Question 1

A movement along the demand curve to the right may be caused by a(n)

Accepted Answer

A)  decrease in income. 
B)  increase in supply. 
C)  fall in the number of substitute goods. 
D)  rise in the price of inputs. 
A)  decrease in income. 
B)  increase in supply. 
C)  fall in the number of substitute goods. 
D)  rise in the price of inputs.

Question 2

An entrepreneur is a person who

Accepted Answer

A)  assumes the risk of a firm. 
B)  organizes and manages a firm. 
C)  turns a new idea or product into a business. 
D)  all of the above 
A)  assumes the risk of a firm. 
B)  organizes and manages a firm. 
C)  turns a new idea or product into a business. 
D)  all of the above

Question 3

An insect that is resistant to currently used pesticides has infested the cotton crop, and this year's crop is only half of what was produced last year. You accurately predict that this

Accepted Answer

A)  will shift the supply curve of cotton to the right, the equilibrium price of cotton will increase, and the demand for cotton will fall. 
B)  will shift the supply curve of cotton to the right, the equilibrium price of cotton will increase, and the quantity demanded of cotton will decrease. 
C)  will shift the supply curve of cotton to the left, the equilibrium price of cotton will increase, and the quantity demanded of cotton will decrease. 
D)  will shift the supply curve of cotton to the left, the equilibrium price of cotton will increase, and the demand for cotton will fall. 
A)  will shift the supply curve of cotton to the right, the equilibrium price of cotton will increase, and the demand for cotton will fall. 
B)  will shift the supply curve of cotton to the right, the equilibrium price of cotton will increase, and the quantity demanded of cotton will decrease. 
C)  will shift the supply curve of cotton to the left, the equilibrium price of cotton will increase, and the quantity demanded of cotton will decrease. 
D)  will shift the supply curve of cotton to the left, the equilibrium price of cotton will increase, and the demand for cotton will fall.

Question 4

An increase in the wage rate of diamond cutters will increase the supply of cut diamonds.

Accepted Answer

A) True 
 B)False

Question 5

The consuming units in an economy are known as

Accepted Answer

A)  firms. 
B)  entrepreneurs. 
C)  households. 
D)  factors. 
A)  firms. 
B)  entrepreneurs. 
C)  households. 
D)  factors.

Question 6

Inferior goods are also known as substitute goods.

Accepted Answer

A) True 
 B)False

Question 7

An increase in demand for laptop computers would likely be caused by

Accepted Answer

A)  an increase in the price of a substitute good. 
B)  an increase in the price of laptop computers. 
C)  an increase in the price of a complementary good. 
D)  a decrease in the price of laptop computers. 
A)  an increase in the price of a substitute good. 
B)  an increase in the price of laptop computers. 
C)  an increase in the price of a complementary good. 
D)  a decrease in the price of laptop computers.

Question 8

Refer to the information provided in Figure 3.19 below to answer the question(s) that follow.   Figure 3.19
-Refer to Figure 3.19. The market is initially in equilibrium at Point B. If supply shifts from S2 to S1, the new equilibrium price will be ________ and the new equilibrium quantity will be ________.

Accepted Answer

A)  $5.00; 4 
B)  $5.00; 10 
C)  $7.00; 6 
D)  $7.00; 7 
A)  $5.00; 4 
B)  $5.00; 10 
C)  $7.00; 6 
D)  $7.00; 7

Question 9

In an output market

Accepted Answer

A)  consumers purchase products. 
B)  firms purchase resources. 
C)  households earn income. 
D)  land, labor, and capital may be exchanged. 
A)  consumers purchase products. 
B)  firms purchase resources. 
C)  households earn income. 
D)  land, labor, and capital may be exchanged.

Question 10

An increase in the price of a good or service leads to a(n) ________ that leads to a(n) ________.

