Question 1

Firms are the producing units of the economy.

Accepted Answer

A) True 
 B)False

Question 2

If price is above the equilibrium, there will be excess supply of the product.

Accepted Answer

A) True 
 B)False

Question 3

Related to the Economics in Practice on page 68: One explanation for the increase in the price of the Baltimore newspaper is the increase in the cost of newsprint. This would cause the ________ of Baltimore newspapers to ________.

Accepted Answer

A)  supply; increase 
B)  quantity supplied; increase 
C)  supply; decrease 
D)  quantity supplied; decrease 
A)  supply; increase 
B)  quantity supplied; increase 
C)  supply; decrease 
D)  quantity supplied; decrease

Question 4

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. As a result of the recall, you would expect that

Accepted Answer

A)  the supply of mustard would decrease, the price of mustard would increase, and the demand for mustard would decrease. 
B)  the price of mustard would increase, the supply of mustard would increase, and the quantity demanded of mustard would decrease. 
C)  the supply of mustard would decrease, the price of mustard would increase, and the quantity demanded of mustard would decrease. 
D)  the price of mustard would increase and both the quantity of mustard supplied and the quantity of mustard demanded would increase. 
A)  the supply of mustard would decrease, the price of mustard would increase, and the demand for mustard would decrease. 
B)  the price of mustard would increase, the supply of mustard would increase, and the quantity demanded of mustard would decrease. 
C)  the supply of mustard would decrease, the price of mustard would increase, and the quantity demanded of mustard would decrease. 
D)  the price of mustard would increase and both the quantity of mustard supplied and the quantity of mustard demanded would increase.

Question 5

Refer to the information provided in Figure 3.2 below to answer the question(s) that follow.   Figure 3.2
-Refer to Figure 3.2. Which of the following would be most likely to cause the demand for macaroni and cheese to shift from D0 to D1?

Accepted Answer

A)  a decrease in the price of macaroni and cheese 
B)  an increase in the price of flour used to make macaroni and cheese 
C)  a decrease in income, assuming macaroni and cheese is a normal good 
D)  an increase in the quantity demanded for macaroni and cheese 
A)  a decrease in the price of macaroni and cheese 
B)  an increase in the price of flour used to make macaroni and cheese 
C)  a decrease in income, assuming macaroni and cheese is a normal good 
D)  an increase in the quantity demanded for macaroni and cheese

Question 6

Refer to the information provided in Figure 3.14 below to answer the question(s) that follow.   Figure 3.14
-Refer to Figure 3.14. The market for sunglasses ________ at a price of $60 and a quantity of 450 sunglasses.

Accepted Answer

A)  has a surplus 
B)  has a shortage 
C)  is in equilibrium 
D)  cannot remain in business 
A)  has a surplus 
B)  has a shortage 
C)  is in equilibrium 
D)  cannot remain in business

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. An increase in quantity supplied is represented by a movement from

Accepted Answer

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

Question 8

Refer to the information provided in Figure 3.14 below to answer the question(s) that follow.   Figure 3.14
-Refer to Figure 3.14. If this market is unregulated and the price is currently $90, you would expect that the price of sunglasses would

Accepted Answer

A)  remain at $90, because firms would not want to reduce the price. 
B)  fall to $30, so firms could sell their excess supply. 
C)  fall to $60, where quantity demanded equals quantity supplied. 
D)  fall, but the new price is indeterminate from the information provided. 
A)  remain at $90, because firms would not want to reduce the price. 
B)  fall to $30, so firms could sell their excess supply. 
C)  fall to $60, where quantity demanded equals quantity supplied. 
D)  fall, but the new price is indeterminate from the information provided.

Question 9

When the increase in the price of one good causes the demand for another good to decrease, the goods are

Accepted Answer

A)  normal. 
B)  inferior. 
C)  substitutes. 
D)  complements. 
A)  normal. 
B)  inferior. 
C)  substitutes. 
D)  complements.

Question 10

Refer to the information provided in Table 3.1 below to answer the question(s) that follow.
Table 3.1
 $$\begin{array} { | c | c | c | } 
\hline \text { Price per Pizza } & \begin{array} { c } 
\text { Quantity Demanded } \
\text { (Pizzas per Month) }
\end{array} & \begin{array} { c } 
\text { Quantity Supplied } \
\text { (Pizzas per Month) }
\end{array} \
\hline \$ 3 & 1,200 & 600 \
\hline 6 & 1,000 & 700 \
\hline 9 & 800 & 800 \
\hline 12 & 600 & 900 \
\hline 15 & 400 & 1,000 \
\hline
\end{array}$$
-Refer to Table 3.1. In this market there will be an excess supply of 600 pizzas at a price of

Accepted Answer

A)  $3. 
B)  $6. 
C)  $12. 
D)  $15. 
A)  $3. 
B)  $6. 
C)  $12. 
D)  $15.

