Question 1

Some sales managers are talking shop.Which one of the following quotations refers to a leftward shift of the demand curve?

Accepted Answer

A) "It has been an unusually mild winter; our sales of wool scarves are down from last year." 
B) "Since our competitors raised their prices, our sales have doubled." 
C) "We decided to cut our prices, and the increase in our sales has been remarkable." 
D) "More firms are producing biodegradable products." 
E) "The Green movement has sparked an increase in our sales of biodegradable products." 
A) "It has been an unusually mild winter; our sales of wool scarves are down from last year." 
B) "Since our competitors raised their prices, our sales have doubled." 
C) "We decided to cut our prices, and the increase in our sales has been remarkable." 
D) "More firms are producing biodegradable products." 
E) "The Green movement has sparked an increase in our sales of biodegradable products." A

Question 2

Which of the following will definitely result in an increase in the equilibrium price?

Accepted Answer

A) a decrease in both demand and supply 
B) a decrease in demand combined with an increase in supply 
C) an increase in both demand and supply 
D) an increase in supply combined with a decrease in demand 
E) an increase in demand combined with a decrease in supply 
A) a decrease in both demand and supply 
B) a decrease in demand combined with an increase in supply 
C) an increase in both demand and supply 
D) an increase in supply combined with a decrease in demand 
E) an increase in demand combined with a decrease in supply E

Question 3

People buy more of good 1 when the price of good 2 rises.Good 1 and good 2 are

Accepted Answer

A) substitutes in production 
B) inferior goods. 
C) normal goods. 
D) substitutes. 
E) complements. 
A) substitutes in production 
B) inferior goods. 
C) normal goods. 
D) substitutes. 
E) complements. D

Question 4

Complete the following sentence.A surplus

Accepted Answer

A) is the amount by which the quantity supplied exceeds the equilibrium quantity. 
B) will lead to rising prices. 
C) is the amount by which the quantity demanded exceeds the equilibrium quantity. 
D) is the amount by which the quantity demanded exceeds the quantity supplied. 
E) exists if the price is above the equilibrium price. 
A) is the amount by which the quantity supplied exceeds the equilibrium quantity. 
B) will lead to rising prices. 
C) is the amount by which the quantity demanded exceeds the equilibrium quantity. 
D) is the amount by which the quantity demanded exceeds the quantity supplied. 
E) exists if the price is above the equilibrium price.

Question 5

Use the figure below to answer the following questions.
   Figure 3.5.2
Original equilibrium at 1.
-Refer to Figure 3.5.2, which represents the market for tacos.A new scientific study reveals that tacos cause bad breath.Simultaneously, the cost of producing tacos decreases.What is the new equilibrium, ceteris paribus?

Accepted Answer

A) 2 
B) 3 
C) 9 
D) 4 
E) 7 
A) 2 
B) 3 
C) 9 
D) 4 
E) 7

Question 6

A shortage is the amount by which quantity

Accepted Answer

A) demanded increases when the price rises. 
B) supplied exceeds quantity demanded. 
C) demanded exceeds quantity supplied. 
D) supplied exceeds the equilibrium quantity. 
E) demanded exceeds the equilibrium quantity. 
A) demanded increases when the price rises. 
B) supplied exceeds quantity demanded. 
C) demanded exceeds quantity supplied. 
D) supplied exceeds the equilibrium quantity. 
E) demanded exceeds the equilibrium quantity.

Question 7

Use the figure below to answer the following questions.
   Figure 3.2.1
-Given Figure 3.2.1, under what condition are consumers willing to buy more than 9,000 apples per week?

Accepted Answer

A) if the price is below $0.50 
B) if the price is between $1 and $1.50 
C) if the price is $0.75 
D) if the price is between $1 and $0.50 
E) if the price is above $1 
A) if the price is below $0.50 
B) if the price is between $1 and $1.50 
C) if the price is $0.75 
D) if the price is between $1 and $0.50 
E) if the price is above $1

Question 8

The y- axis intercept of the supply curve is 40 and the slope is 6.The equation of the supply curve is

Accepted Answer

A) P = 40 + 6QS. 
B) QS = 40 - 6P. 
C) P = 40 - 6QS. 
D) QS = 40 + 6P. 
E) P = 3 + 40QS. 
A) P = 40 + 6QS. 
B) QS = 40 - 6P. 
C) P = 40 - 6QS. 
D) QS = 40 + 6P. 
E) P = 3 + 40QS.

Question 9

All grapefruit juice producers have decided to blend tangerine juice with grapefruit juice.This blend results in a higher cost of production, but studies show that consumers prefer the taste of the blend to straight grapefruit juice.What will happen to the equilibrium price and quantity of grapefruit juice?

Accepted Answer

A) The equilibrium quantity increases but the effect on the equilibrium price is uncertain. 
B) The equilibrium price falls and the equilibrium quantity increases. 
C) The equilibrium price rises but the effect on the equilibrium quantity is uncertain. 
D) The equilibrium price rises and the equilibrium quantity increases. 
E) The equilibrium price rises and the equilibrium quantity remains unchanged. 
A) The equilibrium quantity increases but the effect on the equilibrium price is uncertain. 
B) The equilibrium price falls and the equilibrium quantity increases. 
C) The equilibrium price rises but the effect on the equilibrium quantity is uncertain. 
D) The equilibrium price rises and the equilibrium quantity increases. 
E) The equilibrium price rises and the equilibrium quantity remains unchanged.

