Question 1

Figure 4.4 shows the supply curve for a good.According to the figure given below,which of these will result when price increases from P to P'?

Accepted Answer

A) Quantity supplied will increase. 
B) Supply will become elastic. 
C) Supply will increase. 
D) Supply will become inelastic. 
E) Supply will decrease. 
A) Quantity supplied will increase. 
B) Supply will become elastic. 
C) Supply will increase. 
D) Supply will become inelastic. 
E) Supply will decrease.

Question 2

A supply curve typically slopes upward because:

Accepted Answer

A) opportunity cost of production increases as quantity supplied increases. 
B) price and quantity supplied are inversely related. 
C) quantity supplied is positively related to consumer income. 
D) the substitution effect of a price change on quantity supplied is generally positive. 
E) the income effect of a price change on quantity supplied is generally negative. 
A) opportunity cost of production increases as quantity supplied increases. 
B) price and quantity supplied are inversely related. 
C) quantity supplied is positively related to consumer income. 
D) the substitution effect of a price change on quantity supplied is generally positive. 
E) the income effect of a price change on quantity supplied is generally negative.

Question 3

Tickets to the Michigan-Notre Dame football game are usually sold out in advance of game day.This suggests that:

Accepted Answer

A) the price of the tickets is set by the football teams. 
B) the price of the tickets is set below the equilibrium level. 
C) the football stadium is relatively small. 
D) the demand for the tickets is highly price elastic. 
E) the price of the tickets is set above the equilibrium level. 
A) the price of the tickets is set by the football teams. 
B) the price of the tickets is set below the equilibrium level. 
C) the football stadium is relatively small. 
D) the demand for the tickets is highly price elastic. 
E) the price of the tickets is set above the equilibrium level.

Question 4

In the figure given below that shows the demand for baby formula,if baby formula is an inferior good,then an increase in consumer income is likely to cause which of the following changes?
​

Accepted Answer

A) A shift in the demand curve from D1 to D2 
B) A movement along the demand curve D1 from point a to point b 
C) A shift in the demand curve from D2 to D1 
D) A movement along the demand curve D2 from point d to point c 
E) A movement from point b on the demand curve D1 to point c on the demand curve D2 
A) A shift in the demand curve from D1 to D2 
B) A movement along the demand curve D1 from point a to point b 
C) A shift in the demand curve from D2 to D1 
D) A movement along the demand curve D2 from point d to point c 
E) A movement from point b on the demand curve D1 to point c on the demand curve D2

Question 5

Which of the following will cause the demand curve for gasoline to shift leftward?

Accepted Answer

A) A decrease in the price of gasoline 
B) An increase in the price of gasoline 
C) A leftward shift of the supply of gasoline 
D) A rightward shift of the supply of cars 
E) An increase in the price of cars 
A) A decrease in the price of gasoline 
B) An increase in the price of gasoline 
C) A leftward shift of the supply of gasoline 
D) A rightward shift of the supply of cars 
E) An increase in the price of cars

Question 6

Which of these is likely to decrease the supply of leather jackets?​

Accepted Answer

A) An increase in the price of leather jackets 
B) An increase in the price of leather 
C) A decrease in the price of zippers 
D) An increase in the demand for leather jackets 
E) A decrease in consumer income 
A) An increase in the price of leather jackets 
B) An increase in the price of leather 
C) A decrease in the price of zippers 
D) An increase in the demand for leather jackets 
E) A decrease in consumer income

Question 7

For which of the following goods or services is the income effect of a price change likely to be the greatest?

Accepted Answer

A) Vitamin capsules 
B) Gasoline 
C) Laundry 
D) Chocolates 
E) College textbooks 
A) Vitamin capsules 
B) Gasoline 
C) Laundry 
D) Chocolates 
E) College textbooks

Question 8

Classified ads and job web sites reduce the transaction costs of finding a new job.

Accepted Answer

A) True 
 B)False

Question 9

If the price of potato chips increases,other things constant,demand for potato chip dip will:

Accepted Answer

A) decrease because potato chip is an inferior good. 
B) increase because the goods are substitutes. 
C) decrease because the goods are substitutes. 
D) decrease because the goods are complements. 
E) increase because the goods are complements. 
A) decrease because potato chip is an inferior good. 
B) increase because the goods are substitutes. 
C) decrease because the goods are substitutes. 
D) decrease because the goods are complements. 
E) increase because the goods are complements.

Question 10

If demand decreases and supply increases in a market that is initially in equilibrium,

Accepted Answer

A) price will remain unchanged. 
B) price will always decrease. 
C) price will always increase. 
D) quantity will always decrease. 
E) quantity will remain unchanged. 
A) price will remain unchanged. 
B) price will always decrease. 
C) price will always increase. 
D) quantity will always decrease. 
E) quantity will remain unchanged.

