Question 1

If the demand curve for bottled water shifts rightward and the supply curve of bottled water shifts leftward, the equilibrium

Accepted Answer

A)  quantity of bottled water definitely decreases. 
B)  quantity of bottled water definitely increases. 
C)  price of bottled water definitely increases. 
D)  price of bottled water definitely decreases. 
A)  quantity of bottled water definitely decreases. 
B)  quantity of bottled water definitely increases. 
C)  price of bottled water definitely increases. 
D)  price of bottled water definitely decreases.

Question 2

Inferior goods are those for which demand increases as

Accepted Answer

A)  the price of a substitute falls. 
B)  income increases. 
C)  the price of a substitute rises. 
D)  income decreases. 
A)  the price of a substitute falls. 
B)  income increases. 
C)  the price of a substitute rises. 
D)  income decreases.

Question 3

Consider the market for broccoli. If the price of a pound of broccoli increases, what happens to the supply of broccoli?

Accepted Answer

A)  The supply of broccoli decreases. 
B)  There will be no change in the supply of broccoli, but instead there is a decrease in the quantity supplied of broccoli. 
C)  There will be no change in the supply of broccoli, but instead there is an increase in the quantity supplied of broccoli. 
D)  The supply of broccoli increases. 
A)  The supply of broccoli decreases. 
B)  There will be no change in the supply of broccoli, but instead there is a decrease in the quantity supplied of broccoli. 
C)  There will be no change in the supply of broccoli, but instead there is an increase in the quantity supplied of broccoli. 
D)  The supply of broccoli increases.

Question 4

If the demand for digital cameras increases when consumersʹ income rise, then digital cameras are

Accepted Answer

A)  an inferior good. 
B)  a normal good. 
C)  a substitute good for video cameras. 
D)  a complement to video cameras. 
A)  an inferior good. 
B)  a normal good. 
C)  a substitute good for video cameras. 
D)  a complement to video cameras.

Question 5

-Consider the demand curves for soft drinks shown in the figure above. A movement from point a
To point b represents

Accepted Answer

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

Question 6

A decrease in the price of bowling shifts the

Accepted Answer

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

Question 7

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in the price of a substitute for fruit snacks?

Accepted Answer

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

Question 8

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

Question 9

In the market for magazines, the ʺincome effectʺ means that

Accepted Answer

A)  magazines are usually purchased by people with higher than average incomes. 
B)  a decrease in the price of a substitute product like books will make magazine readers feel a little poorer than they were before. 
C)  an increase in the price of magazines will raise the relative price of magazines to books, causing magazine readers to read more books and fewer magazines. 
D)  an increase in the price of magazines will reduce the total purchasing power of magazine readers, making them able to afford fewer magazines. 
A)  magazines are usually purchased by people with higher than average incomes. 
B)  a decrease in the price of a substitute product like books will make magazine readers feel a little poorer than they were before. 
C)  an increase in the price of magazines will raise the relative price of magazines to books, causing magazine readers to read more books and fewer magazines. 
D)  an increase in the price of magazines will reduce the total purchasing power of magazine readers, making them able to afford fewer magazines.

Question 10

-The above figures show the market for hamburger meat. Which figures) shows the effect of a decrease in the price of a hamburger complement such as hamburger buns?

Accepted Answer

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

Question 11

Between 2000 and 2010, advances in PC production technology increased the supply of PCs sharply. The demand for PCs also increased, but not nearly as much as the supply did. As a result, the price of a PC__________ and the quantity of PCs sold__________ .

Accepted Answer

A)  fell; increased 
B)  rose; increased 
C)  rose; decreased 
D)  fell; decreased 
A)  fell; increased 
B)  rose; increased 
C)  rose; decreased 
D)  fell; decreased

Question 12

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

Question 13

-In the figure, the equilibrium price is initially $3 per bushel of wheat. If suppliers come to expect that the price of a bushel of wheat will rise in the future, but buyers do not, the current equilibrium price will

Accepted Answer

A)  rise. 
B)  fall. 
C)  not change. 
D)  Perhaps rise, fall, or stay the same, depending on whether there are more demanders or suppliers in the market. 
A)  rise. 
B)  fall. 
C)  not change. 
D)  Perhaps rise, fall, or stay the same, depending on whether there are more demanders or suppliers in the market.

Question 14

A relative price is the product of two money prices.

Accepted Answer

A) True 
 B)False

Question 15

Scarcity guarantees that

Accepted Answer

A)  demands will be equal to wants. 
B)  wants will exceed demands. 
C)  demands will exceed wants. 
D)  most demands will be satisfied. 
A)  demands will be equal to wants. 
B)  wants will exceed demands. 
C)  demands will exceed wants. 
D)  most demands will be satisfied.

Question 16

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

Accepted Answer

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

Question 17

-In the above figure, in order for the equilibrium price to remain constant while the equilibrium quantity increases, the

Accepted Answer

A)  supply and demand curves both would have to shift leftward. 
B)  supply curve would have to shift rightward and the demand curve would have to shift leftward. 
C)  supply curve would have to shift leftward and the demand curve would have to shift rightward. 
D)  supply and demand curves both would have to shift rightward. 
A)  supply and demand curves both would have to shift leftward. 
B)  supply curve would have to shift rightward and the demand curve would have to shift leftward. 
C)  supply curve would have to shift leftward and the demand curve would have to shift rightward. 
D)  supply and demand curves both would have to shift rightward.

