Question 1

Income is a flow measure.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following will definitely occur when there is a simultaneous increase in demand and an increase in supply?

Accepted Answer

A)  an increase in equilibrium price 
B)  a decrease in equilibrium price 
C)  an increase in equilibrium quantity 
D)  a decrease in equilibrium quantity 
A)  an increase in equilibrium price 
B)  a decrease in equilibrium price 
C)  an increase in equilibrium quantity 
D)  a decrease in equilibrium quantity

Question 3

A movement along the supply curve is caused by a change in a good's own price.

Accepted Answer

A) True 
 B)False

Question 4

Refer to the information provided in Figure 3.16 below to answer the question(s) that follow.   Figure 3.16
-Refer to Figure 3.16. When the economy moves from Point E to Point B, there has been

Accepted Answer

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

Question 5

Refer to the information provided in Figure 3.11 below to answer the following question(s).   Figure 3.11
-Refer to Figure 3.11. A decrease in the price of mushrooms (an input for gardenburgers) will cause a movement from Point B on supply curve S2 to

Accepted Answer

A)  supply curve S3. 
B)  supply curve S1. 
C)  Point A on supply curve S2. 
D)  Point C on supply curve S2. 
A)  supply curve S3. 
B)  supply curve S1. 
C)  Point A on supply curve S2. 
D)  Point C on supply curve S2.

Question 6

Refer to Scenario 3.3 below to answer the question(s) that follow.
SCENARIO 3.3:
-Mustard and mayonnaise are substitutes.
-Mustard and relish are complements.
-Mustard is a normal good.
-During the summer, about 50% of all mustard was recalled by manufacturers and removed from store shelves.
-Refer to Scenario 3.3. The mustard recall would have caused

Accepted Answer

A)  an increase in the demand for relish. 
B)  an increase in the quantity demanded of relish. 
C)  a decrease in the demand for relish. 
D)  a decrease in the quantity demanded of relish. 
A)  an increase in the demand for relish. 
B)  an increase in the quantity demanded of relish. 
C)  a decrease in the demand for relish. 
D)  a decrease in the quantity demanded of relish.

Question 7

Refer to the information provided in Figure 3.11 below to answer the following question(s).   Figure 3.11
-Refer to Figure 3.11. A movement from Point C to Point B on supply curve S2 would be caused by a(n)

Accepted Answer

A)  decrease in the price of gardenburgers. 
B)  increase in the demand for gardenburgers. 
C)  decrease in the price of mushrooms. 
D)  decrease in the price of hamburgers, assuming hamburgers are a substitute for pizza. 
A)  decrease in the price of gardenburgers. 
B)  increase in the demand for gardenburgers. 
C)  decrease in the price of mushrooms. 
D)  decrease in the price of hamburgers, assuming hamburgers are a substitute for pizza.

Question 8

Refer to Scenario 3.3 below to answer the question(s) that follow.
SCENARIO 3.3:
-Mustard and mayonnaise are substitutes.
-Mustard and relish are complements.
-Mustard is a normal good.
-During the summer, about 50% of all mustard was recalled by manufacturers and removed from store shelves.
-Refer to Scenario 3.3. If at the same time of the mustard recall, consumer income also decreased. Then, ceteris paribus, in the market for mustard this would have caused

Accepted Answer

A)  both the equilibrium price and quantity to decrease. 
B)  the equilibrium price to increase and the equilibrium quantity to decrease. 
C)  the equilibrium price to either increase, decrease, or remain the same and the equilibrium quantity to decrease. 
D)  the equilibrium quantity could have increased, decreased, or remained the same and the equilibrium price to decrease. 
A)  both the equilibrium price and quantity to decrease. 
B)  the equilibrium price to increase and the equilibrium quantity to decrease. 
C)  the equilibrium price to either increase, decrease, or remain the same and the equilibrium quantity to decrease. 
D)  the equilibrium quantity could have increased, decreased, or remained the same and the equilibrium price to decrease.

