Question 1

Which of the following is most likely to be an inferior good?

Accepted Answer

A) Airline travel 
B) Restaurant meals 
C) A subscription to the Wall Street Journal 
D) Soft drinks 
E) Used clothing 
A) Airline travel 
B) Restaurant meals 
C) A subscription to the Wall Street Journal 
D) Soft drinks 
E) Used clothing

Question 2

Consider the market for a good that is initially in equilibrium.Which of the following is most likely to happen if supply increases by a smaller amount than the increase in demand?

Accepted Answer

A) Equilibrium price will fall and equilibrium quantity will rise. 
B) Equilibrium price will rise and equilibrium quantity will fall. 
C) Both equilibrium price and equilibrium quantity will rise. 
D) Equilibrium price will rise but the change in equilibrium quantity is indeterminate. 
E) Both equilibrium price and equilibrium quantity will fall. 
A) Equilibrium price will fall and equilibrium quantity will rise. 
B) Equilibrium price will rise and equilibrium quantity will fall. 
C) Both equilibrium price and equilibrium quantity will rise. 
D) Equilibrium price will rise but the change in equilibrium quantity is indeterminate. 
E) Both equilibrium price and equilibrium quantity will fall.

Question 3

Which of the following statements about gold jewelry and round-trip bus tickets to Bismarck,North Dakota,is most likely to be correct?

Accepted Answer

A) They are both inferior goods. 
B) Their demand curves have equal slope. 
C) They are complements. 
D) They are substitutes. 
E) They are unrelated. 
A) They are both inferior goods. 
B) Their demand curves have equal slope. 
C) They are complements. 
D) They are substitutes. 
E) They are unrelated.

Question 4

A new cattle feed has been found to increase the amount of milk each cow produces.Which of these is a likely impact in the market for milk,if this cattle feed is used by most of the dairies?

Accepted Answer

A) A rightward shift of the supply curve for milk 
B) A leftward shift of the supply curve for milk 
C) An increase in the price of milk 
D) An increase in the demand for milk 
E) A decrease in the quantity demanded of milk 
A) A rightward shift of the supply curve for milk 
B) A leftward shift of the supply curve for milk 
C) An increase in the price of milk 
D) An increase in the demand for milk 
E) A decrease in the quantity demanded of milk

Question 5

Suppose a price floor for a good is set above the equilibrium price.At this price:

Accepted Answer

A) quantity supplied will be less than quantity demanded. 
B) quantity supplied will exceed quantity demanded. 
C) there will be a shortage of the good. 
D) more number of consumers will be willing and able to purchase the good. 
E) producers will suffer an economic loss. 
A) quantity supplied will be less than quantity demanded. 
B) quantity supplied will exceed quantity demanded. 
C) there will be a shortage of the good. 
D) more number of consumers will be willing and able to purchase the good. 
E) producers will suffer an economic loss.

Question 6

Which of the following is the best example of substitute goods?

Accepted Answer

A) Coffee and cream 
B) Videotapes and VCRs 
C) Money and biscuits 
D) Tortillas and salsa 
E) Powdered and liquid laundry detergent 
A) Coffee and cream 
B) Videotapes and VCRs 
C) Money and biscuits 
D) Tortillas and salsa 
E) Powdered and liquid laundry detergent

Question 7

For a renter,the income effect of an increase in apartment rents will:

Accepted Answer

A) have a greater impact than the income effect of an increase in the price of a chewing gum. 
B) be almost negligible,because everything except price is assumed constant along a demand curve. 
C) have less of an effect than the income effect of a decrease in the price of dairy products. 
D) be almost negligible,because housing is a necessity. 
E) have a greater impact than the positive substitution effect of this price change. 
A) have a greater impact than the income effect of an increase in the price of a chewing gum. 
B) be almost negligible,because everything except price is assumed constant along a demand curve. 
C) have less of an effect than the income effect of a decrease in the price of dairy products. 
D) be almost negligible,because housing is a necessity. 
E) have a greater impact than the positive substitution effect of this price change.

