Question 1

If demand decreases and supply increases,then the

Accepted Answer

A) equilibrium quantity increases,but the effect on the equilibrium price is unknown. 
B) equilibrium quantity decreases,but the effect on the equilibrium price is unknown. 
C) equilibrium price falls,but the effect on the equilibrium quantity is unknown. 
D) equilibrium price rises,but the effect on the equilibrium quantity is unknown. 
E) effect on both equilibrium price and quantity is unknown. 
A) equilibrium quantity increases,but the effect on the equilibrium price is unknown. 
B) equilibrium quantity decreases,but the effect on the equilibrium price is unknown. 
C) equilibrium price falls,but the effect on the equilibrium quantity is unknown. 
D) equilibrium price rises,but the effect on the equilibrium quantity is unknown. 
E) effect on both equilibrium price and quantity is unknown.

Question 2

Which of the following decreases the supply of popcorn?

Accepted Answer

A) a decrease in the price of popcorn 
B) an increase in the price of popcorn 
C) a technological advance in the production of popcorn 
D) a decrease in the demand for popcorn 
E) a decrease in the number of popcorn producers 
A) a decrease in the price of popcorn 
B) an increase in the price of popcorn 
C) a technological advance in the production of popcorn 
D) a decrease in the demand for popcorn 
E) a decrease in the number of popcorn producers

Question 3

Use the information below to answer the following questions.
Fact 3.5.1
The market for coffee is initially in equilibrium.Pepsi is a substitute for coffee;cream is a complement of coffee.Consider the market for coffee.Assume that all ceteris paribus assumptions continue to hold except for the event listed.
-Refer to Fact 3.5.1.The price of cream falls.Simultaneously,there is an increase in the wages of farm workers who harvest coffee beans.The equilibrium quantity of coffee

Accepted Answer

A) increases. 
B) decreases. 
C) remains the same. 
D) increases or decreases depending on the slope of the supply and demand curves. 
E) increases,decreases,or remains the same depending on the relative shifts of the supply and demand curves. 
A) increases. 
B) decreases. 
C) remains the same. 
D) increases or decreases depending on the slope of the supply and demand curves. 
E) increases,decreases,or remains the same depending on the relative shifts of the supply and demand curves.

Question 4

If the market for Twinkies is in equilibrium,then

Accepted Answer

A) Twinkies must be a normal good. 
B) producers would like to sell less at the current price. 
C) consumers would like to buy less at the current price. 
D) the quantity supplied equals the quantity demanded. 
E) the supply of Twinkies will never increase and the demand for Twinkies will never decrease. 
A) Twinkies must be a normal good. 
B) producers would like to sell less at the current price. 
C) consumers would like to buy less at the current price. 
D) the quantity supplied equals the quantity demanded. 
E) the supply of Twinkies will never increase and the demand for Twinkies will never decrease.

Question 5

Consider the market for smartphones.Suppose the price of a smartphone falls.Explain the effect of this event on the quantity of smartphones demanded and on the demand for smartphones.

Accepted Answer

A) The quantity of smartphones demanded is unchanged and the demand for smartphones increases. 
B) The quantity of smartphones demanded decreases and the demand for smartphones is unchanged. 
C) The quantity of smartphones demanded increases and the demand for smartphones is unchanged. 
D) The quantity of smartphones demanded increases and the demand for smartphones also increases. 
E) The quantity of smartphones demanded is unchanged and the demand for smartphones decreases. 
A) The quantity of smartphones demanded is unchanged and the demand for smartphones increases. 
B) The quantity of smartphones demanded decreases and the demand for smartphones is unchanged. 
C) The quantity of smartphones demanded increases and the demand for smartphones is unchanged. 
D) The quantity of smartphones demanded increases and the demand for smartphones also increases. 
E) The quantity of smartphones demanded is unchanged and the demand for smartphones decreases.

Question 6

A decrease in quantity demanded is represented by a

Accepted Answer

A) rightward shift of the supply curve. 
B) rightward shift of the demand curve. 
C) leftward shift of the demand curve. 
D) movement upward and to the left along the demand curve. 
E) movement downward and to the right along the demand curve. 
A) rightward shift of the supply curve. 
B) rightward shift of the demand curve. 
C) leftward shift of the demand curve. 
D) movement upward and to the left along the demand curve. 
E) movement downward and to the right along the demand curve.