Question 9

A good whose demand is directly related to income is a(n)

Accepted Answer

A)  normal good. 
B)  inferior good. 
C)  regular good. 
D)  new good. 
A)  normal good. 
B)  inferior good. 
C)  regular good. 
D)  new good.

Question 10

Refer to the information provided in Figure 3.13 below to answer the question(s) that follow.   Figure 3.13
-Refer to Figure 3.13. A decrease in the number of cattle ranchers will cause a movement from

Accepted Answer

A)  Point A to Point B. 
B)  Point G to Point F. 
C)  D2 to D1. 
D)  S1 to S2. 
A)  Point A to Point B. 
B)  Point G to Point F. 
C)  D2 to D1. 
D)  S1 to S2.

Question 11

Inputs are traded in the factor market.

Accepted Answer

A) True 
 B)False

Question 12

Refer to Scenario 3.1 below to answer the question(s) that follow.
SCENARIO 3.1
-Streaming movies and movies shown in theaters are substitutes.
-Streaming movies and OLED TVs are complements.
-OLED TVs and movies shown in theaters are normal goods.
-People watch streaming movies more often in the winter than in the summer.
-Refer to Scenario 3.1. Most OLED TVs sold in the United States are imported from Asia. If the United States government eliminates a quota that reduced the number of OLED TVs that can be imported into the United States, ceteris paribus, what would happen?

Accepted Answer

A)  The price of OLED TVs and the price of streaming movies would increase. 
B)  The price of OLED TVs and the price of streaming movies would decrease. 
C)  The price of OLED TVs would decrease and the price of streaming movies would increase. 
D)  The price of OLED TVs would increase and the price of streaming movies would decrease. 
A)  The price of OLED TVs and the price of streaming movies would increase. 
B)  The price of OLED TVs and the price of streaming movies would decrease. 
C)  The price of OLED TVs would decrease and the price of streaming movies would increase. 
D)  The price of OLED TVs would increase and the price of streaming movies would decrease.

Question 13

Refer to the information provided in Table 3.2 below to answer the question(s) that follow.
Table 3.2
 $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Price per } \
\text { Cheeseburger }
\end{array} & \begin{array} { c } 
\text { Quantity Demanded } \
\text { (Cheeseburgers per } \
\text { Month) }
\end{array} & \begin{array} { c } 
\text { Quantity Supplied } \
\text { (Cheeseburgers per } \
\text { Month) }
\end{array} \
\hline \$ 5 & 1,500 & 500 \
\hline 6 & 1,200 & 700 \
\hline 7 & 900 & 900 \
\hline 8 & 600 & 1,100 \
\hline 9 & 300 & 1,300 \
\hline
\end{array}$$
-Refer to Table 3.2. If the price per cheeseburger is $5, there is an excess

Accepted Answer

A)  demand of 300 cheeseburgers. 
B)  supply of 500 cheeseburgers. 
C)  demand of 1,000 cheeseburgers. 
D)  supply of 2,000 cheeseburgers. 
A)  demand of 300 cheeseburgers. 
B)  supply of 500 cheeseburgers. 
C)  demand of 1,000 cheeseburgers. 
D)  supply of 2,000 cheeseburgers.

Question 14

In response to news reports that drinking a glass of red wine each day can reduce an individual's risk of heart disease, there will most likely be a(n)

Accepted Answer

A)  increase in the demand for red wine. 
B)  decrease in the supply of red wine. 
C)  increase in the supply of red wine. 
D)  increase in the quantity demanded of red wine. 
A)  increase in the demand for red wine. 
B)  decrease in the supply of red wine. 
C)  increase in the supply of red wine. 
D)  increase in the quantity demanded of red wine.