Question 10

Networks increase the price they charge cable television firms for programming.As a result, the price of cable television rises.Choose the correct statement.

Accepted Answer

A) The demand curve for cable television shifts leftward. 
B) A movement occurs up along the demand curve for cable television and the quantity demanded increases. 
C) The price of cable television does not change because subscribers are already paying a high enough price. 
D) A movement occurs up along the demand curve for cable television and the quantity demanded decreases. 
E) The demand curve for cable television shifts rightward. 
A) The demand curve for cable television shifts leftward. 
B) A movement occurs up along the demand curve for cable television and the quantity demanded increases. 
C) The price of cable television does not change because subscribers are already paying a high enough price. 
D) A movement occurs up along the demand curve for cable television and the quantity demanded decreases. 
E) The demand curve for cable television shifts rightward.

Question 11

If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 8,000 per year, there is a _______ in the market and the price will _______ .

Accepted Answer

A) shortage; fall 
B) surplus; fall 
C) shortage; rise 
D) surplus; rise 
E) surplus; either rise or fall depending on whether supply increases to meet the surplus 
A) shortage; fall 
B) surplus; fall 
C) shortage; rise 
D) surplus; rise 
E) surplus; either rise or fall depending on whether supply increases to meet the surplus

Question 12

Use the table below to answer the following questions.
Price dollars per unit)
Table 3.4.1
Quantity Demanded
   Quantity Supplied units)
-In Table 3.4.1, the equilibrium quantity is

Accepted Answer

A) 420 units. 
B) 1,100 units. 
C) 500 units. 
D) 200 units. 
E) 320 units. 
A) 420 units. 
B) 1,100 units. 
C) 500 units. 
D) 200 units. 
E) 320 units.

Question 13

If we observe a rise in the equilibrium price of good A, we know that the demand for A has

Accepted Answer

A) increased or the supply of A has increased or both. 
B) decreased or the supply of A has increased or both. 
C) decreased or the supply of A has decreased or both. 
D) increased or the supply of A has decreased or both. 
E) not changed. 
A) increased or the supply of A has increased or both. 
B) decreased or the supply of A has increased or both. 
C) decreased or the supply of A has decreased or both. 
D) increased or the supply of A has decreased or both. 
E) not changed.

Question 14

Which market is an example of a market for services?

Accepted Answer

A) orange market 
B) tennis lessons market 
C) factor market 
D) stock market 
E) foreign exchange market 
A) orange market 
B) tennis lessons market 
C) factor market 
D) stock market 
E) foreign exchange market

Question 15

The substitution effect influences food purchases because when the price of a certain food rises, other things remaining the same, _______ Consumers _______

Accepted Answer

A) its relative price does not change because most likely the prices of all other foods will also rise; continue to purchase all foods, but in smaller quantities 
B) its relative price rises; purchase more of a different food that is less expensive 
C) the relative price of all food rises; continue to purchase all foods, but in smaller quantities 
D) its relative price rises; purchase less of all foods 
E) the relative price of all food rises; purchase less of the food that has experienced the price increase and more of all other foods 
A) its relative price does not change because most likely the prices of all other foods will also rise; continue to purchase all foods, but in smaller quantities 
B) its relative price rises; purchase more of a different food that is less expensive 
C) the relative price of all food rises; continue to purchase all foods, but in smaller quantities 
D) its relative price rises; purchase less of all foods 
E) the relative price of all food rises; purchase less of the food that has experienced the price increase and more of all other foods

Question 16

Use the information below to answer the following questions.
Fact 3.5.1
The market for coffee is initially in equilibrium.Pepsi is a substitute for coffee; cream is a complement of coffee.Consider the for coffee.Assume that all ceteris paribus assumptions continue to hold except for the event listed.
-Refer to Fact 3.5.1.If coffee is a normal good, then a decrease in income will

Accepted Answer

A) decrease the price and the quantity demanded of coffee. 
B) increase the price and the quantity demanded of coffee. 
C) increase the price and the quantity supplied of coffee. 
D) have no effect on the market for coffee. 
E) decrease the price and the quantity supplied of coffee. 
A) decrease the price and the quantity demanded of coffee. 
B) increase the price and the quantity demanded of coffee. 
C) increase the price and the quantity supplied of coffee. 
D) have no effect on the market for coffee. 
E) decrease the price and the quantity supplied of coffee.

Question 17

The demand curve is P = 700 - 20QD.The supply curve is P = 300 + 20QS.At market equilibrium, the equilibrium quantity is _______ and the equilibrium price is _______ .

Accepted Answer

A) 20; 0.10 
B) 400; 40 
C) 500; 10 
D) 10; 500 
E) 0.10; 20 
A) 20; 0.10 
B) 400; 40 
C) 500; 10 
D) 10; 500 
E) 0.10; 20

Question 18

Suppose we observe a fall in the price of good A and an increase in the quantity of good A bought and sold.Which one of the following is a likely explanation?