Question 11

If Good B is a complement to Good A,then a decrease in the price of Good B:

Accepted Answer

A) increases the quantity demanded of Good A. 
B) decreases the demand for Good A. 
C) increases the demand for Good A. 
D) decreases the quantity demanded of Good A. 
E) will cause the demand for Good B to increase. 
A) increases the quantity demanded of Good A. 
B) decreases the demand for Good A. 
C) increases the demand for Good A. 
D) decreases the quantity demanded of Good A. 
E) will cause the demand for Good B to increase.

Question 12

Which of the following is likely to shift the demand curve for a normal good to the right?

Accepted Answer

A) A decrease in income,if the good is a normal good 
B) An increase in the price of a complementary good 
C) A decrease in the good's price,if the good is normal 
D) An increase in the good's price,if the good is inferior 
E) An expectation of a shortage in the future 
A) A decrease in income,if the good is a normal good 
B) An increase in the price of a complementary good 
C) A decrease in the good's price,if the good is normal 
D) An increase in the good's price,if the good is inferior 
E) An expectation of a shortage in the future

Question 13

Which of these is most likely to cause a leftward shift of the demand curve for a normal good?

Accepted Answer

A) An increase in the price of the good 
B) A decrease in the price of the good 
C) A decrease in the price of a complementary good 
D) An expectation of a future price decline 
E) An increase in the price of a substitute good 
A) An increase in the price of the good 
B) A decrease in the price of the good 
C) A decrease in the price of a complementary good 
D) An expectation of a future price decline 
E) An increase in the price of a substitute good

Question 14

Markets reduce transactions costs:

Accepted Answer

A) by decreasing the time spent searching for information about goods and services. 
B) only when they have a highly structured set of rules like the New York Stock Exchange. 
C) because each market uses the same set of rules for buying and selling goods and services. 
D) only when the government coordinates the plans of many buyers and sellers. 
E) when prices are set by the sellers and are not determined by negotiation between the buyers and the sellers. 
A) by decreasing the time spent searching for information about goods and services. 
B) only when they have a highly structured set of rules like the New York Stock Exchange. 
C) because each market uses the same set of rules for buying and selling goods and services. 
D) only when the government coordinates the plans of many buyers and sellers. 
E) when prices are set by the sellers and are not determined by negotiation between the buyers and the sellers.

Question 15

If supply decreases along a given demand curve,______.

Accepted Answer

A) there will be an excess quantity demanded in the market,resulting in an increase in the equilibrium price and a decrease in the equilibrium quantity 
B) there will be an excess quantity supplied in the market,resulting in a decrease in the equilibrium price and an increase in the equilibrium quantity 
C) there will be an excess quantity demanded in the market,resulting in an increase in both the equilibrium price and quantity 
D) there will be an excess quantity supplied in the market,resulting in a decrease in both the equilibrium price and quantity 
E) price will fall,shifting the demand curve outward and raising the equilibrium quantity 
A) there will be an excess quantity demanded in the market,resulting in an increase in the equilibrium price and a decrease in the equilibrium quantity 
B) there will be an excess quantity supplied in the market,resulting in a decrease in the equilibrium price and an increase in the equilibrium quantity 
C) there will be an excess quantity demanded in the market,resulting in an increase in both the equilibrium price and quantity 
D) there will be an excess quantity supplied in the market,resulting in a decrease in both the equilibrium price and quantity 
E) price will fall,shifting the demand curve outward and raising the equilibrium quantity

Question 16

The income effect of a decrease in the price of legal services,a normal good,is a(n):

Accepted Answer

A) decrease in the demand for legal services. 
B) decrease in the quantity demanded of legal services. 
C) increase in the quantity supplied of lawyers. 
D) increase in the quantity demanded of legal services. 
E) increase in the supply of lawyers. 
A) decrease in the demand for legal services. 
B) decrease in the quantity demanded of legal services. 
C) increase in the quantity supplied of lawyers. 
D) increase in the quantity demanded of legal services. 
E) increase in the supply of lawyers.

Question 17

For a downward-sloping demand curve,a rightward shift of a supply curve:

Accepted Answer

A) has no impact on the equilibrium price and quantity. 
B) decreases both price and equilibrium quantity. 
C) increases both price and equilibrium quantity. 
D) decreases equilibrium price and increases equilibrium quantity. 
E) increases equilibrium price and decreases equilibrium quantity. 
A) has no impact on the equilibrium price and quantity. 
B) decreases both price and equilibrium quantity. 
C) increases both price and equilibrium quantity. 
D) decreases equilibrium price and increases equilibrium quantity. 
E) increases equilibrium price and decreases equilibrium quantity.