Question 15

Related to the Economics in Practice on p. 51: The Amazon Kindle and the electronic textbooks available for the Kindle are complementary goods. Electronic textbooks and traditional, hard-copy textbooks are substitute products. If the price of the Kindle decreases

Accepted Answer

A)  demand for the Kindle increases and demand for traditional, hard-copy textbooks decreases. 
B)  the quantity of Kindles demanded increases and demand for electronic textbooks increases. 
C)  demand for the Kindle increases and the quantity of electronic textbooks demanded increases. 
D)  the quantity of Kindles demanded increases and the quantity of electronic textbooks demanded increases. 
A)  demand for the Kindle increases and demand for traditional, hard-copy textbooks decreases. 
B)  the quantity of Kindles demanded increases and demand for electronic textbooks increases. 
C)  demand for the Kindle increases and the quantity of electronic textbooks demanded increases. 
D)  the quantity of Kindles demanded increases and the quantity of electronic textbooks demanded increases.

Question 16

When there is a shortage of a product in an unregulated market, there is a tendency for

Accepted Answer

A)  price to rise. 
B)  price to fall. 
C)  quantity demanded to increase. 
D)  quantity supplied to decrease. 
A)  price to rise. 
B)  price to fall. 
C)  quantity demanded to increase. 
D)  quantity supplied to decrease.

Question 17

Refer to the information provided in Figure 3.16 below to answer the question(s) that follow.   Figure 3.16
-Refer to Figure 3.16. When the economy moves from Point A to Point E, there has been

Accepted Answer

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

Question 18

Payment in the land market is called rent.

Accepted Answer

A) True 
 B)False

Question 19

Related to the Economics in Practice on p. 51: The Amazon Kindle and the electronic textbooks available for the Kindle are complementary goods. Electronic textbooks and traditional, hard-copy textbooks are substitute products. If the price of electronic textbooks for the Kindle increases

Accepted Answer

A)  demand for the Kindle decreases, demand for electronic textbooks decreases, and demand for traditional, hard-copy textbooks increases. 
B)  the quantity of Kindles demanded decreases, demand for electronic textbooks decreases, and the quantity of traditional, hard-copy textbooks demanded increases. 
C)  demand for the Kindle increases, the quantity of electronic textbooks demanded decreases, and demand for traditional, hard-copy textbooks increases. 
D)  demand for the Kindle decreases, the quantity of electronic textbooks demanded decreases, and demand for traditional, hard-copy textbooks increases. 
A)  demand for the Kindle decreases, demand for electronic textbooks decreases, and demand for traditional, hard-copy textbooks increases. 
B)  the quantity of Kindles demanded decreases, demand for electronic textbooks decreases, and the quantity of traditional, hard-copy textbooks demanded increases. 
C)  demand for the Kindle increases, the quantity of electronic textbooks demanded decreases, and demand for traditional, hard-copy textbooks increases. 
D)  demand for the Kindle decreases, the quantity of electronic textbooks demanded decreases, and demand for traditional, hard-copy textbooks increases.

Question 20

During an economic upturn when consumer income rises, the demand for caviar increases and the demand for hummus decreases. This implies that caviar

Accepted Answer

A)  and hummus are complements. 
B)  is a normal good and hummus is an inferior good. 
C)  is an inferior good and hummus is a normal good. 
D)  is an economic bad and hummus is an economic good. 
A)  and hummus are complements. 
B)  is a normal good and hummus is an inferior good. 
C)  is an inferior good and hummus is a normal good. 
D)  is an economic bad and hummus is an economic good.

Income is a flow measure.

Which of the following will definitely occur when there is a simultaneous increase in demand and an increase in supply?

A movement along the supply curve is caused by a change in a good's own price.

Refer to the information provided in Figure 3.16 below to answer the question(s) that follow. Figure 3.16 -Refer to Figure 3.16. When the economy moves from Point E to Point B, there has been

Refer to the information provided in Figure 3.11 below to answer the following question(s). Figure 3.11 -Refer to Figure 3.11. A decrease in the price of mushrooms (an input for gardenburgers) will cause a movement from Point B on supply curve S₂ to

Refer to the information provided in Figure 3.11 below to answer the following question(s). Figure 3.11 -Refer to Figure 3.11. A movement from Point C to Point B on supply curve S₂ would be caused by a(n)

A good whose demand is directly related to income is a(n)

Refer to the information provided in Figure 3.13 below to answer the question(s) that follow. Figure 3.13 -Refer to Figure 3.13. A decrease in the number of cattle ranchers will cause a movement from

Inputs are traded in the factor market.