Question 8

Other things constant,the demand for a product is the amount that:

Accepted Answer

A) sellers are willing and able to sell at alternative prices. 
B) buyers purchase over different time periods. 
C) sellers are willing to sell at a particular price. 
D) buyers are willing and able to purchase at different prices. 
E) buyers are willing to consume at a constant price. 
A) sellers are willing and able to sell at alternative prices. 
B) buyers purchase over different time periods. 
C) sellers are willing to sell at a particular price. 
D) buyers are willing and able to purchase at different prices. 
E) buyers are willing to consume at a constant price.

Question 9

A price ceiling set above the equilibrium price of a good will result in a shortage.

Accepted Answer

A) True 
 B)False

Question 10

A decrease in the price of peanuts will cause a leftward shift in the supply curve of peanut butter.

Accepted Answer

A) True 
 B)False

Question 11

If the government imposes a ceiling price on apartment rents,we would expect to observe all of the following except one.Which of these is the exception?

Accepted Answer

A) An increase in the number of new apartment complexes being built 
B) Long waiting lists for apartment seekers 
C) Lower maintenance of existing apartments 
D) An increase in the rent for the apartments 
E) A shortage of rented apartments 
A) An increase in the number of new apartment complexes being built 
B) Long waiting lists for apartment seekers 
C) Lower maintenance of existing apartments 
D) An increase in the rent for the apartments 
E) A shortage of rented apartments

Question 12

Figure 4.5 shows the supply curves of a durable good.A shift from the supply curve S to S' could be caused by a(n):

Accepted Answer

A) decrease in consumer income. 
B) increase in the current price of the product. 
C) patent application that restricts the use of a particular production technology. 
D) several competing producers going out of business. 
E) expectation of a higher product price in the future among suppliers. 
A) decrease in consumer income. 
B) increase in the current price of the product. 
C) patent application that restricts the use of a particular production technology. 
D) several competing producers going out of business. 
E) expectation of a higher product price in the future among suppliers.

Question 13

If supply of a good increases while its demand decreases,then equilibrium price will fall.

Accepted Answer

A) True 
 B)False

Question 14

Suppose a market is in equilibrium.An increase in demand in this market will lead to a(n):

Accepted Answer

A) increase in supply. 
B) decrease in supply. 
C) decrease in quantity supplied. 
D) increase in quantity supplied. 
E) decrease in equilibrium price. 
A) increase in supply. 
B) decrease in supply. 
C) decrease in quantity supplied. 
D) increase in quantity supplied. 
E) decrease in equilibrium price.

Question 15

Which of the following is most likely to shift the supply curve for a product to the right?

Accepted Answer

A) An increase in the price of a resource used in the good's production 
B) The expectation of a higher price in the near future 
C) An increase in the price of the product 
D) A decrease in the price of an alternative good 
E) An improvement in the technology for producing the good 
A) An increase in the price of a resource used in the good's production 
B) The expectation of a higher price in the near future 
C) An increase in the price of the product 
D) A decrease in the price of an alternative good 
E) An improvement in the technology for producing the good

Question 16

Which of the following is likely to bring about a movement along the supply curve for oranges?

Accepted Answer

A) A change in weather conditions 
B) A change in the price of fertilizer 
C) A change in wages paid to orange pickers 
D) A change in the price of oranges 
E) A change in the demand for grapefruit 
A) A change in weather conditions 
B) A change in the price of fertilizer 
C) A change in wages paid to orange pickers 
D) A change in the price of oranges 
E) A change in the demand for grapefruit

Question 17

Which of these is likely to increase the supply of vanilla ice cream?

Accepted Answer

A) An increase in the price of vanilla beans,an ingredient in ice cream 
B) A decrease in the sales tax on ice cream 
C) An increase in the price of chocolate ice cream 
D) A decrease in the price of milk,an ingredient in ice cream 
E) An increase in the price of hot fudge 
A) An increase in the price of vanilla beans,an ingredient in ice cream 
B) A decrease in the sales tax on ice cream 
C) An increase in the price of chocolate ice cream 
D) A decrease in the price of milk,an ingredient in ice cream 
E) An increase in the price of hot fudge

Question 18

If demand increases and supply decreases in a market that is in equilibrium,quantity will:

Accepted Answer

A) increase while price will remain unchanged. 
B) remain unchanged while price will decrease. 
C) increase only if decrease in supply is more than increase in demand. 
D) increase only if decrease in supply is less than increase in demand. 
E) increase only if decrease in supply is more than decrease in demand. 
A) increase while price will remain unchanged. 
B) remain unchanged while price will decrease. 
C) increase only if decrease in supply is more than increase in demand. 
D) increase only if decrease in supply is less than increase in demand. 
E) increase only if decrease in supply is more than decrease in demand.

