallen.

Question 14

Which market is an example of a market for goods?

Accepted Answer

A) labour market 
B) haircut market 
C) factor market 
D) apple market 
E) energy market 
A) labour market 
B) haircut market 
C) factor market 
D) apple market 
E) energy market

Question 15

Farm land can be used to produce either cattle or corn.If the demand for cattle increases,then the

Accepted Answer

A) demand for corn increases. 
B) supply of corn increases. 
C) demand for corn decreases. 
D) supply of corn decreases. 
E) price of corn falls. 
A) demand for corn increases. 
B) supply of corn increases. 
C) demand for corn decreases. 
D) supply of corn decreases. 
E) price of corn falls.

Question 16

Use the figure below to answer the following questions.   Figure 3.5.2
Original equilibrium at 1.
-Refer to Figure 3.5.2,which represents the market for tacos.A new scientific study reveals that tacos cause bad breath.Simultaneously,the cost of producing tacos decreases.What is the new equilibrium,ceteris paribus?

Accepted Answer

A) 2 
B) 3 
C) 9 
D) 4 
E) 7 
A) 2 
B) 3 
C) 9 
D) 4 
E) 7

Question 17

A decrease in the quantity supplied is shown by a

Accepted Answer

A) movement down along the supply curve. 
B) movement up along the supply curve. 
C) rightward shift of the supply curve. 
D) leftward shift of the supply curve. 
E) rightward shift of the demand curve. 
A) movement down along the supply curve. 
B) movement up along the supply curve. 
C) rightward shift of the supply curve. 
D) leftward shift of the supply curve. 
E) rightward shift of the demand curve.

Question 18

When a market is in equilibrium,

Accepted Answer

A) there is neither a surplus nor a shortage. 
B) the number of buyers equals the number of sellers. 
C) firms are producing the maximum quantity possible given the existing technology. 
D) supply equals demand. 
E) the quantity supplied is greater than or equal to the quantity demanded. 
A) there is neither a surplus nor a shortage. 
B) the number of buyers equals the number of sellers. 
C) firms are producing the maximum quantity possible given the existing technology. 
D) supply equals demand. 
E) the quantity supplied is greater than or equal to the quantity demanded.

Question 19

A shortage is the amount by which quantity

Accepted Answer

A) demanded exceeds quantity supplied. 
B) supplied exceeds quantity demanded. 
C) demanded increases when the price rises. 
D) demanded exceeds the equilibrium quantity. 
E) supplied exceeds the equilibrium quantity. 
A) demanded exceeds quantity supplied. 
B) supplied exceeds quantity demanded. 
C) demanded increases when the price rises. 
D) demanded exceeds the equilibrium quantity. 
E) supplied exceeds the equilibrium quantity.

Question 20

Which of the following will definitely result in an increase in the equilibrium price?

Accepted Answer

A) an increase in both demand and supply 
B) a decrease in both demand and supply 
C) an increase in demand combined with a decrease in supply 
D) a decrease in demand combined with an increase in supply 
E) an increase in supply combined with a decrease in demand 
A) an increase in both demand and supply 
B) a decrease in both demand and supply 
C) an increase in demand combined with a decrease in supply 
D) a decrease in demand combined with an increase in supply 
E) an increase in supply combined with a decrease in demand

Use the table below to answer the following questions. Table 3.1.1 -Refer to Table 3.1.1.In 2016,the relative price of coffee in terms of cola is

The income effect influences food purchases because when the price of a certain food rises,other things remaining the same,.Consumers .

The money price of a litre of milk is $3.33 and the money price of a litre of gasoline is $1.11.The relative price of a litre of gasoline in terms of milk is

If the price is above the equilibrium price,then

The law of demand applies to food because when the price of food rises,there is

A shift of the supply curve for rutabagas occurs if there is

Use the figure below to answer the following questions. Figure 3.2.2 -Which one of the following would result in the demand curve shifting from D₁ to D₂ in Figure 3.2.2?

Use the table below to answer the following questions. Table 3.1.1 -Refer to Table 3.1.1.In 2015,the relative price of coffee in terms of tea is

Some producers are chatting.Which one of the following quotations refers to a rightward shift of the supply curve?

Use the figure below to answer the following questions. Figure 3.4.2 -The equilibrium price in the market illustrated by Figure 3.4.2 is

Which one of the following will definitely lower the equilibrium price?

If we observe a decrease in the equilibrium quantity of good A,we know that

Which market is an example of a market for goods?

Farm land can be used to produce either cattle or corn.If the demand for cattle increases,then the

A decrease in the quantity supplied is shown by a

When a market is in equilibrium,

A shortage is the amount by which quantity

Which of the following will definitely result in an increase in the equilibrium price?

What Is Economics

The Economic Problem

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Exam 3: Demand and Supply

Use the table below to answer the following questions. Table 3.1.1 -Refer to Table 3.1.1.In 2016,the relative price of coffee in terms of cola is

The income effect influences food purchases because when the price of a certain food rises,other things remaining the same,________.Consumers ________.

The money price of a litre of milk is $3.33 and the money price of a litre of gasoline is $1.11.The relative price of a litre of gasoline in terms of milk is

If the price is above the equilibrium price,then

The law of demand applies to food because when the price of food rises,there is

A shift of the supply curve for rutabagas occurs if there is

Use the figure below to answer the following questions. Figure 3.2.2 -Which one of the following would result in the demand curve shifting from D1 to D2 in Figure 3.2.2?

Use the table below to answer the following questions. Table 3.1.1 -Refer to Table 3.1.1.In 2015,the relative price of coffee in terms of tea is

Some producers are chatting.Which one of the following quotations refers to a rightward shift of the supply curve?

Use the figure below to answer the following questions. Figure 3.4.2 -The equilibrium price in the market illustrated by Figure 3.4.2 is

Which one of the following will definitely lower the equilibrium price?

If we observe a decrease in the equilibrium quantity of good A,we know that

Which market is an example of a market for goods?

Farm land can be used to produce either cattle or corn.If the demand for cattle increases,then the

A decrease in the quantity supplied is shown by a

When a market is in equilibrium,

A shortage is the amount by which quantity

Which of the following will definitely result in an increase in the equilibrium price?

What Is Economics

The Economic Problem

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

The income effect influences food purchases because when the price of a certain food rises,other things remaining the same,.Consumers .

Use the figure below to answer the following questions. Figure 3.2.2 -Which one of the following would result in the demand curve shifting from D₁ to D₂ in Figure 3.2.2?