In response to news reports that drinking a glass of red wine each day can reduce an individual's risk of heart disease, there will most likely be a(n)

Related to the Economics in Practice on p. 51: The Amazon Kindle and the electronic textbooks available for the Kindle are complementary goods. Electronic textbooks and traditional, hard-copy textbooks are substitute products. If the price of the Kindle decreases

When there is a shortage of a product in an unregulated market, there is a tendency for

Refer to the information provided in Figure 3.16 below to answer the question(s) that follow. Figure 3.16 -Refer to Figure 3.16. When the economy moves from Point A to Point E, there has been

Payment in the land market is called rent.

Related to the Economics in Practice on p. 51: The Amazon Kindle and the electronic textbooks available for the Kindle are complementary goods. Electronic textbooks and traditional, hard-copy textbooks are substitute products. If the price of electronic textbooks for the Kindle increases

During an economic upturn when consumer income rises, the demand for caviar increases and the demand for hummus decreases. This implies that caviar

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand and Supply Applications

Elasticity

Household Behavior and Consumer Choice

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: the Labor and Land Markets

Input Demand: the Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Common Resources

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: the Economics of Taxation

International Trade, Comparative Advantage, and Protectionism

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

Exam 3: Demand, Supply, and Market Equilibrium

Income is a flow measure.

Which of the following will definitely occur when there is a simultaneous increase in demand and an increase in supply?

A movement along the supply curve is caused by a change in a good's own price.

Refer to the information provided in Figure 3.16 below to answer the question(s) that follow. Figure 3.16 -Refer to Figure 3.16. When the economy moves from Point E to Point B, there has been

Refer to the information provided in Figure 3.11 below to answer the following question(s). Figure 3.11 -Refer to Figure 3.11. A decrease in the price of mushrooms (an input for gardenburgers) will cause a movement from Point B on supply curve S2 to

Refer to the information provided in Figure 3.11 below to answer the following question(s). Figure 3.11 -Refer to Figure 3.11. A movement from Point C to Point B on supply curve S2 would be caused by a(n)

A good whose demand is directly related to income is a(n)

Refer to the information provided in Figure 3.13 below to answer the question(s) that follow. Figure 3.13 -Refer to Figure 3.13. A decrease in the number of cattle ranchers will cause a movement from

Inputs are traded in the factor market.

In response to news reports that drinking a glass of red wine each day can reduce an individual's risk of heart disease, there will most likely be a(n)

Related to the Economics in Practice on p. 51: The Amazon Kindle and the electronic textbooks available for the Kindle are complementary goods. Electronic textbooks and traditional, hard-copy textbooks are substitute products. If the price of the Kindle decreases

When there is a shortage of a product in an unregulated market, there is a tendency for

Refer to the information provided in Figure 3.16 below to answer the question(s) that follow. Figure 3.16 -Refer to Figure 3.16. When the economy moves from Point A to Point E, there has been

Payment in the land market is called rent.

Related to the Economics in Practice on p. 51: The Amazon Kindle and the electronic textbooks available for the Kindle are complementary goods. Electronic textbooks and traditional, hard-copy textbooks are substitute products. If the price of electronic textbooks for the Kindle increases

During an economic upturn when consumer income rises, the demand for caviar increases and the demand for hummus decreases. This implies that caviar

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand and Supply Applications

Elasticity

Household Behavior and Consumer Choice

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: the Labor and Land Markets

Input Demand: the Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Common Resources

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: the Economics of Taxation

International Trade, Comparative Advantage, and Protectionism

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

Refer to the information provided in Figure 3.11 below to answer the following question(s). Figure 3.11 -Refer to Figure 3.11. A decrease in the price of mushrooms (an input for gardenburgers) will cause a movement from Point B on supply curve S₂ to

Refer to the information provided in Figure 3.11 below to answer the following question(s). Figure 3.11 -Refer to Figure 3.11. A movement from Point C to Point B on supply curve S₂ would be caused by a(n)