Question 1

Two goods are complements if:

Accepted Answer

A)  the demand for one good decreases when the price of the other increases. 
B)  the supply of one good decreases when the price of the other decreases. 
C)  the demand for one good decreases when the price of the other decreases. 
D)  the supply of one good decreases when the price of the other increases. 
A)  the demand for one good decreases when the price of the other increases. 
B)  the supply of one good decreases when the price of the other decreases. 
C)  the demand for one good decreases when the price of the other decreases. 
D)  the supply of one good decreases when the price of the other increases.

Question 2

Figure 4.6
-Figure 4.6 illustrates a set of supply and demand curves for a product. Suppose that the market is currently in point A. If the price of the input of the product decreases, the market will move to point:

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
A)  A. 
B)  B. 
C)  C. 
D)  D.

Question 3

Bananas and apples are substitutes. When the price of bananas falls, the equilibrium quantity of apples will _______ and the equilibrium price of apples will _______.

Accepted Answer

A)  rise; rise 
B)  rise; fall 
C)  fall; rise 
D)  fall; fall 
A)  rise; rise 
B)  rise; fall 
C)  fall; rise 
D)  fall; fall

Question 4

If a market is in equilibrium, there is not any pressure to change the price upward or downward. Is this a true or false assumption?

Accepted Answer

A) True 
 B)False

Question 5

Suppose that a new advertising campaign extolling the virtues of apple juice is successful and a major freeze destroys half of the country's apple crop. What happens to the price and quantity of apple juice?

Accepted Answer

A)  The equilibrium price of apple juice might rise or fall and the equilibrium quantity of apple juice falls. 
B)  The equilibrium price of apple juice might rise or fall and the equilibrium quantity of apple juice rises. 
C)  The equilibrium price of apple juice rises and the equilibrium quantity of apple juice might rise or fall. 
D)  The equilibrium price of apple juice falls and the equilibrium quantity of apple juice might rise or fall. 
A)  The equilibrium price of apple juice might rise or fall and the equilibrium quantity of apple juice falls. 
B)  The equilibrium price of apple juice might rise or fall and the equilibrium quantity of apple juice rises. 
C)  The equilibrium price of apple juice rises and the equilibrium quantity of apple juice might rise or fall. 
D)  The equilibrium price of apple juice falls and the equilibrium quantity of apple juice might rise or fall.

Question 6

Figure 4.7
-If supply increases in Figure 4.7, then the equilibrium:

Accepted Answer

A)  price and quantity rise. 
B)  price rises and quantity falls. 
C)  price falls and quantity rises. 
D)  price and quantity fall. 
A)  price and quantity rise. 
B)  price rises and quantity falls. 
C)  price falls and quantity rises. 
D)  price and quantity fall.

Question 7

Figure 4.2
-In Figure 4.2, which of the panels depicts a market in which there is an excess supply of a product?

Accepted Answer

A)  Panel A 
B)  Panel B 
C)  Panel C 
D)  None of the panels depicts a market in which there is an excess supply of a product. 
A)  Panel A 
B)  Panel B 
C)  Panel C 
D)  None of the panels depicts a market in which there is an excess supply of a product.

Question 8

Relative to hotdogs, hotdog buns are considered:

Accepted Answer

A)  substitutes. 
B)  inputs. 
C)  luxury goods. 
D)  complements. 
A)  substitutes. 
B)  inputs. 
C)  luxury goods. 
D)  complements.

Question 9

If the price of crude oil (an input to the production of gasoline) decreases, then we will expect to see:

Accepted Answer

A)  a shift in the supply of gasoline to the left. 
B)  a movement along the supply curve for gasoline downwards. 
C)  a movement along the supply curve for gasoline upwards. 
D)  a shift in the supply of gasoline to the right. 
A)  a shift in the supply of gasoline to the left. 
B)  a movement along the supply curve for gasoline downwards. 
C)  a movement along the supply curve for gasoline upwards. 
D)  a shift in the supply of gasoline to the right.

