Question 1

As the price of a pound of peanuts falls, the

Accepted Answer

A)  demand for peanuts increases. 
B)  demand for peanuts decreases. 
C)  quantity of peanuts demanded increases. 
D)  Both answers A and C are correct. 
A)  demand for peanuts increases. 
B)  demand for peanuts decreases. 
C)  quantity of peanuts demanded increases. 
D)  Both answers A and C are correct.

Question 2

-In the figure above, a decrease in the quantity of oil supplied but NOT a decrease in the supply of oil is shown by a movement from

Accepted Answer

A)  point a to point e. 
B)  point a to point b. 
C)  point a to point c. 
D)  point a to point d. 
A)  point a to point e. 
B)  point a to point b. 
C)  point a to point c. 
D)  point a to point d.

Question 3

If the price of product X falls and this change increases the demand for product Y, then

Accepted Answer

A)  X and Y are complements. 
B)  X and Y are substitutes. 
C)  X is an inferior good. 
D)  Y is an inferior good. 
A)  X and Y are complements. 
B)  X and Y are substitutes. 
C)  X is an inferior good. 
D)  Y is an inferior good.

Question 4

The demand curve for a normal good shifts leftward if income ________ or the expected future price ________.

Accepted Answer

A)  decreases; falls 
B)  decreases; rises 
C)  increases; falls 
D)  increases; rises 
A)  decreases; falls 
B)  decreases; rises 
C)  increases; falls 
D)  increases; rises

Question 5

When there is a shortage in the market, the quantity sold is

Accepted Answer

A)  greater than the quantity supplied. 
B)  equal to the quantity supplied. 
C)  less than the quantity supplied. 
D)  less than the quantity bought. 
A)  greater than the quantity supplied. 
B)  equal to the quantity supplied. 
C)  less than the quantity supplied. 
D)  less than the quantity bought.

Question 6

What is the effect on the price and quantity of wooden desks of a rise in the price of wood?

Accepted Answer

A)  The equilibrium quantity of wooden desks increases and the equilibrium price falls. 
B)  The equilibrium quantity of wooden desks increases and the equilibrium price rises. 
C)  The equilibrium quantity of wooden desks decreases and the equilibrium price falls. 
D)  The equilibrium quantity of wooden desks decreases and the equilibrium price rises. 
A)  The equilibrium quantity of wooden desks increases and the equilibrium price falls. 
B)  The equilibrium quantity of wooden desks increases and the equilibrium price rises. 
C)  The equilibrium quantity of wooden desks decreases and the equilibrium price falls. 
D)  The equilibrium quantity of wooden desks decreases and the equilibrium price rises.

Question 7

The relative price of a good is

Accepted Answer

A)  an opportunity cost. 
B)  equal to the money price of a good. 
C)  equal to the price of that good divided by the quantity demanded of the good. 
D)  what you get paid for babysitting your cousin. 
A)  an opportunity cost. 
B)  equal to the money price of a good. 
C)  equal to the price of that good divided by the quantity demanded of the good. 
D)  what you get paid for babysitting your cousin.

Question 8

-In the above figure, a price of $35 per dozen would result in

Accepted Answer

A)  a shortage. 
B)  equilibrium. 
C)  a surplus. 
D)  upward pressure on prices. 
A)  a shortage. 
B)  equilibrium. 
C)  a surplus. 
D)  upward pressure on prices.

Question 9

-The figure above shows the demand for fruit snacks. Which movement reflects how consumers would react to an increase in the price of a non-fruit snack?

Accepted Answer

A)  from point a to point e 
B)  from point a to point b 
C)  from point a to point c 
D)  from point a to point d 
A)  from point a to point e 
B)  from point a to point b 
C)  from point a to point c 
D)  from point a to point d

Question 10

-The figure illustrates the demand for and supply for jeans. Suppose jeans are a normal good and people's incomes increase. At the initial price of $50 for a pair of jeans, after the increase in income the quantity demanded is ________ than the equilibrium quantity and there is a ________ of jeans.

Accepted Answer

A)  greater; surplus 
B)  greater; shortage 
C)  less; surplus 
D)  less; shortage 
A)  greater; surplus 
B)  greater; shortage 
C)  less; surplus 
D)  less; shortage

Question 11

-The above figure shows the market for pizza. Which figure shows the effect of a decrease in the price of a hamburger, which for consumers is a substitute for pizza?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure D 
D)  Figures B and C 
A)  Figure A 
B)  Figure B 
C)  Figure D 
D)  Figures B and C

Question 12

At a price of $10 in the above figure, there is

Accepted Answer

A)  a surplus of 200 units. 
B)  a shortage of 200 units. 
C)  a surplus of 400 units. 
D)  a shortage of 400 units. 
A)  a surplus of 200 units. 
B)  a shortage of 200 units. 
C)  a surplus of 400 units. 
D)  a shortage of 400 units.

Question 13

-A market research team has come up with the demand and supply schedules for gasoline in Motorville in the table above. Use these data to analyze the situation in the market for gas in Motorville.
a) Draw a figure showing the demand curve for gasoline and the supply curve of gasoline. What are the equilibrium price and quantity?
b) Suppose the price is $3.30. Describe the situation in the market and explain how the market adjusts. Now suppose the price is $3.00. Describe the situation in the market and explain how the market adjusts.
c) The market research report also predicts that a rise in the price of crude oil will decrease the quantity of gas supplied by 20,000 gallons a week at each price. Suppose the price of crude oil does rise. Use your figure to show how this will affect the market for gas. How will the market adjust? What will be the new equilibrium price and quantity?