Question 18

When both supply and demand for a good increases,the change in equilibrium quantity is indeterminate.

Accepted Answer

A) True 
 B)False

Question 19

The law of demand states that as the price of a good rises,_____.

Accepted Answer

A) buyers purchase more of the good,because they expect prices to be even higher in the future 
B) buyers purchase less of the good,because they expect prices to fall in the future 
C) buyers purchase less of the good,because their real income decreases with an increase in price 
D) buyers purchase more of the good,because the price of a substitute has risen 
E) buyers purchase more of the good,because the higher price reflects an improvement in product quality 
A) buyers purchase more of the good,because they expect prices to be even higher in the future 
B) buyers purchase less of the good,because they expect prices to fall in the future 
C) buyers purchase less of the good,because their real income decreases with an increase in price 
D) buyers purchase more of the good,because the price of a substitute has risen 
E) buyers purchase more of the good,because the higher price reflects an improvement in product quality

Question 20

Consider a market for cookies that is initially in equilibrium.For a given upward-sloping supply curve,the equilibrium price and equilibrium quantity of cookies is most likely to decline when:

Accepted Answer

A) the price of milk,a complement,increases. 
B) consumer income increases. 
C) the number of consumers increases. 
D) the price of coffee,a complement,decreases. 
E) price of crackers,a substitute,increases. 
A) the price of milk,a complement,increases. 
B) consumer income increases. 
C) the number of consumers increases. 
D) the price of coffee,a complement,decreases. 
E) price of crackers,a substitute,increases.

Figure 4.4 shows the supply curve for a good.According to the figure given below,which of these will result when price increases from P to P'?

A supply curve typically slopes upward because:

Tickets to the Michigan-Notre Dame football game are usually sold out in advance of game day.This suggests that:

In the figure given below that shows the demand for baby formula,if baby formula is an inferior good,then an increase in consumer income is likely to cause which of the following changes?

Which of the following will cause the demand curve for gasoline to shift leftward?

Which of these is likely to decrease the supply of leather jackets?

For which of the following goods or services is the income effect of a price change likely to be the greatest?

Classified ads and job web sites reduce the transaction costs of finding a new job.

If the price of potato chips increases,other things constant,demand for potato chip dip will:

If demand decreases and supply increases in a market that is initially in equilibrium,

If Good B is a complement to Good A,then a decrease in the price of Good B:

Which of the following is likely to shift the demand curve for a normal good to the right?

Which of these is most likely to cause a leftward shift of the demand curve for a normal good?

Markets reduce transactions costs:

If supply decreases along a given demand curve,______.

The income effect of a decrease in the price of legal services,a normal good,is a(n):

For a downward-sloping demand curve,a rightward shift of a supply curve:

When both supply and demand for a good increases,the change in equilibrium quantity is indeterminate.

The law of demand states that as the price of a good rises,_____.

Consider a market for cookies that is initially in equilibrium.For a given upward-sloping supply curve,the equilibrium price and equilibrium quantity of cookies is most likely to decline when:

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

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Exam 4: Demand, Supply, and Markets

Figure 4.4 shows the supply curve for a good.According to the figure given below,which of these will result when price increases from P to P'?

A supply curve typically slopes upward because:

Tickets to the Michigan-Notre Dame football game are usually sold out in advance of game day.This suggests that:

In the figure given below that shows the demand for baby formula,if baby formula is an inferior good,then an increase in consumer income is likely to cause which of the following changes? ​

Which of the following will cause the demand curve for gasoline to shift leftward?

Which of these is likely to decrease the supply of leather jackets?​

For which of the following goods or services is the income effect of a price change likely to be the greatest?

Classified ads and job web sites reduce the transaction costs of finding a new job.

If the price of potato chips increases,other things constant,demand for potato chip dip will:

If demand decreases and supply increases in a market that is initially in equilibrium,

If Good B is a complement to Good A,then a decrease in the price of Good B:

Which of the following is likely to shift the demand curve for a normal good to the right?

Which of these is most likely to cause a leftward shift of the demand curve for a normal good?

Markets reduce transactions costs:

If supply decreases along a given demand curve,______.

The income effect of a decrease in the price of legal services,a normal good,is a(n):

For a downward-sloping demand curve,a rightward shift of a supply curve:

When both supply and demand for a good increases,the change in equilibrium quantity is indeterminate.

The law of demand states that as the price of a good rises,_____.

Consider a market for cookies that is initially in equilibrium.For a given upward-sloping supply curve,the equilibrium price and equilibrium quantity of cookies is most likely to decline when:

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

In the figure given below that shows the demand for baby formula,if baby formula is an inferior good,then an increase in consumer income is likely to cause which of the following changes?

Which of these is likely to decrease the supply of leather jackets?