Question 10

The effect of income on the demand for normal goods is such that

Accepted Answer

A)  as the price of a normal good falls, people are likely to buy less of the good. 
B)  as the price of a good falls, people are likely to buy less of all normal goods. 
C)  as the price of a good falls, people are likely to buy more of all normal goods. 
D)  both A and C 
A)  as the price of a normal good falls, people are likely to buy less of the good. 
B)  as the price of a good falls, people are likely to buy less of all normal goods. 
C)  as the price of a good falls, people are likely to buy more of all normal goods. 
D)  both A and C

Question 11

When there is a change in the quantity demanded it means that the:

Accepted Answer

A)  quantity a consumer is willing to buy changes when the price changes. 
B)  hours the customer can buy products each day have increased. 
C)  number of products in inventory have increased. 
D)  selling price of the products has not changed. 
A)  quantity a consumer is willing to buy changes when the price changes. 
B)  hours the customer can buy products each day have increased. 
C)  number of products in inventory have increased. 
D)  selling price of the products has not changed.

Question 12

If sellers have an expectation of lower future prices:

Accepted Answer

A)  the current supply of that good will decrease. 
B)  the current demand for that good will decrease. 
C)  the current demand for that good will increase. 
D)  the current supply of that good will increase. 
A)  the current supply of that good will decrease. 
B)  the current demand for that good will decrease. 
C)  the current demand for that good will increase. 
D)  the current supply of that good will increase.

Question 13

Figure 4.5
-Figure 4.5 illustrates the supply of guitars. If the government offered a subsidy to guitar manufacturers for each guitar they produce, this would most likely cause a movement from:

Accepted Answer

A)  point B to point A. 
B)  S1 to S0. 
C)  S1 to S2. 
D)  point B to point C. 
A)  point B to point A. 
B)  S1 to S0. 
C)  S1 to S2. 
D)  point B to point C.

Question 14

Peaches and cream are complements. When the price of peaches rises, the equilibrium quantity of cream will _______ and the equilibrium price of cream will _______ .

Accepted Answer

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

Question 15

Hops are used to produce beer. If the price of hops decreases:

Accepted Answer

A)  the supply of beer decreases. 
B)  the supply of beer increases. 
C)  the demand for beer increases. 
D)  the demand for beer decreases. 
A)  the supply of beer decreases. 
B)  the supply of beer increases. 
C)  the demand for beer increases. 
D)  the demand for beer decreases.

Question 16

If the price of hotdogs are expected to increase in the future, then:

Accepted Answer

A)  the current demand for hotdogs will decrease. 
B)  the current demand for hotdogs will increase. 
C)  the current quantity demanded for hotdogs will decrease. 
D)  the current quantity demanded for hotdogs will increase. 
A)  the current demand for hotdogs will decrease. 
B)  the current demand for hotdogs will increase. 
C)  the current quantity demanded for hotdogs will decrease. 
D)  the current quantity demanded for hotdogs will increase.

Question 17

Complementary goods are goods that are normally consumed together.

Accepted Answer

A) True 
 B)False

Question 18

Figure 4.7
-If demand increases in Figure 4.7, then the equilibrium:

Accepted Answer

A)  price and quantity rise. 
B)  price rises and quantity falls. 
C)  price falls and quantity rises. 
D)  price and quantity fall. 
A)  price and quantity rise. 
B)  price rises and quantity falls. 
C)  price falls and quantity rises. 
D)  price and quantity fall.

Question 19

Which of the following are most likely to be considered substitutes to pizzas?

Accepted Answer

A)  soda 
B)  pepperoni 
C)  cheese 
D)  hamburgers 
A)  soda 
B)  pepperoni 
C)  cheese 
D)  hamburgers

Question 20

Figure 4.2
-In Figure 4.2, which of the panels depicts a market in which there is an excess demand for a product?

Accepted Answer

A)  Panel A 
B)  Panel B 
C)  Panel C 
D)  None of the panels depicts a market in which there is an excess demand for a product. 
A)  Panel A 
B)  Panel B 
C)  Panel C 
D)  None of the panels depicts a market in which there is an excess demand for a product.

Two goods are complements if:

Figure 4.6 -Figure 4.6 illustrates a set of supply and demand curves for a product. Suppose that the market is currently in point A. If the price of the input of the product decreases, the market will move to point:

Bananas and apples are substitutes. When the price of bananas falls, the equilibrium quantity of apples will _ and the equilibrium price of apples will _.

If a market is in equilibrium, there is not any pressure to change the price upward or downward. Is this a true or false assumption?

