Question 1

If income decreases or the price of a complement rises,

Accepted Answer

A)  the demand curve for a normal good shifts leftward. 
B)  the demand curve for a normal good shifts rightward. 
C)  there is an upward movement along the demand curve for the good. 
D)  there is a downward movement along the demand curve for the good. 
A)  the demand curve for a normal good shifts leftward. 
B)  the demand curve for a normal good shifts rightward. 
C)  there is an upward movement along the demand curve for the good. 
D)  there is a downward movement along the demand curve for the good.

Question 2

When the demand for a good decreases, its equilibrium price ________ and equilibrium quantity ________.

Accepted Answer

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

Question 3

Which of the following would NOT shift the demand curve for turkey?

Accepted Answer

A)  an increase in income 
B)  a decrease in the price of ham 
C)  a change in people's preferences for turkey 
D)  a change in the price of a turkey 
A)  an increase in income 
B)  a decrease in the price of ham 
C)  a change in people's preferences for turkey 
D)  a change in the price of a turkey

Question 4

There are 72,922 seats in Lambeau Field where the Green Bay Packers play football. The Packers have sold out their season tickets since 1960. There are about 80,000 people on the waiting list to buy season tickets in 2010. This means that at the price in 2010, the

Accepted Answer

A)  quantity demanded of Packer season tickets is 72,922. 
B)  quantity demanded of Packer season tickets is about 80,000. 
C)  quantity demanded of Packer season tickets is about 153,000. 
D)  demand for Packer season tickets is 72,922. 
A)  quantity demanded of Packer season tickets is 72,922. 
B)  quantity demanded of Packer season tickets is about 80,000. 
C)  quantity demanded of Packer season tickets is about 153,000. 
D)  demand for Packer season tickets is 72,922.

Question 5

Which of the following influences does NOT shift the supply curve?

Accepted Answer

A)  a rise in the wages paid workers who produce the good 
B)  the development of new technology 
C)  people deciding that they want to buy more of the product 
D)  a decrease in the number of suppliers 
A)  a rise in the wages paid workers who produce the good 
B)  the development of new technology 
C)  people deciding that they want to buy more of the product 
D)  a decrease in the number of suppliers

Question 6

Each point on the demand curve reflects

Accepted Answer

A)  all the wants of a given household. 
B)  the highest price consumers are willing and able to pay for that particular unit of a good. 
C)  the highest price sellers will accept for all units they are producing. 
D)  the lowest-cost technology available to produce a good. 
A)  all the wants of a given household. 
B)  the highest price consumers are willing and able to pay for that particular unit of a good. 
C)  the highest price sellers will accept for all units they are producing. 
D)  the lowest-cost technology available to produce a good.

Question 7

Wages for workers producing iPods and similar products will rise next year. Walkman Watch asks you to predict the effect of this change in next year's market for iPods. You predict that the major effect will be that the

Accepted Answer

A)  demand curve for an iPod will shift rightward. 
B)  demand curve for an iPod will shift leftward. 
C)  supply curve for an iPod will shift leftward. 
D)  supply curve for an iPod will shift rightward. 
A)  demand curve for an iPod will shift rightward. 
B)  demand curve for an iPod will shift leftward. 
C)  supply curve for an iPod will shift leftward. 
D)  supply curve for an iPod will shift rightward.

Question 8

The price of a DVD rental is $1.50 and the price of a downloaded movie is $1.00. If the price of a DVD rental increases by $0.50, the relative price a downloaded movie

Accepted Answer

A)  rises. 
B)  falls. 
C)  does not change. 
D)  might change, but more information is needed. 
A)  rises. 
B)  falls. 
C)  does not change. 
D)  might change, but more information is needed.

Question 9

-Consumers can use either natural gas or heating oil to warm their houses. Suppose the price of natural gas increases. Use a demand and supply diagram to show the impact of the higher price of natural gas on the market for home heating oil.

Accepted Answer

@#IMG-DLM& Natural gas and home heating oil are su

Question 10

Some sales managers are talking shop. Which of the following quotations refers to a movement along the demand curve?

Accepted Answer

A)  "Since our competitors raised their prices our sales have doubled." 
B)  "It has been an unusually mild winter; our sales of wool scarves are down from last year." 
C)  "We decided to cut our prices, and the increase in our sales has been remarkable." 
D)  none of the above 
A)  "Since our competitors raised their prices our sales have doubled." 
B)  "It has been an unusually mild winter; our sales of wool scarves are down from last year." 
C)  "We decided to cut our prices, and the increase in our sales has been remarkable." 
D)  none of the above

Question 11

A surplus occurs when the price is

Accepted Answer

A)  less than the equilibrium price. 
B)  equal to the equilibrium price. 
C)  greater than the equilibrium price. 
D)  None of the above because the existence of a surplus is independent of the price of the good. 
A)  less than the equilibrium price. 
B)  equal to the equilibrium price. 
C)  greater than the equilibrium price. 
D)  None of the above because the existence of a surplus is independent of the price of the good.