Accepted Answer

A) The supply of A increased. 
B) The law of supply is violated. 
C) The demand for A increased. 
D) The demand for A decreased. 
E) The supply of A decreased. 
A) The supply of A increased. 
B) The law of supply is violated. 
C) The demand for A increased. 
D) The demand for A decreased. 
E) The supply of A decreased.

Question 19

The demand and supply model determines

Accepted Answer

A) supply prices but not demand prices. 
B) demand prices but not supply prices. 
C) absolute prices. 
D) relative prices. 
E) money prices. 
A) supply prices but not demand prices. 
B) demand prices but not supply prices. 
C) absolute prices. 
D) relative prices. 
E) money prices.

Question 20

Use the table below to answer the following questions.
Table 3.5.3  
-Refer to Table 3.5.3.The equilibrium price is $_______ and the equilibrium quantity is _______ t- shirts per month.

Accepted Answer

A) 8; 200 
B) 7; 220 
C) 6; 200 
D) 8; 180 
E) 8; 220 
A) 8; 200 
B) 7; 220 
C) 6; 200 
D) 8; 180 
E) 8; 220

Some sales managers are talking shop.Which one of the following quotations refers to a leftward shift of the demand curve?

Which of the following will definitely result in an increase in the equilibrium price?

People buy more of good 1 when the price of good 2 rises.Good 1 and good 2 are

Complete the following sentence.A surplus

A shortage is the amount by which quantity

Use the figure below to answer the following questions. Figure 3.2.1 -Given Figure 3.2.1, under what condition are consumers willing to buy more than 9,000 apples per week?

The y- axis intercept of the supply curve is 40 and the slope is 6.The equation of the supply curve is

Networks increase the price they charge cable television firms for programming.As a result, the price of cable television rises.Choose the correct statement.

If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 8,000 per year, there is a _ in the market and the price will _ .

Use the table below to answer the following questions. Price dollars per unit) Table 3.4.1 Quantity Demanded Quantity Supplied units) -In Table 3.4.1, the equilibrium quantity is

If we observe a rise in the equilibrium price of good A, we know that the demand for A has

Which market is an example of a market for services?

The substitution effect influences food purchases because when the price of a certain food rises, other things remaining the same, _ Consumers _

The demand curve is P = 700 - 20Q_D.The supply curve is P = 300 + 20Q_S.At market equilibrium, the equilibrium quantity is _ and the equilibrium price is _ .

Suppose we observe a fall in the price of good A and an increase in the quantity of good A bought and sold.Which one of the following is a likely explanation?

The demand and supply model determines

Use the table below to answer the following questions. Table 3.5.3 -Refer to Table 3.5.3.The equilibrium price is $_ and the equilibrium quantity is _ t- shirts per month.

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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 3: Demand and Supply

Some sales managers are talking shop.Which one of the following quotations refers to a leftward shift of the demand curve?

Which of the following will definitely result in an increase in the equilibrium price?

People buy more of good 1 when the price of good 2 rises.Good 1 and good 2 are

Complete the following sentence.A surplus

A shortage is the amount by which quantity

Use the figure below to answer the following questions. Figure 3.2.1 -Given Figure 3.2.1, under what condition are consumers willing to buy more than 9,000 apples per week?

The y- axis intercept of the supply curve is 40 and the slope is 6.The equation of the supply curve is

Networks increase the price they charge cable television firms for programming.As a result, the price of cable television rises.Choose the correct statement.

If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 8,000 per year, there is a _______ in the market and the price will _______ .

Use the table below to answer the following questions. Price dollars per unit) Table 3.4.1 Quantity Demanded Quantity Supplied units) -In Table 3.4.1, the equilibrium quantity is

If we observe a rise in the equilibrium price of good A, we know that the demand for A has

Which market is an example of a market for services?

The substitution effect influences food purchases because when the price of a certain food rises, other things remaining the same, _______ Consumers _______

The demand curve is P = 700 - 20QD.The supply curve is P = 300 + 20QS.At market equilibrium, the equilibrium quantity is _______ and the equilibrium price is _______ .

Suppose we observe a fall in the price of good A and an increase in the quantity of good A bought and sold.Which one of the following is a likely explanation?

The demand and supply model determines

Use the table below to answer the following questions. Table 3.5.3 -Refer to Table 3.5.3.The equilibrium price is $_______ and the equilibrium quantity is _______ t- shirts per month.

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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 8,000 per year, there is a _ in the market and the price will _ .

The substitution effect influences food purchases because when the price of a certain food rises, other things remaining the same, _ Consumers _

The demand curve is P = 700 - 20Q_D.The supply curve is P = 300 + 20Q_S.At market equilibrium, the equilibrium quantity is _ and the equilibrium price is _ .

Use the table below to answer the following questions. Table 3.5.3 -Refer to Table 3.5.3.The equilibrium price is $_ and the equilibrium quantity is _ t- shirts per month.