Question 7

Use the table below to answer the following questions.
Table 3.5.4
Quantities demanded and supplied in equilibrium
before and after a drought strikes potato farms
  
-In Table 3.5.4 potatoes and rice are

Accepted Answer

A) substitutes in Region 1 and complements in Region 2. 
B) substitutes in Region 2 and complements in Region 1. 
C) complements in both regions. 
D) substitutes in both regions. 
E) unrelated goods in both regions. 
A) substitutes in Region 1 and complements in Region 2. 
B) substitutes in Region 2 and complements in Region 1. 
C) complements in both regions. 
D) substitutes in both regions. 
E) unrelated goods in both regions.

Question 8

A rise in the price of a good

Accepted Answer

A) decreases demand for the good. 
B) creates a movement up along the supply curve. 
C) creates a movement down along the demand curve. 
D) increases the supply of the good. 
E) decreases the supply of the good. 
A) decreases demand for the good. 
B) creates a movement up along the supply curve. 
C) creates a movement down along the demand curve. 
D) increases the supply of the good. 
E) decreases the supply of the good.

Question 9

Suppose we observe a rise in the price of good A and a decrease in the quantity of good A bought and sold.Which one of the following is a likely explanation?

Accepted Answer

A) The law of supply is violated. 
B) The demand for A decreased. 
C) The demand for A increased. 
D) The supply of A increased. 
E) The supply of A decreased. 
A) The law of supply is violated. 
B) The demand for A decreased. 
C) The demand for A increased. 
D) The supply of A increased. 
E) The supply of A decreased.

Question 10

Use the information below to answer the following questions.
Fact 3.5.1
The market for coffee is initially in equilibrium.Pepsi is a substitute for coffee;cream is a complement of coffee.Consider the market for coffee.Assume that all ceteris paribus assumptions continue to hold except for the event listed.
-Refer to Fact 3.5.1.An increase in the price of Pepsi,a substitute for coffee will

Accepted Answer

A) increase the price and the quantity demanded of coffee. 
B) increase the price and the quantity supplied of coffee. 
C) decrease the price and the quantity demanded of coffee. 
D) decrease the price and the quantity supplied of coffee. 
E) increase the supply of coffee. 
A) increase the price and the quantity demanded of coffee. 
B) increase the price and the quantity supplied of coffee. 
C) decrease the price and the quantity demanded of coffee. 
D) decrease the price and the quantity supplied of coffee. 
E) increase the supply of coffee.

Question 11

If both demand and supply increase,then the equilibrium price

Accepted Answer

A) and equilibrium quantity increases. 
B) falls but the equilibrium quantity increases. 
C) could either rise or fall,but the equilibrium quantity increases. 
D) rises,and the equilibrium quantity could either increase or decrease. 
E) falls,and the equilibrium quantity could either increase or decrease. 
A) and equilibrium quantity increases. 
B) falls but the equilibrium quantity increases. 
C) could either rise or fall,but the equilibrium quantity increases. 
D) rises,and the equilibrium quantity could either increase or decrease. 
E) falls,and the equilibrium quantity could either increase or decrease.

Question 12

The quantity of gasoline supplied

Accepted Answer

A) increases when all speed limits on highways are abolished. 
B) increases when the price of crude oil rises. 
C) decreases when robots cut car production costs. 
D) increases when the price of a car rises. 
E) decreases when the price of crude oil rises. 
A) increases when all speed limits on highways are abolished. 
B) increases when the price of crude oil rises. 
C) decreases when robots cut car production costs. 
D) increases when the price of a car rises. 
E) decreases when the price of crude oil rises.

Question 13

Use the figure below to answer the following questions.   Figure 3.4.2
-At a price of $4 a unit in Figure 3.4.2,

Accepted Answer

A) the equilibrium quantity is 400 units. 
B) there is a surplus of 200 units. 
C) the quantity supplied is 400 units. 
D) there is a shortage of 200 units. 
E) the quantity demanded is 200 units. 
A) the equilibrium quantity is 400 units. 
B) there is a surplus of 200 units. 
C) the quantity supplied is 400 units. 
D) there is a shortage of 200 units. 
E) the quantity demanded is 200 units.

