Question 1

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

Accepted Answer

A)  a consumer would like to buy but might not be able to afford. 
B)  is actually bought during a given time period at a given price. 
C)  consumers plan to buy during a given time period at a given price. 
D)  firms are willing to sell during a given time period at a given price. 
A)  a consumer would like to buy but might not be able to afford. 
B)  is actually bought during a given time period at a given price. 
C)  consumers plan to buy during a given time period at a given price. 
D)  firms are willing to sell during a given time period at a given price.

Question 2

There is a technological advance in the production of ice cream. As a result, the supply curve of ice cream shifts ________ and ________.

Accepted Answer

A)  leftward; both the equilibrium price and equilibrium quantity fall 
B)  rightward; both the equilibrium price and equilibrium quantity fall 
C)  rightward; the equilibrium price falls while the equilibrium quantity increases 
D)  rightward; both the equilibrium price and equilibrium quantity rise 
A)  leftward; both the equilibrium price and equilibrium quantity fall 
B)  rightward; both the equilibrium price and equilibrium quantity fall 
C)  rightward; the equilibrium price falls while the equilibrium quantity increases 
D)  rightward; both the equilibrium price and equilibrium quantity rise

Question 3

A decrease in the quantity supplied is represented by a

Accepted Answer

A)  movement down the supply curve. 
B)  movement up the supply curve. 
C)  rightward shift in the supply curve. 
D)  leftward shift in the supply curve. 
A)  movement down the supply curve. 
B)  movement up the supply curve. 
C)  rightward shift in the supply curve. 
D)  leftward shift in the supply curve.

Question 4

The demand for a good increases when the price of a substitute ________ and also increases when the price of a complement ________.

Accepted Answer

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

Question 5

A supply curve is also a maximum-supply-price curve.

Accepted Answer

A) True 
 B)False

Question 6

When the price of an inferior 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 7

For normal goods which of the following explains why demand curves slope downward?

Accepted Answer

A)  prices and income 
B)  substitutes and complements 
C)  resources and technology 
D)  substitution effect and income effect 
A)  prices and income 
B)  substitutes and complements 
C)  resources and technology 
D)  substitution effect and income effect

Question 8

Doctors find that one aspirin per day reduces the risk of heart attacks. Demand for aspirin will

Accepted Answer

A)  increase, so that equilibrium price and equilibrium quantity will increase. 
B)  decrease, so that equilibrium price and equilibrium quantity will increase. 
C)  increase, so that equilibrium price will decrease and equilibrium quantity will increase. 
D)  increase, but the new equilibrium price and quantity are indeterminate. 
A)  increase, so that equilibrium price and equilibrium quantity will increase. 
B)  decrease, so that equilibrium price and equilibrium quantity will increase. 
C)  increase, so that equilibrium price will decrease and equilibrium quantity will increase. 
D)  increase, but the new equilibrium price and quantity are indeterminate.

Question 9

What is the difference between quantity supplied and supply?

Accepted Answer

Quantity supplied is the amount that peo

Question 10

If the price of chocolate chip cookies falls, then

Accepted Answer

A)  the supply curve of chocolate chip cookies shifts rightward. 
B)  the supply curve of chocolate chip cookies shifts leftward. 
C)  there is a movement downward along the supply curve of chocolate chip cookies. 
D)  there is a movement upward along the supply curve of chocolate chip cookies. 
A)  the supply curve of chocolate chip cookies shifts rightward. 
B)  the supply curve of chocolate chip cookies shifts leftward. 
C)  there is a movement downward along the supply curve of chocolate chip cookies. 
D)  there is a movement upward along the supply curve of chocolate chip cookies.

Question 11

An increase in technology will shift the good's supply curve rightward.

Accepted Answer

A) True 
 B)False

Question 12

If the price of a candy bar is $1 and the price of a fast food meal is $5, then the

Accepted Answer

A)  relative price of a candy bar is 5 fast food meals per candy bar. 
B)  money price of a candy bar is 1/5 of a fast food meal per candy bar. 
C)  relative price of a fast food meal is 5 candy bars per fast food meal. 
D)  money price of a fast food meal is 1/5 of a candy bar per fast food meal. 
A)  relative price of a candy bar is 5 fast food meals per candy bar. 
B)  money price of a candy bar is 1/5 of a fast food meal per candy bar. 
C)  relative price of a fast food meal is 5 candy bars per fast food meal. 
D)  money price of a fast food meal is 1/5 of a candy bar per fast food meal.

Question 13

Which of the following shifts the supply curve for oranges?

