Question 1

Over the past several years, consumers have had an increasing interest in getting tattoos. This means that the _____ for tattoos has _____.

Accepted Answer

A)  quantity demanded; increased 
B)  demand; decreased 
C)  demand; increased 
D)  quantity demanded; decreased 
A)  quantity demanded; increased 
B)  demand; decreased 
C)  demand; increased 
D)  quantity demanded; decreased

Question 2

French fries and hamburgers are complements in consumption. Suppose the cost of the ingredients used to make hamburgers rises, so that the price of a hamburger rises. Then the equilibrium relative price of french fries _____ and the equilibrium quantity _____.

Accepted Answer

A)  rises; increases 
B)  rises; decreases 
C)  falls; increases 
D)  falls; decreases 
A)  rises; increases 
B)  rises; decreases 
C)  falls; increases 
D)  falls; decreases

Question 3

Equilibrium quantity will always increase if:

Accepted Answer

A)  supply and demand both increase. 
B)  supply increases and demand decreases. 
C)  supply and demand both decrease. 
D)  supply decreases and demand remains unchanged. 
A)  supply and demand both increase. 
B)  supply increases and demand decreases. 
C)  supply and demand both decrease. 
D)  supply decreases and demand remains unchanged.

Question 4

Which of the following is NOT a determinant of supply?

Accepted Answer

A)  expectations regarding future prices 
B)  the technology of production 
C)  the cost of production 
D)  consumer tastes 
A)  expectations regarding future prices 
B)  the technology of production 
C)  the cost of production 
D)  consumer tastes

Question 5

If in a competitive market the quantity supplied exceeds the quantity demanded, we expect prices to:

Accepted Answer

A)  stay the same. 
B)  rise. 
C)  fall. 
D)  rise to clear the market. 
A)  stay the same. 
B)  rise. 
C)  fall. 
D)  rise to clear the market.

Question 6

Use the following to answer questions:
Figure: Shifts in Demand and Supply  
-(Figure: Shifts in Demand and Supply) Look at the figure Shifts in Demand and Supply. The figure shows how supply and demand might shift in response to specific events. Suppose the population increases. Which panel BEST describes how this will affect the market for apples?

Accepted Answer

A)  panel A 
B)  panel B 
C)  panel C 
D)  panel D 
A)  panel A 
B)  panel B 
C)  panel C 
D)  panel D

Question 7

In the following cases, explain what happens to demand or quantity demanded and how the change would be shown on a graph of the demand schedule.
I. Assuming that tickets to an NFL game are normal goods, what is the effect of an increase in the incomes of NFL fans?
II. Assuming that Direct TV and Dish satellite are substitutes, what happens if the price of a Direct TV subscription increases?
III. Assuming that data plans and cell phones are complements, what happens if the price of data plans decreases?

Accepted Answer

I. If the fans' incomes increase and tic

Question 8

Suppose oranges and clementines are considered to be substitutes. Holding everything else constant, if the price of oranges increases, then the demand for _____ will _____.

Accepted Answer

A)  clementines; increase 
B)  clementines; decrease 
C)  oranges; increase 
D)  oranges; decrease 
A)  clementines; increase 
B)  clementines; decrease 
C)  oranges; increase 
D)  oranges; decrease

Question 9

Which of the following will NOT cause an increase in the supply of good X?

Accepted Answer

A)  an improvement in the technology used to produce good X 
B)  a decrease in the price of good Y, a substitute in production 
C)  an increase in the price of inputs used to produce good X 
D)  a decrease in the price of inputs used to produce good X 
A)  an improvement in the technology used to produce good X 
B)  a decrease in the price of good Y, a substitute in production 
C)  an increase in the price of inputs used to produce good X 
D)  a decrease in the price of inputs used to produce good X

Question 10

Use the following to answer questions:  
-(Table: Competitive Market for Good Z) Look at the table Competitive Market for Good Z. The equilibrium price and quantity in this market are, respectively:

Accepted Answer

A)  $5 and 40 units. 
B)  $20 and 60 units. 
C)  $10 and 30 units. 
D)  $15 and 20 units. 
A)  $5 and 40 units. 
B)  $20 and 60 units. 
C)  $10 and 30 units. 
D)  $15 and 20 units.