Question 14

All grapefruit juice producers have decided to blend tangerine juice with grapefruit juice.This blend results in a higher cost of production,but studies show that consumers prefer the taste of the blend to straight grapefruit juice.What will happen to the equilibrium price and quantity of grapefruit juice?

Accepted Answer

A) The equilibrium price falls and the equilibrium quantity increases. 
B) The equilibrium quantity increases but the effect on the equilibrium price is uncertain. 
C) The equilibrium price rises but the effect on the equilibrium quantity is uncertain. 
D) The equilibrium price rises and the equilibrium quantity increases. 
E) The equilibrium price rises and the equilibrium quantity remains unchanged. 
A) The equilibrium price falls and the equilibrium quantity increases. 
B) The equilibrium quantity increases but the effect on the equilibrium price is uncertain. 
C) The equilibrium price rises but the effect on the equilibrium quantity is uncertain. 
D) The equilibrium price rises and the equilibrium quantity increases. 
E) The equilibrium price rises and the equilibrium quantity remains unchanged.

Question 15

Crude oil is a very important factor of production used in the production of gasoline.If the price of crude oil rises,we would expect the

Accepted Answer

A) price of gasoline to rise due to an increase in demand. 
B) price of gasoline to fall due to an increase in demand. 
C) price of gasoline to rise due to a decrease in supply. 
D) equilibrium quantity of gasoline to fall due to an increase in supply. 
E) equilibrium quantity of gasoline to rise due to an increase in demand. 
A) price of gasoline to rise due to an increase in demand. 
B) price of gasoline to fall due to an increase in demand. 
C) price of gasoline to rise due to a decrease in supply. 
D) equilibrium quantity of gasoline to fall due to an increase in supply. 
E) equilibrium quantity of gasoline to rise due to an increase in demand.

Question 16

Suppose income increases.Choose the correct statement.

Accepted Answer

A) The equilibrium price of a turnip falls if a turnip is an inferior good. 
B) The equilibrium price of a turnip rises if a turnip is an inferior good. 
C) The equilibrium quantity of turnips increases if a turnip is an inferior good. 
D) The supply of turnips decreases if a turnip is an inferior good. 
E) The supply of turnips decreases if a turnip is a normal good. 
A) The equilibrium price of a turnip falls if a turnip is an inferior good. 
B) The equilibrium price of a turnip rises if a turnip is an inferior good. 
C) The equilibrium quantity of turnips increases if a turnip is an inferior good. 
D) The supply of turnips decreases if a turnip is an inferior good. 
E) The supply of turnips decreases if a turnip is a normal good.

Question 17

Good A is a normal good if

Accepted Answer

A) a rise in the price of a complement causes the demand for A to decrease. 
B) income and the demand for A are negatively related. 
C) a rise in the price of a substitute causes the demand for A to increase. 
D) the demand for A increases when income rises. 
E) good A satisfies the law of demand. 
A) a rise in the price of a complement causes the demand for A to decrease. 
B) income and the demand for A are negatively related. 
C) a rise in the price of a substitute causes the demand for A to increase. 
D) the demand for A increases when income rises. 
E) good A satisfies the law of demand.

Question 18

Use the figure below to answer the following questions.
Table 3.5.2
Demand and Supply Schedules for Cups of Coffee each day at CoolU
  
-Refer to Table 3.5.2.The equilibrium price is $________ and the equilibrium quantity is ________ cups a day.

Accepted Answer

A) 1.30;1200 
B) 0.90;1000 
C) 1.10;900 
D) 1.10;800 
E) 1.00;800 
A) 1.30;1200 
B) 0.90;1000 
C) 1.10;900 
D) 1.10;800 
E) 1.00;800

Question 19

Today,the price of peanuts increases.Peanut butter producers and peanut butter consumers expect that the price of peanut butter will rise in the future.In the current market for peanut butter,the equilibrium price rises and the equilibrium quantity increases.It must be the case that

Accepted Answer

A) the supply of peanut butter decreased by more than the demand for peanut butter increased. 
B) the supply of peanut butter decreased by more than the demand for peanut butter decreased. 
C) the demand for peanut butter increased by more than the supply of peanut butter decreased. 
D) the demand for peanut butter increased by more than the supply of peanut butter increased. 
E) peanut butter producers and peanut butter consumers have incorrect expectations. 
A) the supply of peanut butter decreased by more than the demand for peanut butter increased. 
B) the supply of peanut butter decreased by more than the demand for peanut butter decreased. 
C) the demand for peanut butter increased by more than the supply of peanut butter decreased. 
D) the demand for peanut butter increased by more than the supply of peanut butter increased. 
E) peanut butter producers and peanut butter consumers have incorrect expectations.