Accepted Answer

@#IMG-DLM& a) See the figure above. The equilibriu

Question 14

The Market for Wapanzo Beans
Quantity Demanded Price Quantity Supplied
(millions of pounds (dollars per (millions of pounds
per year) pound) per year)  
-Refer to the table above. Suppose that in normal years demand is represented by Case 2 and supply is represented by Case B. In a normal year the equilibrium quantity of wapanzo beans will be

Accepted Answer

A)  2 million pounds. 
B)  4 million pounds. 
C)  6 million pounds. 
D)  8 million pounds. 
A)  2 million pounds. 
B)  4 million pounds. 
C)  6 million pounds. 
D)  8 million pounds.

Question 15

-The figure above shows the market for airline tickets. If airline tickets are a normal good, then the recession in 2008 that caused people's incomes to decrease lead to a shift from

Accepted Answer

A)  D0 to D1. 
B)  D1 to D0. 
C)  S0 to S1. 
D)  S1 to S0. 
A)  D0 to D1. 
B)  D1 to D0. 
C)  S0 to S1. 
D)  S1 to S0.

Question 16

Normal goods are those for which demand decreases as

Accepted Answer

A)  the price of a complement falls. 
B)  the price of a substitute falls. 
C)  income decreases. 
D)  the good's own price rises. 
A)  the price of a complement falls. 
B)  the price of a substitute falls. 
C)  income decreases. 
D)  the good's own price rises.

Question 17

-Using the above figure, suppose that roses are a normal good. If there is an increase in income,

Accepted Answer

A)  the equilibrium price will rise above $25 per dozen roses. 
B)  the equilibrium quantity will decrease below 10 dozen roses. 
C)  we cannot predict what will happen to the equilibrium price. 
D)  we cannot predict what will happen to the equilibrium quantity. 
A)  the equilibrium price will rise above $25 per dozen roses. 
B)  the equilibrium quantity will decrease below 10 dozen roses. 
C)  we cannot predict what will happen to the equilibrium price. 
D)  we cannot predict what will happen to the equilibrium quantity.

Question 18

-The figure above shows the demand for fruit snacks. Which movement reflects a decrease in demand?

Accepted Answer

A)  from point a to point e 
B)  from point a to point b 
C)  from point a to point c 
D)  from point a to point d 
A)  from point a to point e 
B)  from point a to point b 
C)  from point a to point c 
D)  from point a to point d

Question 19

If a decrease in the price of gasoline increases the demand for large cars, then

Accepted Answer

A)  gasoline and large cars are substitutes in consumption. 
B)  gasoline and large cars are complements in consumption. 
C)  gasoline is an inferior good. 
D)  large cars are an inferior good. 
A)  gasoline and large cars are substitutes in consumption. 
B)  gasoline and large cars are complements in consumption. 
C)  gasoline is an inferior good. 
D)  large cars are an inferior good.

Question 20

Producers of DVDs are able to lower the wage rate that they pay to their workers. You predict that the

Accepted Answer

A)  price will rise. 
B)  quantity supplied will decrease. 
C)  supply curve will shift leftward. 
D)  supply curve will shift rightward. 
A)  price will rise. 
B)  quantity supplied will decrease. 
C)  supply curve will shift leftward. 
D)  supply curve will shift rightward.

Exam 3: Demand and Supply

As the price of a pound of peanuts falls, the

-In the figure above, a decrease in the quantity of oil supplied but NOT a decrease in the supply of oil is shown by a movement from

If the price of product X falls and this change increases the demand for product Y, then

The demand curve for a normal good shifts leftward if income ________ or the expected future price ________.

When there is a shortage in the market, the quantity sold is

What is the effect on the price and quantity of wooden desks of a rise in the price of wood?

The relative price of a good is

-In the above figure, a price of $35 per dozen would result in

-The figure above shows the demand for fruit snacks. Which movement reflects how consumers would react to an increase in the price of a non-fruit snack?

-The figure illustrates the demand for and supply for jeans. Suppose jeans are a normal good and people's incomes increase. At the initial price of $50 for a pair of jeans, after the increase in income the quantity demanded is ________ than the equilibrium quantity and there is a ________ of jeans.

-The above figure shows the market for pizza. Which figure shows the effect of a decrease in the price of a hamburger, which for consumers is a substitute for pizza?

At a price of $10 in the above figure, there is

-The figure above shows the market for airline tickets. If airline tickets are a normal good, then the recession in 2008 that caused people's incomes to decrease lead to a shift from

Normal goods are those for which demand decreases as

-Using the above figure, suppose that roses are a normal good. If there is an increase in income,

-The figure above shows the demand for fruit snacks. Which movement reflects a decrease in demand?

If a decrease in the price of gasoline increases the demand for large cars, then

Producers of DVDs are able to lower the wage rate that they pay to their workers. You predict that the

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

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices and Public Goods

Externalities and the Environment

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Extension A: Review

Extension B: Review

Extension C: Review

Extension D: Review

Extension E: Review

Extension F: Review

Filters

The demand curve for a normal good shifts leftward if income or the expected future price .

-The figure illustrates the demand for and supply for jeans. Suppose jeans are a normal good and people's incomes increase. At the initial price of $50 for a pair of jeans, after the increase in income the quantity demanded is than the equilibrium quantity and there is a of jeans.