Question 18

$$\begin{array} { | l | l | l | } 
\hline \begin{array} { l } 
\text { Price } \
\text { (dollars per } \
\text { pizza) }
\end{array} & \begin{array} { l } 
\text { Quantity } \
\text { demanded } \
\text { (pizzas per } \
\text { week) }
\end{array} & \begin{array} { l } 
\text { Quantity } \
\text { supplied } \
\text { (pizzas per } \
\text { week) }
\end{array} \
\hline 5 & 750 & 300 \
\hline 6 & 700 & 400 \
\hline 7 & 650 & 500 \
\hline 8 & 600 & 600 \
\hline 9 & 550 & 700 \
\hline 10 & 500 & 800 \
\hline 11 & 450 & 900 \
\hline 12 & 400 & 1,000 \
\hline
\end{array}$$
-A market research team has come up with the demand and supply schedules for pizza in Cheeseboro. These schedules are given in the table above. Use these data to analyze the situation in the market for pizza.
a) Draw a figure showing the demand curve for pizza and the supply curve of pizza. What are the equilibrium price and quantity?
b) Suppose the price is $10. Describe the situation in the market and explain how the price of pizza adjusts. Now suppose the price is $6. Describe the situation in the market and explain how the price of pizza adjusts.
c) The market research report also includes a prediction about the effect on the market for pizza in Cheeseboro of a recent news published in Cheeseboro Herald. The Herald reported that pizza has been discovered to help prevent heart diseases. Unfortunately, your dog chewed up the report and all you can read about the prediction is ʺquantity... by 150 at each price.ʺ What does the prediction say? Use your graph to show the predicted effects on the market for pizza. What are the predicted equilibrium price and quantity? How will the market adjust?

Accepted Answer

See the figure above. The equilibrium pr

Question 19

An economist says: ʺThe supply curve has two interpretations.ʺ What does the economist mean?

Accepted Answer

The first interpretation is that the sup

Question 20

The ʺlaw of supplyʺ refers to the fact that, all other things remaining the same, when the price of a good rises

Accepted Answer

A)  there is a movement down along the supply curve to a smaller quantity supplied. 
B)  there is a movement up along the supply curve to a larger quantity supplied. 
C)  the supply curve shifts leftward. 
D)  the supply curve shifts rightward. 
A)  there is a movement down along the supply curve to a smaller quantity supplied. 
B)  there is a movement up along the supply curve to a larger quantity supplied. 
C)  the supply curve shifts leftward. 
D)  the supply curve shifts rightward.

If the demand curve for bottled water shifts rightward and the supply curve of bottled water shifts leftward, the equilibrium

Inferior goods are those for which demand increases as

Consider the market for broccoli. If the price of a pound of broccoli increases, what happens to the supply of broccoli?

If the demand for digital cameras increases when consumersʹ income rise, then digital cameras are

-Consider the demand curves for soft drinks shown in the figure above. A movement from point a To point b represents

A decrease in the price of bowling shifts the

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in the price of a substitute for fruit snacks?

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.

In the market for magazines, the ʺincome effectʺ means that

-The above figures show the market for hamburger meat. Which figures) shows the effect of a decrease in the price of a hamburger complement such as hamburger buns?

Between 2000 and 2010, advances in PC production technology increased the supply of PCs sharply. The demand for PCs also increased, but not nearly as much as the supply did. As a result, the price of a PC and the quantity of PCs sold .

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

-In the figure, the equilibrium price is initially $3 per bushel of wheat. If suppliers come to expect that the price of a bushel of wheat will rise in the future, but buyers do not, the current equilibrium price will

A relative price is the product of two money prices.

Scarcity guarantees that

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

-In the above figure, in order for the equilibrium price to remain constant while the equilibrium quantity increases, the

An economist says: ʺThe supply curve has two interpretations.ʺ What does the economist mean?

The ʺlaw of supplyʺ refers to the fact that, all other things remaining the same, when the price of a good rises

What Is Economics

The Economic Problem

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

Exam 3: Demand and Supply

If the demand curve for bottled water shifts rightward and the supply curve of bottled water shifts leftward, the equilibrium

Inferior goods are those for which demand increases as

Consider the market for broccoli. If the price of a pound of broccoli increases, what happens to the supply of broccoli?

If the demand for digital cameras increases when consumersʹ income rise, then digital cameras are

-Consider the demand curves for soft drinks shown in the figure above. A movement from point a To point b represents

A decrease in the price of bowling shifts the

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in the price of a substitute for fruit snacks?

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.

In the market for magazines, the ʺincome effectʺ means that

-The above figures show the market for hamburger meat. Which figures) shows the effect of a decrease in the price of a hamburger complement such as hamburger buns?

Between 2000 and 2010, advances in PC production technology increased the supply of PCs sharply. The demand for PCs also increased, but not nearly as much as the supply did. As a result, the price of a PC__________ and the quantity of PCs sold__________ .

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

-In the figure, the equilibrium price is initially $3 per bushel of wheat. If suppliers come to expect that the price of a bushel of wheat will rise in the future, but buyers do not, the current equilibrium price will

A relative price is the product of two money prices.

Scarcity guarantees that

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

-In the above figure, in order for the equilibrium price to remain constant while the equilibrium quantity increases, the

An economist says: ʺThe supply curve has two interpretations.ʺ What does the economist mean?

The ʺlaw of supplyʺ refers to the fact that, all other things remaining the same, when the price of a good rises

What Is Economics

The Economic Problem

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

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.

Between 2000 and 2010, advances in PC production technology increased the supply of PCs sharply. The demand for PCs also increased, but not nearly as much as the supply did. As a result, the price of a PC and the quantity of PCs sold .