Question 19

Suppose you drink more tea because the price of coffee has increased.Which of the following best explains your action?

Accepted Answer

A) Positive relation between money income and demand 
B) Inverse relation between price and quantity supplied 
C) Substitution effect of a price change 
D) Income effect of a price change 
E) Positive relation between price and quantity demanded 
A) Positive relation between money income and demand 
B) Inverse relation between price and quantity supplied 
C) Substitution effect of a price change 
D) Income effect of a price change 
E) Positive relation between price and quantity demanded

Question 20

The slope of the demand curve for a normal good must be positive.

Accepted Answer

A) True 
 B)False

Which of the following is most likely to be an inferior good?

Consider the market for a good that is initially in equilibrium.Which of the following is most likely to happen if supply increases by a smaller amount than the increase in demand?

Which of the following statements about gold jewelry and round-trip bus tickets to Bismarck,North Dakota,is most likely to be correct?

A new cattle feed has been found to increase the amount of milk each cow produces.Which of these is a likely impact in the market for milk,if this cattle feed is used by most of the dairies?

Suppose a price floor for a good is set above the equilibrium price.At this price:

Which of the following is the best example of substitute goods?

For a renter,the income effect of an increase in apartment rents will:

Other things constant,the demand for a product is the amount that:

A price ceiling set above the equilibrium price of a good will result in a shortage.

A decrease in the price of peanuts will cause a leftward shift in the supply curve of peanut butter.

If the government imposes a ceiling price on apartment rents,we would expect to observe all of the following except one.Which of these is the exception?

Figure 4.5 shows the supply curves of a durable good.A shift from the supply curve S to S' could be caused by a(n):

If supply of a good increases while its demand decreases,then equilibrium price will fall.

Suppose a market is in equilibrium.An increase in demand in this market will lead to a(n):

Which of the following is most likely to shift the supply curve for a product to the right?

Which of the following is likely to bring about a movement along the supply curve for oranges?

Which of these is likely to increase the supply of vanilla ice cream?

If demand increases and supply decreases in a market that is in equilibrium,quantity will:

Suppose you drink more tea because the price of coffee has increased.Which of the following best explains your action?

The slope of the demand curve for a normal good must be positive.

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Exam 4: Demand, Supply, and Markets

Which of the following is most likely to be an inferior good?

Consider the market for a good that is initially in equilibrium.Which of the following is most likely to happen if supply increases by a smaller amount than the increase in demand?

Which of the following statements about gold jewelry and round-trip bus tickets to Bismarck,North Dakota,is most likely to be correct?

A new cattle feed has been found to increase the amount of milk each cow produces.Which of these is a likely impact in the market for milk,if this cattle feed is used by most of the dairies?

Suppose a price floor for a good is set above the equilibrium price.At this price:

Which of the following is the best example of substitute goods?

For a renter,the income effect of an increase in apartment rents will:

Other things constant,the demand for a product is the amount that:

A price ceiling set above the equilibrium price of a good will result in a shortage.

A decrease in the price of peanuts will cause a leftward shift in the supply curve of peanut butter.

If the government imposes a ceiling price on apartment rents,we would expect to observe all of the following except one.Which of these is the exception?

Figure 4.5 shows the supply curves of a durable good.A shift from the supply curve S to S' could be caused by a(n):

If supply of a good increases while its demand decreases,then equilibrium price will fall.

Suppose a market is in equilibrium.An increase in demand in this market will lead to a(n):

Which of the following is most likely to shift the supply curve for a product to the right?

Which of the following is likely to bring about a movement along the supply curve for oranges?

Which of these is likely to increase the supply of vanilla ice cream?

If demand increases and supply decreases in a market that is in equilibrium,quantity will:

Suppose you drink more tea because the price of coffee has increased.Which of the following best explains your action?

The slope of the demand curve for a normal good must be positive.

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters