Question 1

A price below the equilibrium price results in

Accepted Answer

A)  a surplus. 
B)  a shortage. 
C)  excess supply. 
D)  a further price fall. 
A)  a surplus. 
B)  a shortage. 
C)  excess supply. 
D)  a further price fall.

Question 2

During the mid-2000s, the average price of a used car fell by nearly $500 and the quantity sold nation-wide decreased by several thousands each year. This set of results is a contradiction of the law of demand.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following statements is correct?

Accepted Answer

A)  When demand increases, both the price and the quantity increase. 
B)  When demand decreases, the price rises and the quantity decreases. 
C)  When supply increases, the quantity decreases and the price rises. 
D)  When supply decreases, both the price and the quantity decrease. 
A)  When demand increases, both the price and the quantity increase. 
B)  When demand decreases, the price rises and the quantity decreases. 
C)  When supply increases, the quantity decreases and the price rises. 
D)  When supply decreases, both the price and the quantity decrease.

Question 4

-In the above figure, what is the minimum supply price for the fourth gallon of ice cream?

Accepted Answer

A)  $2.00 
B)  $3.00 
C)  $4.00 
D)  $5.00 
A)  $2.00 
B)  $3.00 
C)  $4.00 
D)  $5.00

Question 5

When the price of a good falls, the income effect for a normal good implies that people buy

Accepted Answer

A)  less of that good because the relative price of the good has fallen. 
B)  more of that good because the relative price of the good has risen. 
C)  less of that good because they cannot afford to buy all the things they previously bought. 
D)  more of that good because they can afford to buy more of all the things they previously bought. 
A)  less of that good because the relative price of the good has fallen. 
B)  more of that good because the relative price of the good has risen. 
C)  less of that good because they cannot afford to buy all the things they previously bought. 
D)  more of that good because they can afford to buy more of all the things they previously bought.

Question 6

Computers are a complement to computer software. Suppose the price of a computer falls. How does this fall in price affect the demand for computer software and the demand curve for computer software?

Accepted Answer

The fall in the price of a complement in

Question 7

Peanut butter and jelly are complements for consumers. In 2011, the price of peanut butter increased. As a result, the ________ which lead to ________ in the price of jelly and ________ in the quantity of jelly.

Accepted Answer

A)  demand for jelly; a decrease; a decrease 
B)  supply of jelly; a decrease; an increase 
C)  supply of jelly; an increase; a decrease 
D)  demand for jelly; an increase; an increase 
A)  demand for jelly; a decrease; a decrease 
B)  supply of jelly; a decrease; an increase 
C)  supply of jelly; an increase; a decrease 
D)  demand for jelly; an increase; an increase

Question 8

If a producer can use resources to produce either good A or good B, then A and B are

Accepted Answer

A)  complements in production. 
B)  substitutes in production. 
C)  substitutes in consumption. 
D)  complements in consumption. 
A)  complements in production. 
B)  substitutes in production. 
C)  substitutes in consumption. 
D)  complements in consumption.

Question 9

Which of the following raises the price of a used car and increases the equilibrium quantity sold?

Accepted Answer

A)  a new 8 percent federal excise tax placed on all new car purchases 
B)  an increase in wages for used car salespeople 
C)  a special rebate program on all new cars 
D)  None of the above answers is correct. 
A)  a new 8 percent federal excise tax placed on all new car purchases 
B)  an increase in wages for used car salespeople 
C)  a special rebate program on all new cars 
D)  None of the above answers is correct.

Question 10

The quantity demanded of a good or service is the quantity that a consumer

Accepted Answer

A)  is willing to buy at a particular price during a given time period. 
B)  actually buys at a particular price during a given time period. 
C)  needs to buy at a particular price during a given time period. 
D)  should buy at a particular price during a given time period. 
A)  is willing to buy at a particular price during a given time period. 
B)  actually buys at a particular price during a given time period. 
C)  needs to buy at a particular price during a given time period. 
D)  should buy at a particular price during a given time period.

Question 11

-In the above figure, an increase in the quantity demanded is represented by a movement from point d to

Accepted Answer

A)  point b only. 
B)  point c only. 
C)  point a. 
D)  both points b and c. 
A)  point b only. 
B)  point c only. 
C)  point a. 
D)  both points b and c.

Question 12

-The above figure shows the market for french fries at fast food joints. If the price of potatoes rises and simultaneously people become concerned that french fries can cause heart attacks, the

Accepted Answer

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

Question 13

-In the figure above, an increase in the supply of oil would result in 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 14

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 bag of corn chips?