Question 11

Which of the following describes two goods that are most likely substitutes in consumption?

Accepted Answer

A)  loaves of bread and sticks of butter 
B)  loaves of bread and toasters 
C)  loaves of bread and hamburger buns 
D)  loaves of bread and gasoline 
A)  loaves of bread and sticks of butter 
B)  loaves of bread and toasters 
C)  loaves of bread and hamburger buns 
D)  loaves of bread and gasoline

Question 12

Use the following to answer questions:  
-(Table: Supply of Lemonade) Look at the table Supply of Lemonade. If the price of lemonade is $1 per cup, the total quantity of lemonade supplied will be:

Accepted Answer

A)  50 cups. 
B)  80 cups. 
C)  25 cups. 
D)  90 cups. 
A)  50 cups. 
B)  80 cups. 
C)  25 cups. 
D)  90 cups.

Question 13

Over the past few years, the technology associated with producing flat-panel televisions has improved. This has led to a(n) _____ in the _____ flat-panel televisions.

Accepted Answer

A)  increase; supply of 
B)  decrease; demand for 
C)  decrease; supply of 
D)  decrease; quantity supplied of 
A)  increase; supply of 
B)  decrease; demand for 
C)  decrease; supply of 
D)  decrease; quantity supplied of

Question 14

Why are economists so particular about the difference between an increase in quantity demanded and an increase in demand? Aren't they the same thing?

Accepted Answer

No, they are not the same thing. Failure

Question 15

Suppose the supply curve for soap bubbles has a slope of +1 and intersects the vertical axis at a price of $2 per bottle. Interpret the meaning of both the y-intercept and the slope.

Accepted Answer

The y-intercept at $2 tells us that no s

Question 16

Use the following to answer questions:  
-(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market for Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.60, the price will:

Accepted Answer

A)  not change. 
B)  fall to $0.30. 
C)  fall to $0.50. 
D)  rise to $0.70. 
A)  not change. 
B)  fall to $0.30. 
C)  fall to $0.50. 
D)  rise to $0.70.

Question 17

An increase in supply with no change in demand will lead to _____ in equilibrium quantity and _____ in equilibrium price.

Accepted Answer

A)  an increase; an increase 
B)  an increase; a decrease 
C)  a decrease; an increase 
D)  a decrease; a decrease 
A)  an increase; an increase 
B)  an increase; a decrease 
C)  a decrease; an increase 
D)  a decrease; a decrease

Question 18

How would each of the following events affect the supply of compact cars?
I. The price of steel rises.
II. The production technology for car manufacturing improves.
III. The price of sport utility vehicles falls.

Accepted Answer

I. Steel is an important input in car pr

Question 19

Use the following to answer questions:
Figure: The Demand and Supply of Wheat  
-(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and Supply of Wheat. If there is a decrease in supply of 2,000 bushels at each price, the equilibrium price and quantity will be _____ and _____ bushels, respectively.

Accepted Answer

A)  $5; 5,000 
B)  $7; 5,000 
C)  $6; 4,000 
D)  $8; 6,000 
A)  $5; 5,000 
B)  $7; 5,000 
C)  $6; 4,000 
D)  $8; 6,000

Question 20

If chicken and beef are substitutes, then a fall in the price of chicken will bring about:

Accepted Answer

A)  an increase in the demand for beef. 
B)  a decrease in the demand for beef. 
C)  a decrease in the quantity demanded of beef. 
D)  no change in the demand for beef. 
A)  an increase in the demand for beef. 
B)  a decrease in the demand for beef. 
C)  a decrease in the quantity demanded of beef. 
D)  no change in the demand for beef.

Over the past several years, consumers have had an increasing interest in getting tattoos. This means that the _ for tattoos has _.

French fries and hamburgers are complements in consumption. Suppose the cost of the ingredients used to make hamburgers rises, so that the price of a hamburger rises. Then the equilibrium relative price of french fries _ and the equilibrium quantity _.

Equilibrium quantity will always increase if:

Which of the following is NOT a determinant of supply?

If in a competitive market the quantity supplied exceeds the quantity demanded, we expect prices to:

Suppose oranges and clementines are considered to be substitutes. Holding everything else constant, if the price of oranges increases, then the demand for _ will _.