Suppose that a new advertising campaign extolling the virtues of apple juice is successful and a major freeze destroys half of the country's apple crop. What happens to the price and quantity of apple juice?

Figure 4.7 -If supply increases in Figure 4.7, then the equilibrium:

Figure 4.2 -In Figure 4.2, which of the panels depicts a market in which there is an excess supply of a product?

Relative to hotdogs, hotdog buns are considered:

If the price of crude oil (an input to the production of gasoline) decreases, then we will expect to see:

The effect of income on the demand for normal goods is such that

When there is a change in the quantity demanded it means that the:

If sellers have an expectation of lower future prices:

Figure 4.5 -Figure 4.5 illustrates the supply of guitars. If the government offered a subsidy to guitar manufacturers for each guitar they produce, this would most likely cause a movement from:

Peaches and cream are complements. When the price of peaches rises, the equilibrium quantity of cream will _ and the equilibrium price of cream will _ .

Hops are used to produce beer. If the price of hops decreases:

If the price of hotdogs are expected to increase in the future, then:

Complementary goods are goods that are normally consumed together.

Figure 4.7 -If demand increases in Figure 4.7, then the equilibrium:

Which of the following are most likely to be considered substitutes to pizzas?

Figure 4.2 -In Figure 4.2, which of the panels depicts a market in which there is an excess demand for a product?

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Measuring a Nations Production and Income

Unemployment and Inflation

The Economy at Full Employment

Why Do Economies Grow

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Income-Expenditure Model

Investment and Financial Markets

Money and the Banking System

The Federal Reserve and Monetary Policy

Modern Macroeconomics: From the Short Run to the Long Run

The Dynamics of Inflation and Unemployment

Macroeconomic Policy Debates

International Trade and Public Policy

The World of International Finance

Filters

Exam 4: Demand, Supply, and Market Equilibrium

Two goods are complements if:

Figure 4.6 -Figure 4.6 illustrates a set of supply and demand curves for a product. Suppose that the market is currently in point A. If the price of the input of the product decreases, the market will move to point:

Bananas and apples are substitutes. When the price of bananas falls, the equilibrium quantity of apples will _______ and the equilibrium price of apples will _______.

If a market is in equilibrium, there is not any pressure to change the price upward or downward. Is this a true or false assumption?

Suppose that a new advertising campaign extolling the virtues of apple juice is successful and a major freeze destroys half of the country's apple crop. What happens to the price and quantity of apple juice?

Figure 4.7 -If supply increases in Figure 4.7, then the equilibrium:

Figure 4.2 -In Figure 4.2, which of the panels depicts a market in which there is an excess supply of a product?

Relative to hotdogs, hotdog buns are considered:

If the price of crude oil (an input to the production of gasoline) decreases, then we will expect to see:

The effect of income on the demand for normal goods is such that

When there is a change in the quantity demanded it means that the:

If sellers have an expectation of lower future prices:

Figure 4.5 -Figure 4.5 illustrates the supply of guitars. If the government offered a subsidy to guitar manufacturers for each guitar they produce, this would most likely cause a movement from:

Peaches and cream are complements. When the price of peaches rises, the equilibrium quantity of cream will _______ and the equilibrium price of cream will _______ .

Hops are used to produce beer. If the price of hops decreases:

If the price of hotdogs are expected to increase in the future, then:

Complementary goods are goods that are normally consumed together.

Figure 4.7 -If demand increases in Figure 4.7, then the equilibrium:

Which of the following are most likely to be considered substitutes to pizzas?

Figure 4.2 -In Figure 4.2, which of the panels depicts a market in which there is an excess demand for a product?

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Measuring a Nations Production and Income

Unemployment and Inflation

The Economy at Full Employment

Why Do Economies Grow

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Income-Expenditure Model

Investment and Financial Markets

Money and the Banking System

The Federal Reserve and Monetary Policy

Modern Macroeconomics: From the Short Run to the Long Run

The Dynamics of Inflation and Unemployment

Macroeconomic Policy Debates

International Trade and Public Policy

The World of International Finance

Filters

Bananas and apples are substitutes. When the price of bananas falls, the equilibrium quantity of apples will _ and the equilibrium price of apples will _.

Peaches and cream are complements. When the price of peaches rises, the equilibrium quantity of cream will _ and the equilibrium price of cream will _ .