Question 1

-The above figures show the market for oranges. Which figure(s) shows the effect of a nation-wide consumer boycott of eating oranges?

Accepted Answer

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

Question 2

A decrease in the demand for beef because of concerns over cholesterol results in

Accepted Answer

A)  lower beef prices. 
B)  higher beef prices. 
C)  an increase in the supply of beef. 
D)  an offsetting increase in the demand for beef if the price of beef falls. 
A)  lower beef prices. 
B)  higher beef prices. 
C)  an increase in the supply of beef. 
D)  an offsetting increase in the demand for beef if the price of beef falls.

Question 3

-The above figures show the market for gasoline. Which figure(s) shows the effect of a freezing cold winter which drives up the price of home heating oil (a substitute in production for gasoline because each is made from crude oil)?

Accepted Answer

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

Question 4

The "law of demand" predicts that, other things being equal,

Accepted Answer

A)  an increase in the price of downloaded music decreases the demand for downloaded music. 
B)  a decrease in the price of gasoline decreases the quantity of gasoline demanded. 
C)  an increase in the price of pizza decreases the quantity of pizza demanded. 
D)  an increase in the price of coffee decreases the quantity of tea demanded. 
A)  an increase in the price of downloaded music decreases the demand for downloaded music. 
B)  a decrease in the price of gasoline decreases the quantity of gasoline demanded. 
C)  an increase in the price of pizza decreases the quantity of pizza demanded. 
D)  an increase in the price of coffee decreases the quantity of tea demanded.

Question 5

A decrease in quantity demanded because of an increase in price is represented by a

Accepted Answer

A)  rightward shift of the demand curve. 
B)  leftward shift of the demand curve. 
C)  movement up and to the left along the demand curve. 
D)  movement down and to the right along the demand curve. 
A)  rightward shift of the demand curve. 
B)  leftward shift of the demand curve. 
C)  movement up and to the left along the demand curve. 
D)  movement down and to the right along the demand curve.

Question 6

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

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 7

If the price per bushel of apples increased from $7.00 to $8.00 because of a poor harvest, the

Accepted Answer

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

Question 8

The price of a bag of corn chips is $3, and the price of a bottle of soda is $1. What is the relative price of a bottle of soda?

Accepted Answer

A)  3 bags of corn chips per bottle of soda 
B)  1/3 bag of corn chips per bottle of soda 
C)  $3 
D)  33¢ 
A)  3 bags of corn chips per bottle of soda 
B)  1/3 bag of corn chips per bottle of soda 
C)  $3 
D)  33¢

Question 9

If the price is above the equilibrium price, then there is a

Accepted Answer

A)  surplus, and market forces will operate to lower price. 
B)  surplus, and market forces will operate to raise price. 
C)  shortage, and market forces will operate to lower price. 
D)  shortage, and market forces will operate to raise price. 
A)  surplus, and market forces will operate to lower price. 
B)  surplus, and market forces will operate to raise price. 
C)  shortage, and market forces will operate to lower price. 
D)  shortage, and market forces will operate to raise price.

Question 10

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in income if fruit snacks are a normal good?

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 11

-The above figures show the market for gasoline. Which figure shows the effect of the end of a nine month strike by workers at all U.S. oil refineries?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D

Question 12

The "law of supply" states that, other things remaining the same, firms produce

Accepted Answer

A)  more of a good the less it costs to produce it. 
B)  less of a good the more it costs to produce it. 
C)  more of a good the higher its price. 
D)  less of a good as the required resources become scarcer. 
A)  more of a good the less it costs to produce it. 
B)  less of a good the more it costs to produce it. 
C)  more of a good the higher its price. 
D)  less of a good as the required resources become scarcer.

Question 13

Suppose people buy more of good 1 when the price of good 2 falls. These goods are

Accepted Answer

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

Question 14

-The figure above shows the market for candy. People become more concerned that eating candy causes them to gain weight, which they do not like. As a result, the

Accepted Answer

A)  demand curve shifts from D2 to D1 and the supply curve does not shift. 
B)  demand curve shifts from D1 to D2 and the supply curve shifts from S1 to S2. 
C)  demand curve shifts from D2 to D1 and the supply curve shifts from S2 to S1. 
D)  demand curve does not shift, and the supply curve shifts from S1 to S2. 
A)  demand curve shifts from D2 to D1 and the supply curve does not shift. 
B)  demand curve shifts from D1 to D2 and the supply curve shifts from S1 to S2. 
C)  demand curve shifts from D2 to D1 and the supply curve shifts from S2 to S1. 
D)  demand curve does not shift, and the supply curve shifts from S1 to S2.

Question 15

The quantity of iPods that people plan to buy this month depends on all of the following EXCEPT the

Accepted Answer

A)  price of CD players. 
B)  price of an iPod. 
C)  technology used to produce an iPod. 
D)  price of a music download from iTunes. 
A)  price of CD players. 
B)  price of an iPod. 
C)  technology used to produce an iPod. 
D)  price of a music download from iTunes.