Which of the following will NOT cause an increase in the supply of good X?

Use the following to answer questions: -(Table: Competitive Market for Good Z) Look at the table Competitive Market for Good Z. The equilibrium price and quantity in this market are, respectively:

Which of the following describes two goods that are most likely substitutes in consumption?

Use the following to answer questions: -(Table: Supply of Lemonade) Look at the table Supply of Lemonade. If the price of lemonade is $1 per cup, the total quantity of lemonade supplied will be:

Over the past few years, the technology associated with producing flat-panel televisions has improved. This has led to a(n) _ in the _ flat-panel televisions.

Why are economists so particular about the difference between an increase in quantity demanded and an increase in demand? Aren't they the same thing?

Suppose the supply curve for soap bubbles has a slope of +1 and intersects the vertical axis at a price of $2 per bottle. Interpret the meaning of both the y-intercept and the slope.

Use the following to answer questions: -(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market for Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.60, the price will:

An increase in supply with no change in demand will lead to _ in equilibrium quantity and _ in equilibrium price.

How would each of the following events affect the supply of compact cars? I. The price of steel rises. II. The production technology for car manufacturing improves. III. The price of sport utility vehicles falls.

If chicken and beef are substitutes, then a fall in the price of chicken will bring about:

First Principles

Economic Models: Trade-Offs and Trade 25

Consumer and Producer Surplus

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods Common Resources

The Economics of the Welfare

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Filters

Exam 3: Supply and Demand

Over the past several years, consumers have had an increasing interest in getting tattoos. This means that the _____ for tattoos has _____.

French fries and hamburgers are complements in consumption. Suppose the cost of the ingredients used to make hamburgers rises, so that the price of a hamburger rises. Then the equilibrium relative price of french fries _____ and the equilibrium quantity _____.

Equilibrium quantity will always increase if:

Which of the following is NOT a determinant of supply?

If in a competitive market the quantity supplied exceeds the quantity demanded, we expect prices to:

Suppose oranges and clementines are considered to be substitutes. Holding everything else constant, if the price of oranges increases, then the demand for _____ will _____.

Which of the following will NOT cause an increase in the supply of good X?

Use the following to answer questions: -(Table: Competitive Market for Good Z) Look at the table Competitive Market for Good Z. The equilibrium price and quantity in this market are, respectively:

Which of the following describes two goods that are most likely substitutes in consumption?

Use the following to answer questions: -(Table: Supply of Lemonade) Look at the table Supply of Lemonade. If the price of lemonade is $1 per cup, the total quantity of lemonade supplied will be:

Over the past few years, the technology associated with producing flat-panel televisions has improved. This has led to a(n) _____ in the _____ flat-panel televisions.

Why are economists so particular about the difference between an increase in quantity demanded and an increase in demand? Aren't they the same thing?

Suppose the supply curve for soap bubbles has a slope of +1 and intersects the vertical axis at a price of $2 per bottle. Interpret the meaning of both the y-intercept and the slope.

Use the following to answer questions: -(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market for Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.60, the price will:

An increase in supply with no change in demand will lead to _____ in equilibrium quantity and _____ in equilibrium price.

How would each of the following events affect the supply of compact cars? I. The price of steel rises. II. The production technology for car manufacturing improves. III. The price of sport utility vehicles falls.

If chicken and beef are substitutes, then a fall in the price of chicken will bring about:

First Principles

Economic Models: Trade-Offs and Trade 25

Consumer and Producer Surplus

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods Common Resources

The Economics of the Welfare

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Filters

Over the past several years, consumers have had an increasing interest in getting tattoos. This means that the _ for tattoos has _.

French fries and hamburgers are complements in consumption. Suppose the cost of the ingredients used to make hamburgers rises, so that the price of a hamburger rises. Then the equilibrium relative price of french fries _ and the equilibrium quantity _.

Suppose oranges and clementines are considered to be substitutes. Holding everything else constant, if the price of oranges increases, then the demand for _ will _.

Over the past few years, the technology associated with producing flat-panel televisions has improved. This has led to a(n) _ in the _ flat-panel televisions.

An increase in supply with no change in demand will lead to _ in equilibrium quantity and _ in equilibrium price.