Question 1

Figure 4.7
-If demand decreases and supply increases in Figure 4.7,then the equilibrium:

Accepted Answer

A) price rises. 
B) price falls. 
C) quantity rises. 
D) quantity falls. 
A) price rises. 
B) price falls. 
C) quantity rises. 
D) quantity falls. B

Question 2

When a supply curve is drawn,which of the following is NOT held constant?

Accepted Answer

A) taxes and subsidies 
B) the state of production technology 
C) prices of inputs 
D) the price of the good 
A) taxes and subsidies 
B) the state of production technology 
C) prices of inputs 
D) the price of the good D

Question 3

The market demand curve:

Accepted Answer

A) shows the relationship between the price of a good and the quantity that all consumers together are willing to buy. 
B) is drawn assuming that variables such as income and tastes are fixed. 
C) is drawn assuming that the number of consumers is fixed. 
D) all of the above 
A) shows the relationship between the price of a good and the quantity that all consumers together are willing to buy. 
B) is drawn assuming that variables such as income and tastes are fixed. 
C) is drawn assuming that the number of consumers is fixed. 
D) all of the above D

Question 4

Suppose that ramen noodles are an inferior good.When income increases,the equilibrium quantity of ramen noodles will ________ and the equilibrium price of ramen noodles will ________.

Accepted Answer

A) rise;rise 
B) rise;fall 
C) fall;rise 
D) fall;fall 
A) rise;rise 
B) rise;fall 
C) fall;rise 
D) fall;fall

Question 5

The effect of income on the demand for normal goods is such that:

Accepted Answer

A) as the price of a normal good falls,people are likely to buy less of the good. 
B) as the price of a good falls,people are likely to buy more of all normal goods. 
C) as the price of a good falls,people are likely to buy less of all normal goods. 
D) both A and C 
A) as the price of a normal good falls,people are likely to buy less of the good. 
B) as the price of a good falls,people are likely to buy more of all normal goods. 
C) as the price of a good falls,people are likely to buy less of all normal goods. 
D) both A and C

Question 6

An increase in demand will cause the equilibrium price and quantity to rise.

Accepted Answer

A) True 
 B)False

Question 7

The substitution effect of a price change implies that as the price of a good falls,people are likely to buy less of the good whose price has fallen.

Accepted Answer

A) True 
 B)False

Question 8

Suppose you have 2 goods,X and Y.If the price of X increases and you buy more Y,then X and Y are:

Accepted Answer

A) substitutes. 
B) normal goods. 
C) complements. 
D) inferior goods. 
A) substitutes. 
B) normal goods. 
C) complements. 
D) inferior goods.

Question 9

According to the application,the increase in the price of ice cream is caused by:

Accepted Answer

A) a decrease in the output of fruit trees caused by the decline in the number of honey bees that pollinate these fruit trees. 
B) an increase in the output of fruit trees caused by the decline in the number of honey bees that pollinate these fruit trees. 
C) a decrease in the output of fruit trees caused by the rise in the number of honey bees that pollinate these fruit trees. 
D) an increase in the output of fruit trees caused by the rise in the number of honey bees that pollinate these fruit trees. 
A) a decrease in the output of fruit trees caused by the decline in the number of honey bees that pollinate these fruit trees. 
B) an increase in the output of fruit trees caused by the decline in the number of honey bees that pollinate these fruit trees. 
C) a decrease in the output of fruit trees caused by the rise in the number of honey bees that pollinate these fruit trees. 
D) an increase in the output of fruit trees caused by the rise in the number of honey bees that pollinate these fruit trees.

Question 10

Figure 4.3
-Figure 4.3 illustrates the supply and demand for blue jeans.If the actual price of blue jeans is $30,we would expect that:

Accepted Answer

A) demand will decrease until quantity demanded equals quantity supplied. 
B) supply will increase until quantity demanded equals quantity supplied. 
C) price will increase until quantity demanded equals quantity supplied. 
D) there will be no change since the market is in equilibrium. 
A) demand will decrease until quantity demanded equals quantity supplied. 
B) supply will increase until quantity demanded equals quantity supplied. 
C) price will increase until quantity demanded equals quantity supplied. 
D) there will be no change since the market is in equilibrium.