Question 16

In 2011, the price of peanuts was rising, which lead peanut butter sellers and peanut butter buyers to expect the price of peanut butter would rise in the future. Suppose the effect on the buyers was larger than the effect on the sellers. Consequently, in the current market for peanut butter there is a ________ in the price of peanut butter and ________ in the quantity of peanut butter.

Accepted Answer

A)  rise; an increase 
B)  rise; a decrease 
C)  fall; a decrease 
D)  fall; an increase 
A)  rise; an increase 
B)  rise; a decrease 
C)  fall; a decrease 
D)  fall; an increase

Question 17

When the price of a normal good falls, the substitution effect leads to ________ in the quantity purchased and the income effect leads to ________ in the quantity purchased.

Accepted Answer

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

Question 18

The "law of demand" states that, other thing remaining the same, the higher

Accepted Answer

A)  the price of a good, the lower is the demand for this good. 
B)  consumers' incomes, the greater is the demand. 
C)  the price of a good, the higher is the quantity demanded. 
D)  the price of a good, the smaller is the quantity demanded. 
A)  the price of a good, the lower is the demand for this good. 
B)  consumers' incomes, the greater is the demand. 
C)  the price of a good, the higher is the quantity demanded. 
D)  the price of a good, the smaller is the quantity demanded.

Question 19

You can buy a season ticket to the Metropolitan Opera for $800. A season ticket plan to see the New York Knicks is $1600. Which of the following is a correct statement?

Accepted Answer

A)  The money price of opera tickets is 1/2 of a Knicks ticket per opera ticket. 
B)  The opportunity cost of a Knicks ticket is 2 opera tickets per Knicks ticket. 
C)  The relative price of an opera ticket is $800. 
D)  the money price of a Knicks ticket is 2 opera tickets per Knicks ticket. 
A)  The money price of opera tickets is 1/2 of a Knicks ticket per opera ticket. 
B)  The opportunity cost of a Knicks ticket is 2 opera tickets per Knicks ticket. 
C)  The relative price of an opera ticket is $800. 
D)  the money price of a Knicks ticket is 2 opera tickets per Knicks ticket.

Question 20

There is a technological advance in the production of a good and simultaneously also an increase in the expected future price. Which of the following will happen?

Accepted Answer

A)  The equilibrium price will rise because the supply curve shifts rightward. 
B)  The equilibrium price falls because the supply curve shifts leftward. 
C)  The technological improvement shifts the supply curve rightward while the increase in the expected future price shifts the supply curve leftward. The net effect is not known. 
D)  The demand curve shifts rightward and the supply curve does not shift. 
A)  The equilibrium price will rise because the supply curve shifts rightward. 
B)  The equilibrium price falls because the supply curve shifts leftward. 
C)  The technological improvement shifts the supply curve rightward while the increase in the expected future price shifts the supply curve leftward. The net effect is not known. 
D)  The demand curve shifts rightward and the supply curve does not shift.

Exam 3: Demand and Supply

-The above figures show the market for oranges. Which figure(s) shows the effect of a nation-wide consumer boycott of eating oranges?

A decrease in the demand for beef because of concerns over cholesterol results in

-The above figures show the market for gasoline. Which figure(s) shows the effect of a freezing cold winter which drives up the price of home heating oil (a substitute in production for gasoline because each is made from crude oil)?

The "law of demand" predicts that, other things being equal,

A decrease in quantity demanded because of an increase in price is represented by a

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

If the price per bushel of apples increased from $7.00 to $8.00 because of a poor harvest, the

The price of a bag of corn chips is $3, and the price of a bottle of soda is $1. What is the relative price of a bottle of soda?

If the price is above the equilibrium price, then there is a

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in income if fruit snacks are a normal good?

-The above figures show the market for gasoline. Which figure shows the effect of the end of a nine month strike by workers at all U.S. oil refineries?

The "law of supply" states that, other things remaining the same, firms produce

Suppose people buy more of good 1 when the price of good 2 falls. These goods are

-The figure above shows the market for candy. People become more concerned that eating candy causes them to gain weight, which they do not like. As a result, the

The quantity of iPods that people plan to buy this month depends on all of the following EXCEPT the

When the price of a normal good falls, the substitution effect leads to ________ in the quantity purchased and the income effect leads to ________ in the quantity purchased.

The "law of demand" states that, other thing remaining the same, the higher

You can buy a season ticket to the Metropolitan Opera for $800. A season ticket plan to see the New York Knicks is $1600. Which of the following is a correct statement?

There is a technological advance in the production of a good and simultaneously also an increase in the expected future price. Which of the following will happen?

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

When the price of a normal good falls, the substitution effect leads to in the quantity purchased and the income effect leads to in the quantity purchased.