Accepted Answer

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

Question 15

Between 2001 and 2010, equilibrium college tuition rose from $15,000 to $21,000 and equilibrium enrollment increased from 16 million to 21 million students. These changes could be the result of

Accepted Answer

A)  an increase in demand. 
B)  an increase in supply. 
C)  a decrease in demand. 
D)  a decrease in supply. 
A)  an increase in demand. 
B)  an increase in supply. 
C)  a decrease in demand. 
D)  a decrease in supply.

Question 16

-The above table gives the demand and supply schedules for cat food. If the price is $3.00 per pound of cat food, will there be a shortage, a surplus, or is this price the equilibrium price? If there is a shortage, how much is the shortage? If there is a surplus, how much is the surplus? If $3.00 is the equilibrium price, what is the equilibrium quantity?

Accepted Answer

At a price of $3.00 per pound

Question 17

-The above figure shows the market for hamburger. Which figure shows the effect of an announcement by the U.S. Food and Drug Administration (FDA) that eating hamburger causes early death?

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 18

Homer changes jobs and his new job pays him a higher income. Before he changed jobs, Homer purchased 3 pounds of tuna and 2 pounds of chicken. After he changed jobs, Homer now purchases 2 pounds of tuna and 3 pounds of chicken. For Homer,

Accepted Answer

A)  tuna is a normal good and chicken is an inferior good. 
B)  tuna is an inferior good and chicken is a normal good. 
C)  both tuna and chicken are normal goods. 
D)  both tuna and chicken are inferior goods. 
A)  tuna is a normal good and chicken is an inferior good. 
B)  tuna is an inferior good and chicken is a normal good. 
C)  both tuna and chicken are normal goods. 
D)  both tuna and chicken are inferior goods.

Question 19

-The above figures show the market for oranges. Which figure(s) shows the effect of existing orange growers increasing the size of their orange groves?

Accepted Answer

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

Question 20

A decrease in the price of bowling shifts the

Accepted Answer

A)  demand curve for bowling balls leftward. 
B)  demand curve for bowling balls rightward. 
C)  supply curve of bowling balls leftward. 
D)  supply curve of bowling balls rightward. 
A)  demand curve for bowling balls leftward. 
B)  demand curve for bowling balls rightward. 
C)  supply curve of bowling balls leftward. 
D)  supply curve of bowling balls rightward.

Exam 3: Demand and Supply

A price below the equilibrium price results in

During the mid-2000s, the average price of a used car fell by nearly $500 and the quantity sold nation-wide decreased by several thousands each year. This set of results is a contradiction of the law of demand.

Which of the following statements is correct?

-In the above figure, what is the minimum supply price for the fourth gallon of ice cream?

When the price of a good falls, the income effect for a normal good implies that people buy

Computers are a complement to computer software. Suppose the price of a computer falls. How does this fall in price affect the demand for computer software and the demand curve for computer software?

Peanut butter and jelly are complements for consumers. In 2011, the price of peanut butter increased. As a result, the ________ which lead to ________ in the price of jelly and ________ in the quantity of jelly.

If a producer can use resources to produce either good A or good B, then A and B are

Which of the following raises the price of a used car and increases the equilibrium quantity sold?

The quantity demanded of a good or service is the quantity that a consumer

-In the above figure, an increase in the quantity demanded is represented by a movement from point d to

-The above figure shows the market for french fries at fast food joints. If the price of potatoes rises and simultaneously people become concerned that french fries can cause heart attacks, the

-In the figure above, an increase in the supply of oil would result in a movement from

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 bag of corn chips?

Between 2001 and 2010, equilibrium college tuition rose from $15,000 to $21,000 and equilibrium enrollment increased from 16 million to 21 million students. These changes could be the result of

-The above figure shows the market for hamburger. Which figure shows the effect of an announcement by the U.S. Food and Drug Administration (FDA) that eating hamburger causes early death?

Homer changes jobs and his new job pays him a higher income. Before he changed jobs, Homer purchased 3 pounds of tuna and 2 pounds of chicken. After he changed jobs, Homer now purchases 2 pounds of tuna and 3 pounds of chicken. For Homer,

-The above figures show the market for oranges. Which figure(s) shows the effect of existing orange growers increasing the size of their orange groves?

A decrease in the price of bowling shifts 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

Peanut butter and jelly are complements for consumers. In 2011, the price of peanut butter increased. As a result, the which lead to in the price of jelly and in the quantity of jelly.