Question 11

The quantity demanded of Coca Cola has increased. The best explanation for this is that

Accepted Answer

A)  the price of Pepsi has decreased. 
B)  Coca Cola has instituted a new, successful advertising campaign. 
C)  the price of Coca Cola has decreased. 
D)  Coca Cola consumers had an increase in income. 
A)  the price of Pepsi has decreased. 
B)  Coca Cola has instituted a new, successful advertising campaign. 
C)  the price of Coca Cola has decreased. 
D)  Coca Cola consumers had an increase in income.

Question 12

If the demand for coffee decreases as income decreases, coffee is a(n)

Accepted Answer

A)  normal good. 
B)  inferior good. 
C)  substitute good. 
D)  complementary good. 
A)  normal good. 
B)  inferior good. 
C)  substitute good. 
D)  complementary good.

Question 13

Suppose that video game discs are a normal good. If the income of video game players increases, you predict that in the market for video games,

Accepted Answer

A)  both equilibrium price and quantity will fall. 
B)  both equilibrium price and quantity will increase. 
C)  equilibrium price will increase, and quantity will decrease. 
D)  equilibrium price will fall, but quantity will increase. 
A)  both equilibrium price and quantity will fall. 
B)  both equilibrium price and quantity will increase. 
C)  equilibrium price will increase, and quantity will decrease. 
D)  equilibrium price will fall, but quantity will increase.

Question 14

Refer to the information provided in Table 3.1 below to answer the question(s) that follow.
Table 3.1
 $$\begin{array} { | c | c | c | } 
\hline \text { Price per Pizza } & \begin{array} { c } 
\text { Quantity Demanded } \
\text { (Pizzas per Month) }
\end{array} & \begin{array} { c } 
\text { Quantity Supplied } \
\text { (Pizzas per Month) }
\end{array} \
\hline \$ 3 & 1,200 & 600 \
\hline 6 & 1,000 & 700 \
\hline 9 & 800 & 800 \
\hline 12 & 600 & 900 \
\hline 15 & 400 & 1,000 \
\hline
\end{array}$$
-Refer to Table 3.1. If the price per pizza is greater than $15, there would most likely be a(n)

Accepted Answer

A)  excess supply of more than 600 units. 
B)  quantity supplied of less than 1,000 units. 
C)  excess demand of less than 400 units. 
D)  quantity demanded of more than 400 units. 
A)  excess supply of more than 600 units. 
B)  quantity supplied of less than 1,000 units. 
C)  excess demand of less than 400 units. 
D)  quantity demanded of more than 400 units.

Question 15

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. Assume hamburgers and hot dogs are substitutes. An increase in the price of hot dogs will cause a movement from

Accepted Answer

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

Question 16

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. Assume hamburgers and french fries are complements. A decrease in the price of french fries will cause a movement from

Accepted Answer

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

Question 17

Suppose the demand for lawnmowers goes down when the price of gasoline goes up. We can say that these two goods are

Accepted Answer

A)  complements. 
B)  substitutes. 
C)  unrelated goods. 
D)  perfect substitutes. 
A)  complements. 
B)  substitutes. 
C)  unrelated goods. 
D)  perfect substitutes.

Question 18

Which of the following will definitely occur when there is a decrease in demand for and an increase in supply of potato chips?

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 19

Refer to the information provided in Figure 3.7 below to answer the following question(s).   Figure 3.7
-Refer to Figure 3.7. A decrease in quantity demanded is represented by the movement

Accepted Answer

A)  from D2 to D1. 
B)  from D2 to D3. 
C)  along D2 from Point B to Point A. 
D)  along D2 from Point B to Point C. 
A)  from D2 to D1. 
B)  from D2 to D3. 
C)  along D2 from Point B to Point A. 
D)  along D2 from Point B to Point C.

Question 20

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 burritos are substitutes, a decrease in the price of burritos 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.

Firms are the producing units of the economy.

If price is above the equilibrium, there will be excess supply of the product.