Accepted Answer

A)  decrease in demand; movement along the demand curve 
B)  decrease in quantity demanded; movement along the demand curve 
C)  increase in demand; shift of the demand curve 
D)  increase in quantity demanded; shift of the demand curve 
A)  decrease in demand; movement along the demand curve 
B)  decrease in quantity demanded; movement along the demand curve 
C)  increase in demand; shift of the demand curve 
D)  increase in quantity demanded; shift of the demand curve

Question 11

Refer to the information provided in Figure 3.17 below to answer the question(s) that follow.   Figure 3.17
-Refer to Figure 3.17. If the current quantity demanded of rollerblades is 150 per week, you accurately predict that in this market

Accepted Answer

A)  price and quantity supplied will increase and quantity demanded will decrease. 
B)  price and quantity supplied will decrease and quantity demanded will increase. 
C)  price, quantity supplied and quantity demanded will increase. 
D)  price, quantity supplied and quantity demanded will decrease. 
A)  price and quantity supplied will increase and quantity demanded will decrease. 
B)  price and quantity supplied will decrease and quantity demanded will increase. 
C)  price, quantity supplied and quantity demanded will increase. 
D)  price, quantity supplied and quantity demanded will decrease.

Question 12

Refer to the information provided in Figure 3.8 below to answer the following question(s).   Figure 3.8
-Refer to Figure 3.8. Assume there are only two people in the market for baseball caps: Alex and Ryan. Along the ________, at a price of $8, quantity demanded would be 7.

Accepted Answer

A)  demand curve for Alex only 
B)  demand curve for Ryan only 
C)  market demand curve 
D)  demand curves for both Ryan and Alex 
A)  demand curve for Alex only 
B)  demand curve for Ryan only 
C)  market demand curve 
D)  demand curves for both Ryan and Alex

Question 13

Most firms exist to make a profit.

Accepted Answer

A) True 
 B)False

Question 14

Refer to the information provided in Figure 3.7 below to answer the following question(s).   Figure 3.7
-Refer to Figure 3.7. If pizza and beer are complementary goods, an increase in the price of beer will cause a movement from Point B on demand curve D2 to

Accepted Answer

A)  demand curve D1. 
B)  demand curve D3. 
C)  Point A on demand curve D2. 
D)  Point C on demand curve D2. 
A)  demand curve D1. 
B)  demand curve D3. 
C)  Point A on demand curve D2. 
D)  Point C on demand curve D2.

Question 15

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 $8, the price will

Accepted Answer

A)  remain constant because the market is in equilibrium. 
B)  decrease because there is an excess demand in the market. 
C)  increase because there is an excess supply in the market. 
D)  decrease because there is an excess supply in the market. 
A)  remain constant because the market is in equilibrium. 
B)  decrease because there is an excess demand in the market. 
C)  increase because there is an excess supply in the market. 
D)  decrease because there is an excess supply in the market.

Question 16

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. If the number of sites streaming movies increases by 10%, which of the following would occur?

Accepted Answer

A)  The price of streaming movies would increase and the price of OLED TVs and movie tickets would decrease. 
B)  The price of streaming movies and the price of movie tickets would decrease, but the price of OLED TVs would increase. 
C)  The price of streaming movies and the price of movie tickets would increase, but the price of OLED TVs would decrease. 
D)  The price of streaming movies would increase, but the price of OLED TVs and movie tickets would be unaffected. 
A)  The price of streaming movies would increase and the price of OLED TVs and movie tickets would decrease. 
B)  The price of streaming movies and the price of movie tickets would decrease, but the price of OLED TVs would increase. 
C)  The price of streaming movies and the price of movie tickets would increase, but the price of OLED TVs would decrease. 
D)  The price of streaming movies would increase, but the price of OLED TVs and movie tickets would be unaffected.

Question 17

Assuming supply is a straight line and intersects the y axis, the equation of the inverse supply curve is represented as

Accepted Answer

A)  P + Qs = c + d. 
B)  P = c - dQs. 
C)  Q = c - bPs. 
D)  P = c + dQs. 
A)  P + Qs = c + d. 
B)  P = c - dQs. 
C)  Q = c - bPs. 
D)  P = c + dQs.

Question 18

Refer to the information provided in Figure 3.8 below to answer the following question(s).   Figure 3.8
-Refer to Figure 3.8. Assume there are only two people in the market for baseball caps: Alex and Ryan. Along the market demand curve for baseball caps, at a price of ________, quantity demanded would be ________.