Accepted Answer

A)  disastrous weather that destroys about half of this year's orange crop 
B)  a newly discovered increase in the nutritional value of oranges 
C)  an increase in the price of bananas, a substitute in consumption for oranges 
D)  an increase in income for all orange consumers 
A)  disastrous weather that destroys about half of this year's orange crop 
B)  a newly discovered increase in the nutritional value of oranges 
C)  an increase in the price of bananas, a substitute in consumption for oranges 
D)  an increase in income for all orange consumers

Question 14

If the U.S. Surgeon General announced that increased grapefruit juice consumption could help prevent heart attacks, what would happen to the equilibrium price and quantity of grapefruit juice?

Accepted Answer

A)  Price and quantity both increase. 
B)  Price and quantity both decrease. 
C)  Price increases but quantity decreases. 
D)  Price decreases but quantity increases. 
A)  Price and quantity both increase. 
B)  Price and quantity both decrease. 
C)  Price increases but quantity decreases. 
D)  Price decreases but quantity increases.

Question 15

An inferior good is a good for which demand

Accepted Answer

A)  decreases when income increases. 
B)  increases when income increases. 
C)  decreases when population increases. 
D)  increases when population increases. 
A)  decreases when income increases. 
B)  increases when income increases. 
C)  decreases when population increases. 
D)  increases when population increases.

Question 16

The opportunity cost of good A in terms of good B is equal to the

Accepted Answer

A)  money price of good A minus the money price of good B. 
B)  money price of good B minus the money price of good A. 
C)  ratio of the money price of good A to the money price of good B. 
D)  ratio of the money price of good B to the money price of good A. 
A)  money price of good A minus the money price of good B. 
B)  money price of good B minus the money price of good A. 
C)  ratio of the money price of good A to the money price of good B. 
D)  ratio of the money price of good B to the money price of good A.

Question 17

Apples are a normal good, so if the price of an apple increases from 50¢ to 60¢, the quantity of apples demanded decrease because of

Accepted Answer

A)  the substitution effect only. 
B)  the income effect only. 
C)  a change in income. 
D)  the substitution and income effects. 
A)  the substitution effect only. 
B)  the income effect only. 
C)  a change in income. 
D)  the substitution and income effects.

Question 18

A change in which of the following shifts the demand curve?

Accepted Answer

A)  the number of sellers in the market 
B)  the price of the resources used to produce the product 
C)  the technology with which the product is produced 
D)  the tastes and preferences of consumers 
A)  the number of sellers in the market 
B)  the price of the resources used to produce the product 
C)  the technology with which the product is produced 
D)  the tastes and preferences of consumers

Question 19

If the supply of bottled water decreases and at the same time the demand for bottled water increases, the equilibrium price ________ and the equilibrium quantity ________.

Accepted Answer

A)  might rise, fall, or stay the same; decreases 
B)  might rise, fall, or stay the same; increases 
C)  falls; increases 
D)  rises; might increase, decrease, or stay the same 
A)  might rise, fall, or stay the same; decreases 
B)  might rise, fall, or stay the same; increases 
C)  falls; increases 
D)  rises; might increase, decrease, or stay the same

Question 20

The price of a tomato increases and people buy more lettuce. You infer that lettuce and tomatoes are ________.

Accepted Answer

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

Exam 3: Demand and Supply

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

There is a technological advance in the production of ice cream. As a result, the supply curve of ice cream shifts ________ and ________.

A decrease in the quantity supplied is represented by a

The demand for a good increases when the price of a substitute ________ and also increases when the price of a complement ________.

A supply curve is also a maximum-supply-price curve.

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

For normal goods which of the following explains why demand curves slope downward?

Doctors find that one aspirin per day reduces the risk of heart attacks. Demand for aspirin will

What is the difference between quantity supplied and supply?

If the price of chocolate chip cookies falls, then

An increase in technology will shift the good's supply curve rightward.

If the price of a candy bar is $1 and the price of a fast food meal is $5, then the

Which of the following shifts the supply curve for oranges?

If the U.S. Surgeon General announced that increased grapefruit juice consumption could help prevent heart attacks, what would happen to the equilibrium price and quantity of grapefruit juice?

An inferior good is a good for which demand

The opportunity cost of good A in terms of good B is equal to the

Apples are a normal good, so if the price of an apple increases from 50¢ to 60¢, the quantity of apples demanded decrease because of

A change in which of the following shifts the demand curve?

If the supply of bottled water decreases and at the same time the demand for bottled water increases, the equilibrium price ________ and the equilibrium quantity ________.

The price of a tomato increases and people buy more lettuce. You infer that lettuce and tomatoes are ________.

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

There is a technological advance in the production of ice cream. As a result, the supply curve of ice cream shifts and .

The demand for a good increases when the price of a substitute and also increases when the price of a complement .

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

If the supply of bottled water decreases and at the same time the demand for bottled water increases, the equilibrium price and the equilibrium quantity .