Question 1

Good A is a normal good if

Accepted Answer

A) good A satisfies the law of demand. 
B) a rise in the price of a substitute causes the demand for A to increase. 
C) income and the demand for A are negatively related. 
D) the demand for A increases when income rises. 
E) a rise in the price of a complement causes the demand for A to decrease. 
A) good A satisfies the law of demand. 
B) a rise in the price of a substitute causes the demand for A to increase. 
C) income and the demand for A are negatively related. 
D) the demand for A increases when income rises. 
E) a rise in the price of a complement causes the demand for A to decrease.

Question 2

Use the figure below to answer the following questions.
   Figure 3.4.1
-At price P1 in Figure 3.4.1,

Accepted Answer

A) both sides of the market are able to carry out their desired transactions. 
B) producers are unwilling to sell any goods. 
C) producers can sell all they plan to sell. 
D) consumers can buy all they want. 
E) a surplus exists. 
A) both sides of the market are able to carry out their desired transactions. 
B) producers are unwilling to sell any goods. 
C) producers can sell all they plan to sell. 
D) consumers can buy all they want. 
E) a surplus exists.

Question 3

When the supply of good A decreases,

Accepted Answer

A) the equilibrium price will decrease, but the equilibrium quantity will increase. 
B) the equilibrium price and the equilibrium quantity will increase. 
C) the equilibrium price will increase, but the equilibrium quantity will decrease. 
D) a surplus will result. 
E) the equilibrium price and the equilibrium quantity will decrease. 
A) the equilibrium price will decrease, but the equilibrium quantity will increase. 
B) the equilibrium price and the equilibrium quantity will increase. 
C) the equilibrium price will increase, but the equilibrium quantity will decrease. 
D) a surplus will result. 
E) the equilibrium price and the equilibrium quantity will decrease.

Question 4

The demand curve is P = 800 - 25QD.The supply curve is P = 500 + 25QS.At market equilibrium, the equilibrium quantity is _______ and the equilibrium price is _______ .

Accepted Answer

A) 1,300; zero 
B) 6.0; 650 
C) 25; 0.17 
D) 0.17; 25 
E) 650; 6.0 
A) 1,300; zero 
B) 6.0; 650 
C) 25; 0.17 
D) 0.17; 25 
E) 650; 6.0

Question 5

If demand increases and supply decreases, then the

Accepted Answer

A) equilibrium price rises but the effect on the equilibrium quantity is unknown. 
B) equilibrium quantity increases but the effect on the equilibrium price is unknown. 
C) equilibrium price falls but the effect on the equilibrium quantity is unknown. 
D) effect on both equilibrium price and quantity is unknown. 
E) equilibrium quantity decreases but the effect on the equilibrium price is unknown. 
A) equilibrium price rises but the effect on the equilibrium quantity is unknown. 
B) equilibrium quantity increases but the effect on the equilibrium price is unknown. 
C) equilibrium price falls but the effect on the equilibrium quantity is unknown. 
D) effect on both equilibrium price and quantity is unknown. 
E) equilibrium quantity decreases but the effect on the equilibrium price is unknown.

Question 6

The y- axis intercept of the demand curve is 60 and the slope is - 8.The equation of the demand curve is

Accepted Answer

A) P = 60 + 8QD. 
B) P = 60 - 8QD. 
C) P = 8 - 60QD. 
D) QD = 60 - 8P. 
E) QD = 60 + 8P. 
A) P = 60 + 8QD. 
B) P = 60 - 8QD. 
C) P = 8 - 60QD. 
D) QD = 60 - 8P. 
E) QD = 60 + 8P.

Question 7

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 there is an increase in the wages of farm workers who harvest coffee beans, the equilibrium quantity of coffee

Accepted Answer

A) increases. 
B) decreases. 
C) remains the same. 
D) increases or decreases depending on the slope of the supply and demand curves. 
E) increases or decreases depending on the relative shifts of the supply and demand curves. 
A) increases. 
B) decreases. 
C) remains the same. 
D) increases or decreases depending on the slope of the supply and demand curves. 
E) increases or decreases depending on the relative shifts of the supply and demand curves.

Question 8

Use the figure below to answer the following questions.
   Figure 3.4.2
-Refer to Figure 3.4.2.When the price is $10 a unit,

Accepted Answer

A) consumers will buy nothing. 
B) consumers will buy 500 units of output. 
C) a shortage occurs. 
D) the surplus is zero. 
E) consumers will buy 100 units of output. 
A) consumers will buy nothing. 
B) consumers will buy 500 units of output. 
C) a shortage occurs. 
D) the surplus is zero. 
E) consumers will buy 100 units of output.