Accepted Answer

A)  $10; 6 
B)  $10; 12 
C)  $8; 14 
D)  $8; 25 
A)  $10; 6 
B)  $10; 12 
C)  $8; 14 
D)  $8; 25

Question 19

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. In this market there will be an excess supply of 1,000 cheeseburgers at a price of

Accepted Answer

A)  $5. 
B)  $6. 
C)  $7. 
D)  $9. 
A)  $5. 
B)  $6. 
C)  $7. 
D)  $9.

Question 20

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 wage rate of gardenburger makers will cause a movement from Point B on supply curve S2 to

Accepted Answer

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

A movement along the demand curve to the right may be caused by a(n)

An entrepreneur is a person who

An insect that is resistant to currently used pesticides has infested the cotton crop, and this year's crop is only half of what was produced last year. You accurately predict that this

An increase in the wage rate of diamond cutters will increase the supply of cut diamonds.

The consuming units in an economy are known as

Inferior goods are also known as substitute goods.

An increase in demand for laptop computers would likely be caused by

Refer to the information provided in Figure 3.19 below to answer the question(s) that follow. Figure 3.19 -Refer to Figure 3.19. The market is initially in equilibrium at Point B. If supply shifts from S₂ to S₁, the new equilibrium price will be and the new equilibrium quantity will be .

In an output market

An increase in the price of a good or service leads to a(n) that leads to a(n) .

Refer to the information provided in Figure 3.17 below to answer the question(s) that follow. Figure 3.17 -Refer to Figure 3.17. If the current quantity demanded of rollerblades is 150 per week, you accurately predict that in this market

Refer to the information provided in Figure 3.8 below to answer the following question(s). Figure 3.8 -Refer to Figure 3.8. Assume there are only two people in the market for baseball caps: Alex and Ryan. Along the ________, at a price of $8, quantity demanded would be 7.

Most firms exist to make a profit.

Refer to the information provided in Figure 3.7 below to answer the following question(s). Figure 3.7 -Refer to Figure 3.7. If pizza and beer are complementary goods, an increase in the price of beer will cause a movement from Point B on demand curve D₂ to

Assuming supply is a straight line and intersects the y axis, the equation of the inverse supply curve is represented as

Refer to the information provided in Figure 3.8 below to answer the following question(s). Figure 3.8 -Refer to Figure 3.8. Assume there are only two people in the market for baseball caps: Alex and Ryan. Along the market demand curve for baseball caps, at a price of , quantity demanded would be .

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 wage rate of gardenburger makers will cause a movement from Point B on supply curve S₂ to

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

A movement along the demand curve to the right may be caused by a(n)

An entrepreneur is a person who

An insect that is resistant to currently used pesticides has infested the cotton crop, and this year's crop is only half of what was produced last year. You accurately predict that this

An increase in the wage rate of diamond cutters will increase the supply of cut diamonds.

The consuming units in an economy are known as

Inferior goods are also known as substitute goods.

An increase in demand for laptop computers would likely be caused by

In an output market

An increase in the price of a good or service leads to a(n) ________ that leads to a(n) ________.

Refer to the information provided in Figure 3.17 below to answer the question(s) that follow. Figure 3.17 -Refer to Figure 3.17. If the current quantity demanded of rollerblades is 150 per week, you accurately predict that in this market

Refer to the information provided in Figure 3.8 below to answer the following question(s). Figure 3.8 -Refer to Figure 3.8. Assume there are only two people in the market for baseball caps: Alex and Ryan. Along the ________, at a price of $8, quantity demanded would be 7.

Most firms exist to make a profit.

Refer to the information provided in Figure 3.7 below to answer the following question(s). Figure 3.7 -Refer to Figure 3.7. If pizza and beer are complementary goods, an increase in the price of beer will cause a movement from Point B on demand curve D2 to

Assuming supply is a straight line and intersects the y axis, the equation of the inverse supply curve is represented as

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 wage rate of gardenburger makers will cause a movement from Point B on supply curve S2 to

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

An increase in the price of a good or service leads to a(n) that leads to a(n) .

Refer to the information provided in Figure 3.7 below to answer the following question(s). Figure 3.7 -Refer to Figure 3.7. If pizza and beer are complementary goods, an increase in the price of beer will cause a movement from Point B on demand curve D₂ 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 decrease in the wage rate of gardenburger makers will cause a movement from Point B on supply curve S₂ to