Question 12

Explain how price can be a regulator, that is, how it can coordinate the plans of buyers and sellers.

Accepted Answer

If the price is too high, the quantity s

Question 13

A severe drought has damaged this year's lettuce crop. The initial effect on the lettuce market is a

Accepted Answer

A)  decrease in the demand for lettuce. 
B)  decrease in the supply of lettuce. 
C)  decrease in both the demand and supply of lettuce. 
D)  rightward movement along the demand curve for lettuce. 
A)  decrease in the demand for lettuce. 
B)  decrease in the supply of lettuce. 
C)  decrease in both the demand and supply of lettuce. 
D)  rightward movement along the demand curve for lettuce.

Question 14

Consumers' income declines and, as a result, the demand for margarine increases. Is margarine a normal or an inferior good? Explain.

Accepted Answer

Margarine is an inferior good.

Question 15

If both demand and supply increase, what will be the effect on the equilibrium price and quantity?

Accepted Answer

A)  Both the price and the quantity will increase. 
B)  The quantity will increase but the price could either rise, fall, or remain the same. 
C)  The price will fall but the quantity will increase. 
D)  The price will rise but the quantity could either increase, decrease, or remain the same. 
A)  Both the price and the quantity will increase. 
B)  The quantity will increase but the price could either rise, fall, or remain the same. 
C)  The price will fall but the quantity will increase. 
D)  The price will rise but the quantity could either increase, decrease, or remain the same.

Question 16

-The figure above shows the market for airline tickets. In early 2008 the price of jet fuel rose. This change is shown in the figure as 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 17

-Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. What of the following could result in a movement to point b?

Accepted Answer

A)  an increase in the price of bottled water 
B)  a decrease in the price of bottled water 
C)  an increase in the opportunity cost of soft drinks 
D)  a decrease in the relative price of a soft drink 
A)  an increase in the price of bottled water 
B)  a decrease in the price of bottled water 
C)  an increase in the opportunity cost of soft drinks 
D)  a decrease in the relative price of a soft drink

Question 18

-The above figure shows the market for pizza. Which figure shows the effect of an increase in the price of sandwiches, which for consumers are substitutes for pizza?

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 19

A consumer might consider in-line skates and elbow pads to be

Accepted Answer

A)  products with upward sloping demand curves. 
B)  unrelated goods. 
C)  complements. 
D)  substitutes. 
A)  products with upward sloping demand curves. 
B)  unrelated goods. 
C)  complements. 
D)  substitutes.

Question 20

If there exists a shortage in the market for snowmobiles, then the price of a snowmobile will

Accepted Answer

A)  rise. 
B)  fall. 
C)  neither rise nor fall. 
D)  at first fall then rise. 
A)  rise. 
B)  fall. 
C)  neither rise nor fall. 
D)  at first fall then rise.

Exam 3: Demand and Supply

If income decreases or the price of a complement rises,

When the demand for a good decreases, its equilibrium price ________ and equilibrium quantity ________.

Which of the following would NOT shift the demand curve for turkey?

There are 72,922 seats in Lambeau Field where the Green Bay Packers play football. The Packers have sold out their season tickets since 1960. There are about 80,000 people on the waiting list to buy season tickets in 2010. This means that at the price in 2010, the

Which of the following influences does NOT shift the supply curve?

Each point on the demand curve reflects

Wages for workers producing iPods and similar products will rise next year. Walkman Watch asks you to predict the effect of this change in next year's market for iPods. You predict that the major effect will be that the

The price of a DVD rental is $1.50 and the price of a downloaded movie is $1.00. If the price of a DVD rental increases by $0.50, the relative price a downloaded movie

-Consumers can use either natural gas or heating oil to warm their houses. Suppose the price of natural gas increases. Use a demand and supply diagram to show the impact of the higher price of natural gas on the market for home heating oil.

Some sales managers are talking shop. Which of the following quotations refers to a movement along the demand curve?

A surplus occurs when the price is

Explain how price can be a regulator, that is, how it can coordinate the plans of buyers and sellers.

A severe drought has damaged this year's lettuce crop. The initial effect on the lettuce market is a

Consumers' income declines and, as a result, the demand for margarine increases. Is margarine a normal or an inferior good? Explain.

If both demand and supply increase, what will be the effect on the equilibrium price and quantity?

-The figure above shows the market for airline tickets. In early 2008 the price of jet fuel rose. This change is shown in the figure as a shift from

-Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. What of the following could result in a movement to point b?

-The above figure shows the market for pizza. Which figure shows the effect of an increase in the price of sandwiches, which for consumers are substitutes for pizza?

A consumer might consider in-line skates and elbow pads to be

If there exists a shortage in the market for snowmobiles, then the price of a snowmobile will

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 demand for a good decreases, its equilibrium price and equilibrium quantity .