Question 9

Use the figure below to answer the following questions.
   Figure 3.2.2
-Refer to Figure 3.2.2.If consumers' income increases,

Accepted Answer

A) the demand curve for pizzas shifts from D1 to D2 if a pizza is a normal good. 
B) a movement from point A to point B on D1 occurs. 
C) the quantity of pizzas demanded increases. 
D) the quantity of pizzas supplied decreases. 
E) the supply of pizzas increases. 
A) the demand curve for pizzas shifts from D1 to D2 if a pizza is a normal good. 
B) a movement from point A to point B on D1 occurs. 
C) the quantity of pizzas demanded increases. 
D) the quantity of pizzas supplied decreases. 
E) the supply of pizzas increases.

Question 10

Which one of the following will shift the supply curve of good X leftward?

Accepted Answer

A) a situation where the quantity of X demanded exceeds the quantity of X supplied 
B) a decrease in the cost of capital used to produce X 
C) a decrease in the wages of workers employed to produce X 
D) an increase in the cost of machinery used to produce X 
E) a technological change that increases production of X 
A) a situation where the quantity of X demanded exceeds the quantity of X supplied 
B) a decrease in the cost of capital used to produce X 
C) a decrease in the wages of workers employed to produce X 
D) an increase in the cost of machinery used to produce X 
E) a technological change that increases production of X

Question 11

The fact that a fall in the price of a good results in a decrease in the quantity of the good supplied illustrates

Accepted Answer

A) the law of supply. 
B) the nature of an inferior good. 
C) the law of demand. 
D) a change in supply. 
E) technological improvement. 
A) the law of supply. 
B) the nature of an inferior good. 
C) the law of demand. 
D) a change in supply. 
E) technological improvement.

Question 12

Figure 3.4.2
-At a price of $10 a unit in Figure 3.4.2,

Accepted Answer

A) there is a surplus of 400 units. 
B) there is a surplus of 200 units. 
C) there is a shortage of 200 units. 
D) there is a shortage of 400 units. 
E) supply exceeds demand. 
A) there is a surplus of 400 units. 
B) there is a surplus of 200 units. 
C) there is a shortage of 200 units. 
D) there is a shortage of 400 units. 
E) supply exceeds demand.

Question 13

Use the figure below to answer the following questions.
Table 3.5.2  
-Refer to Table 3.5.2.A premature frost destroys half the coffee trees.This change would be represented as a

Accepted Answer

A) movement down along the supply curve. 
B) rightward shift of the supply curve. 
C) leftward shift of the supply curve. 
D) leftward shift of the demand curve. 
E) rightward shift of the demand curve. 
A) movement down along the supply curve. 
B) rightward shift of the supply curve. 
C) leftward shift of the supply curve. 
D) leftward shift of the demand curve. 
E) rightward shift of the demand curve.

Question 14

The cost of producing aspirin increases at the same time as doctors discover that taking one aspirin per day reduces the risk of heart attacks.As a result, the

Accepted Answer

A) supply of aspirin decreases and the demand for aspirin increases. 
B) equilibrium quantity of aspirin decreases and the equilibrium price of aspirin rises. 
C) equilibrium quantity of aspirin increases and the equilibrium price of aspirin rises. 
D) supply of aspirin decreases by more than the demand for aspirin increases. 
E) supply of aspirin increases and the demand for aspirin decreases. 
A) supply of aspirin decreases and the demand for aspirin increases. 
B) equilibrium quantity of aspirin decreases and the equilibrium price of aspirin rises. 
C) equilibrium quantity of aspirin increases and the equilibrium price of aspirin rises. 
D) supply of aspirin decreases by more than the demand for aspirin increases. 
E) supply of aspirin increases and the demand for aspirin decreases.

Question 15

The demand curve slopes downward to the right because

Accepted Answer

A) an increase in income leads to increased consumption. 
B) as income rises, the quantity demanded increases. 
C) when expected future prices rise, the quantity demanded increases. 
D) of the substitution effect and the income effect. 
E) of comparative advantage. 
A) an increase in income leads to increased consumption. 
B) as income rises, the quantity demanded increases. 
C) when expected future prices rise, the quantity demanded increases. 
D) of the substitution effect and the income effect. 
E) of comparative advantage.

Question 16

Use the table below to answer the following questions.
Table 3.1.1  
-Refer to Table 3.1.1.In 2015, the relative price of coffee in terms of tea is

Accepted Answer

A) 1.00. 
B) 2.10. 
C) 1.07. 
D) 2.25. 
E) 0.93. 
A) 1.00. 
B) 2.10. 
C) 1.07. 
D) 2.25. 
E) 0.93.