Related to the Economics in Practice on page 68: One explanation for the increase in the price of the Baltimore newspaper is the increase in the cost of newsprint. This would cause the of Baltimore newspapers to .

Refer to the information provided in Figure 3.2 below to answer the question(s) that follow. Figure 3.2 -Refer to Figure 3.2. Which of the following would be most likely to cause the demand for macaroni and cheese to shift from D₀toD₁?

Refer to the information provided in Figure 3.14 below to answer the question(s) that follow. Figure 3.14 -Refer to Figure 3.14. The market for sunglasses ________ at a price of $60 and a quantity of 450 sunglasses.

Refer to the information provided in Figure 3.11 below to answer the following question(s). Figure 3.11 -Refer to Figure 3.11. An increase in quantity supplied is represented by a movement from

Refer to the information provided in Figure 3.14 below to answer the question(s) that follow. Figure 3.14 -Refer to Figure 3.14. If this market is unregulated and the price is currently $90, you would expect that the price of sunglasses would

When the increase in the price of one good causes the demand for another good to decrease, the goods are

The quantity demanded of Coca Cola has increased. The best explanation for this is that

If the demand for coffee decreases as income decreases, coffee is a(n)

Suppose that video game discs are a normal good. If the income of video game players increases, you predict that in the market for video games,

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. Assume hamburgers and hot dogs are substitutes. An increase in the price of hot dogs will cause a movement from

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. Assume hamburgers and french fries are complements. A decrease in the price of french fries will cause a movement from

Suppose the demand for lawnmowers goes down when the price of gasoline goes up. We can say that these two goods are

Which of the following will definitely occur when there is a decrease in demand for and an increase in supply of potato chips?

Refer to the information provided in Figure 3.7 below to answer the following question(s). Figure 3.7 -Refer to Figure 3.7. A decrease in quantity demanded is represented by the movement

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 burritos are substitutes, a decrease in the price of burritos will cause a movement from Point B on demand curve D₂ 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

Firms are the producing units of the economy.

If price is above the equilibrium, there will be excess supply of the product.

Related to the Economics in Practice on page 68: One explanation for the increase in the price of the Baltimore newspaper is the increase in the cost of newsprint. This would cause the ________ of Baltimore newspapers to ________.

Refer to the information provided in Figure 3.2 below to answer the question(s) that follow. Figure 3.2 -Refer to Figure 3.2. Which of the following would be most likely to cause the demand for macaroni and cheese to shift from D0 to D1?

Refer to the information provided in Figure 3.14 below to answer the question(s) that follow. Figure 3.14 -Refer to Figure 3.14. The market for sunglasses ________ at a price of $60 and a quantity of 450 sunglasses.

Refer to the information provided in Figure 3.11 below to answer the following question(s). Figure 3.11 -Refer to Figure 3.11. An increase in quantity supplied is represented by a movement from

Refer to the information provided in Figure 3.14 below to answer the question(s) that follow. Figure 3.14 -Refer to Figure 3.14. If this market is unregulated and the price is currently $90, you would expect that the price of sunglasses would

When the increase in the price of one good causes the demand for another good to decrease, the goods are

The quantity demanded of Coca Cola has increased. The best explanation for this is that

If the demand for coffee decreases as income decreases, coffee is a(n)

Suppose that video game discs are a normal good. If the income of video game players increases, you predict that in the market for video games,

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. Assume hamburgers and hot dogs are substitutes. An increase in the price of hot dogs will cause a movement from

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. Assume hamburgers and french fries are complements. A decrease in the price of french fries will cause a movement from

Suppose the demand for lawnmowers goes down when the price of gasoline goes up. We can say that these two goods are

Which of the following will definitely occur when there is a decrease in demand for and an increase in supply of potato chips?

Refer to the information provided in Figure 3.7 below to answer the following question(s). Figure 3.7 -Refer to Figure 3.7. A decrease in quantity demanded is represented by the movement

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 burritos are substitutes, a decrease in the price of burritos will cause a movement from Point B on demand curve D2 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

Related to the Economics in Practice on page 68: One explanation for the increase in the price of the Baltimore newspaper is the increase in the cost of newsprint. This would cause the of Baltimore newspapers to .

Refer to the information provided in Figure 3.2 below to answer the question(s) that follow. Figure 3.2 -Refer to Figure 3.2. Which of the following would be most likely to cause the demand for macaroni and cheese to shift from D₀toD₁?

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 burritos are substitutes, a decrease in the price of burritos will cause a movement from Point B on demand curve D₂ to