Question 11

If consumers have an expectation of a product's price increasing in the near future,they will usually:

Accepted Answer

A) wait to see if the price really increases. 
B) purchase more at the current price. 
C) wait for the new price and compare. 
D) none of the above 
A) wait to see if the price really increases. 
B) purchase more at the current price. 
C) wait for the new price and compare. 
D) none of the above

Question 12

A decrease in the amount of subsidies that a public university receives would result in:

Accepted Answer

A) an upward movement along the supply curve for college classes. 
B) an downward movement along the supply curve for college classes. 
C) a shift in the supply of college classes to the left. 
D) a shift in the supply of college classes to the right. 
A) an upward movement along the supply curve for college classes. 
B) an downward movement along the supply curve for college classes. 
C) a shift in the supply of college classes to the left. 
D) a shift in the supply of college classes to the right.

Question 13

Figure 4.3
-Figure 4.3 illustrates the supply and demand for blue jeans.If the actual price of blue jeans is $30,there is:

Accepted Answer

A) excess demand of 40 pairs of blue jeans. 
B) excess supply of 40 pairs of blue jeans. 
C) excess demand of 50 pairs of blue jeans. 
D) excess supply of 50 pairs of blue jeans. 
A) excess demand of 40 pairs of blue jeans. 
B) excess supply of 40 pairs of blue jeans. 
C) excess demand of 50 pairs of blue jeans. 
D) excess supply of 50 pairs of blue jeans.

Question 14

Figure 4.4
-Figure 4.4 illustrates the demand for guitars.Assume guitars are a normal good.An increase in income would bring about a movement from:

Accepted Answer

A) point B to point C. 
B) point B to point A. 
C) D1 to D0. 
D) D1 to D2. 
A) point B to point C. 
B) point B to point A. 
C) D1 to D0. 
D) D1 to D2.

Question 15

When the price of peanuts falls:

Accepted Answer

A) the demand for peanuts decreases. 
B) the demand for peanuts increases. 
C) the quantity demanded of peanuts decreases. 
D) the quantity demanded of peanuts increases. 
A) the demand for peanuts decreases. 
B) the demand for peanuts increases. 
C) the quantity demanded of peanuts decreases. 
D) the quantity demanded of peanuts increases.

Question 16

Suppose that the Surgeon General releases a study suggesting that orange juice consumption increases the risk for diabetes.As a result of the study,we could predict that the demand curve for orange juice will ________ and the equilibrium price will ________.

Accepted Answer

A) increase;increase 
B) increase;decrease 
C) decrease;decrease 
D) decrease;increase 
A) increase;increase 
B) increase;decrease 
C) decrease;decrease 
D) decrease;increase

Question 17

The market supply curve is:

Accepted Answer

A) downward sloping and is flatter than an individual's supply curve. 
B) upward sloping and is flatter than an individual's supply curve. 
C) downward sloping and is steeper than an individual's supply curve. 
D) upward sloping and is steeper than an individual's supply curve. 
A) downward sloping and is flatter than an individual's supply curve. 
B) upward sloping and is flatter than an individual's supply curve. 
C) downward sloping and is steeper than an individual's supply curve. 
D) upward sloping and is steeper than an individual's supply curve.

Question 18

Suppose that the current price in a market for Pizza is $9.At that price,the quantity demanded is 519 and the quantity supplied is 400.In this market,we would expect that:

Accepted Answer

A) the price of pizzas would increase. 
B) the price of pizzas would decrease. 
C) buyers would want to buy more pizza in the future. 
D) sellers would want to sell fewer pizzas in the future. 
A) the price of pizzas would increase. 
B) the price of pizzas would decrease. 
C) buyers would want to buy more pizza in the future. 
D) sellers would want to sell fewer pizzas in the future.

Question 19

If the U.S.population increases,then:

Accepted Answer

A) the demand for electricity increases. 
B) the demand for electricity decreases. 
C) the quantity demanded for electricity decreases. 
D) the quantity demanded for electricity increases. 
A) the demand for electricity increases. 
B) the demand for electricity decreases. 
C) the quantity demanded for electricity decreases. 
D) the quantity demanded for electricity increases.