Question 20

A technological improvement in the production of good A

Accepted Answer

A) decreases the supply of A. 
B) increases the demand for A. 
C) decreases the equilibrium price of A and decreases the equilibrium quantity. 
D) decreases the quantity demanded of A. 
E) increases the supply of A. 
A) decreases the supply of A. 
B) increases the demand for A. 
C) decreases the equilibrium price of A and decreases the equilibrium quantity. 
D) decreases the quantity demanded of A. 
E) increases the supply of A.

If demand decreases and supply increases,then the

Which of the following decreases the supply of popcorn?

If the market for Twinkies is in equilibrium,then

Consider the market for smartphones.Suppose the price of a smartphone falls.Explain the effect of this event on the quantity of smartphones demanded and on the demand for smartphones.

A decrease in quantity demanded is represented by a

Use the table below to answer the following questions. Table 3.5.4 Quantities demanded and supplied in equilibrium before and after a drought strikes potato farms -In Table 3.5.4 potatoes and rice are

A rise in the price of a good

Suppose we observe a rise in the price of good A and a decrease in the quantity of good A bought and sold.Which one of the following is a likely explanation?

If both demand and supply increase,then the equilibrium price

The quantity of gasoline supplied

Use the figure below to answer the following questions. Figure 3.4.2 -At a price of $4 a unit in Figure 3.4.2,

Crude oil is a very important factor of production used in the production of gasoline.If the price of crude oil rises,we would expect the

Suppose income increases.Choose the correct statement.

Good A is a normal good if

Use the figure below to answer the following questions. Table 3.5.2 Demand and Supply Schedules for Cups of Coffee each day at CoolU -Refer to Table 3.5.2.The equilibrium price is $ and the equilibrium quantity is cups a day.

Today,the price of peanuts increases.Peanut butter producers and peanut butter consumers expect that the price of peanut butter will rise in the future.In the current market for peanut butter,the equilibrium price rises and the equilibrium quantity increases.It must be the case that

A technological improvement in the production of good A

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

If demand decreases and supply increases,then the

Which of the following decreases the supply of popcorn?

If the market for Twinkies is in equilibrium,then

Consider the market for smartphones.Suppose the price of a smartphone falls.Explain the effect of this event on the quantity of smartphones demanded and on the demand for smartphones.

A decrease in quantity demanded is represented by a

Use the table below to answer the following questions. Table 3.5.4 Quantities demanded and supplied in equilibrium before and after a drought strikes potato farms -In Table 3.5.4 potatoes and rice are

A rise in the price of a good

Suppose we observe a rise in the price of good A and a decrease in the quantity of good A bought and sold.Which one of the following is a likely explanation?

If both demand and supply increase,then the equilibrium price

The quantity of gasoline supplied

Use the figure below to answer the following questions. Figure 3.4.2 -At a price of $4 a unit in Figure 3.4.2,

Crude oil is a very important factor of production used in the production of gasoline.If the price of crude oil rises,we would expect the

Suppose income increases.Choose the correct statement.

Good A is a normal good if

Use the figure below to answer the following questions. Table 3.5.2 Demand and Supply Schedules for Cups of Coffee each day at CoolU -Refer to Table 3.5.2.The equilibrium price is $________ and the equilibrium quantity is ________ cups a day.

Today,the price of peanuts increases.Peanut butter producers and peanut butter consumers expect that the price of peanut butter will rise in the future.In the current market for peanut butter,the equilibrium price rises and the equilibrium quantity increases.It must be the case that

A technological improvement in the production of good A

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

Use the figure below to answer the following questions. Table 3.5.2 Demand and Supply Schedules for Cups of Coffee each day at CoolU -Refer to Table 3.5.2.The equilibrium price is $ and the equilibrium quantity is cups a day.