Question 17

Bottled water and health club memberships are

Accepted Answer

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

Question 18

The price of good X falls and the demand for good Y decreases.We can conclude that

Accepted Answer

A) X is an inferior good. 
B) X and Y are substitutes in production. 
C) X and Y are complements. 
D) X and Y are substitutes. 
E) X is a normal good. 
A) X is an inferior good. 
B) X and Y are substitutes in production. 
C) X and Y are complements. 
D) X and Y are substitutes. 
E) X is a normal good.

Question 19

If both demand and supply increase, then the equilibrium price

Accepted Answer

A) falls but the equilibrium quantity increases. 
B) falls, and the equilibrium quantity could either increase or decrease. 
C) could either rise or fall, but the equilibrium quantity increases. 
D) and equilibrium quantity increases. 
E) rises, and the equilibrium quantity could either increase or decrease. 
A) falls but the equilibrium quantity increases. 
B) falls, and the equilibrium quantity could either increase or decrease. 
C) could either rise or fall, but the equilibrium quantity increases. 
D) and equilibrium quantity increases. 
E) rises, and the equilibrium quantity could either increase or decrease.

Question 20

The price of a good will fall if

Accepted Answer

A) demand for the good increases. 
B) supply of the good remains constant. 
C) supply of the good decreases. 
D) supply of the good increases. 
E) demand for the good remains constant. 
A) demand for the good increases. 
B) supply of the good remains constant. 
C) supply of the good decreases. 
D) supply of the good increases. 
E) demand for the good remains constant.

Good A is a normal good if

Use the figure below to answer the following questions. Figure 3.4.1 -At price P₁in Figure 3.4.1,

When the supply of good A decreases,

The demand curve is P = 800 - 25Q_D.The supply curve is P = 500 + 25Q_S.At market equilibrium, the equilibrium quantity is _ and the equilibrium price is _ .

If demand increases and supply decreases, then the

The y- axis intercept of the demand curve is 60 and the slope is - 8.The equation of the demand curve is

Use the figure below to answer the following questions. Figure 3.4.2 -Refer to Figure 3.4.2.When the price is $10 a unit,

Use the figure below to answer the following questions. Figure 3.2.2 -Refer to Figure 3.2.2.If consumers' income increases,

Which one of the following will shift the supply curve of good X leftward?

The fact that a fall in the price of a good results in a decrease in the quantity of the good supplied illustrates

Figure 3.4.2 -At a price of $10 a unit in Figure 3.4.2,

Use the figure below to answer the following questions. Table 3.5.2 -Refer to Table 3.5.2.A premature frost destroys half the coffee trees.This change would be represented as a

The cost of producing aspirin increases at the same time as doctors discover that taking one aspirin per day reduces the risk of heart attacks.As a result, the

The demand curve slopes downward to the right because

Use the table below to answer the following questions. Table 3.1.1 -Refer to Table 3.1.1.In 2015, the relative price of coffee in terms of tea is

Bottled water and health club memberships are

The price of good X falls and the demand for good Y decreases.We can conclude that

If both demand and supply increase, then the equilibrium price

The price of a good will fall if

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

Good A is a normal good if

Use the figure below to answer the following questions. Figure 3.4.1 -At price P1 in Figure 3.4.1,

When the supply of good A decreases,

The demand curve is P = 800 - 25QD.The supply curve is P = 500 + 25QS.At market equilibrium, the equilibrium quantity is _______ and the equilibrium price is _______ .

If demand increases and supply decreases, then the

The y- axis intercept of the demand curve is 60 and the slope is - 8.The equation of the demand curve is

Use the figure below to answer the following questions. Figure 3.4.2 -Refer to Figure 3.4.2.When the price is $10 a unit,

Use the figure below to answer the following questions. Figure 3.2.2 -Refer to Figure 3.2.2.If consumers' income increases,

Which one of the following will shift the supply curve of good X leftward?

The fact that a fall in the price of a good results in a decrease in the quantity of the good supplied illustrates

Figure 3.4.2 -At a price of $10 a unit in Figure 3.4.2,

Use the figure below to answer the following questions. Table 3.5.2 -Refer to Table 3.5.2.A premature frost destroys half the coffee trees.This change would be represented as a

The cost of producing aspirin increases at the same time as doctors discover that taking one aspirin per day reduces the risk of heart attacks.As a result, the

The demand curve slopes downward to the right because

Use the table below to answer the following questions. Table 3.1.1 -Refer to Table 3.1.1.In 2015, the relative price of coffee in terms of tea is

Bottled water and health club memberships are

The price of good X falls and the demand for good Y decreases.We can conclude that

If both demand and supply increase, then the equilibrium price

The price of a good will fall if

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

Use the figure below to answer the following questions. Figure 3.4.1 -At price P₁in Figure 3.4.1,

The demand curve is P = 800 - 25Q_D.The supply curve is P = 500 + 25Q_S.At market equilibrium, the equilibrium quantity is _ and the equilibrium price is _ .