Question 20

A change in the quantity demanded of a product is the result of a change in:

Accepted Answer

A) the price of the product. 
B) the price of related goods. 
C) consumer income. 
D) the cost of producing the product. 
A) the price of the product. 
B) the price of related goods. 
C) consumer income. 
D) the cost of producing the product.

Figure 4.7 -If demand decreases and supply increases in Figure 4.7,then the equilibrium:

When a supply curve is drawn,which of the following is NOT held constant?

The market demand curve:

Suppose that ramen noodles are an inferior good.When income increases,the equilibrium quantity of ramen noodles will and the equilibrium price of ramen noodles will .

The effect of income on the demand for normal goods is such that:

An increase in demand will cause the equilibrium price and quantity to rise.

The substitution effect of a price change implies that as the price of a good falls,people are likely to buy less of the good whose price has fallen.

Suppose you have 2 goods,X and Y.If the price of X increases and you buy more Y,then X and Y are:

According to the application,the increase in the price of ice cream is caused by:

Figure 4.3 -Figure 4.3 illustrates the supply and demand for blue jeans.If the actual price of blue jeans is $30,we would expect that:

If consumers have an expectation of a product's price increasing in the near future,they will usually:

A decrease in the amount of subsidies that a public university receives would result in:

Figure 4.3 -Figure 4.3 illustrates the supply and demand for blue jeans.If the actual price of blue jeans is $30,there is:

Figure 4.4 -Figure 4.4 illustrates the demand for guitars.Assume guitars are a normal good.An increase in income would bring about a movement from:

When the price of peanuts falls:

Suppose that the Surgeon General releases a study suggesting that orange juice consumption increases the risk for diabetes.As a result of the study,we could predict that the demand curve for orange juice will and the equilibrium price will .

The market supply curve is:

Suppose that the current price in a market for Pizza is $9.At that price,the quantity demanded is 519 and the quantity supplied is 400.In this market,we would expect that:

If the U.S.population increases,then:

A change in the quantity demanded of a product is the result of a change in:

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

Exam 4: Demand, supply, and Market Equilibrium

Figure 4.7 -If demand decreases and supply increases in Figure 4.7,then the equilibrium:

When a supply curve is drawn,which of the following is NOT held constant?

The market demand curve:

Suppose that ramen noodles are an inferior good.When income increases,the equilibrium quantity of ramen noodles will ________ and the equilibrium price of ramen noodles will ________.

The effect of income on the demand for normal goods is such that:

An increase in demand will cause the equilibrium price and quantity to rise.

The substitution effect of a price change implies that as the price of a good falls,people are likely to buy less of the good whose price has fallen.

Suppose you have 2 goods,X and Y.If the price of X increases and you buy more Y,then X and Y are:

According to the application,the increase in the price of ice cream is caused by:

Figure 4.3 -Figure 4.3 illustrates the supply and demand for blue jeans.If the actual price of blue jeans is $30,we would expect that:

If consumers have an expectation of a product's price increasing in the near future,they will usually:

A decrease in the amount of subsidies that a public university receives would result in:

Figure 4.3 -Figure 4.3 illustrates the supply and demand for blue jeans.If the actual price of blue jeans is $30,there is:

Figure 4.4 -Figure 4.4 illustrates the demand for guitars.Assume guitars are a normal good.An increase in income would bring about a movement from:

When the price of peanuts falls:

Suppose that the Surgeon General releases a study suggesting that orange juice consumption increases the risk for diabetes.As a result of the study,we could predict that the demand curve for orange juice will ________ and the equilibrium price will ________.

The market supply curve is:

Suppose that the current price in a market for Pizza is $9.At that price,the quantity demanded is 519 and the quantity supplied is 400.In this market,we would expect that:

If the U.S.population increases,then:

A change in the quantity demanded of a product is the result of a change in:

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

Suppose that ramen noodles are an inferior good.When income increases,the equilibrium quantity of ramen noodles will and the equilibrium price of ramen noodles will .

Suppose that the Surgeon General releases a study suggesting that orange juice consumption increases the risk for diabetes.As a result of the study,we could predict that the demand curve for orange juice will and the equilibrium price will .