Question 1

According to the law of demand, when will higher corn prices reduce the quantity demanded of corn?

Accepted Answer

A)  Always. 
B)  When the supply of corn is fixed. 
C)  When nonprice determinants, like income and the number of buyers, are unchanged. 
D)  When there are no shortages or surpluses of corn. 
A)  Always. 
B)  When the supply of corn is fixed. 
C)  When nonprice determinants, like income and the number of buyers, are unchanged. 
D)  When there are no shortages or surpluses of corn. C

Question 2

Which of the following would decrease the supply of airline travel?

Accepted Answer

A)  Reduced number of airline travelers. 
B)  New airline companies beginning operations. 
C)  Higher fuel costs. 
D)  Lower prices for airline tickets. 
A)  Reduced number of airline travelers. 
B)  New airline companies beginning operations. 
C)  Higher fuel costs. 
D)  Lower prices for airline tickets. C

Question 3

A rightward shift of a demand curve is called a(n):

Accepted Answer

A)  increase in demand. 
B)  decrease in demand. 
C)  increase in quantity demanded. 
D)  decrease in quantity demanded. 
A)  increase in demand. 
B)  decrease in demand. 
C)  increase in quantity demanded. 
D)  decrease in quantity demanded. A

Question 4

Which of the following events would increase the supply of tomatoes?

Accepted Answer

A)  A decrease in the price of pasta products. 
B)  An increase in wages for the tomato pickers. 
C)  A decrease in the cost of fertilizers for the tomato plants. 
D)  Unseasonably hot, dry weather in the tomato-growing regions of the nation. 
A)  A decrease in the price of pasta products. 
B)  An increase in wages for the tomato pickers. 
C)  A decrease in the cost of fertilizers for the tomato plants. 
D)  Unseasonably hot, dry weather in the tomato-growing regions of the nation.

Question 5

Which of the following will reduce the supply of motorcycles?

Accepted Answer

A)  An increase in the population age 16 to 35, the primary consumers of motorcycles. 
B)  An increase in taxes imposed on motorcycle producers. 
C)  A technological improvement reducing the production costs of motorcycles. 
D)  A government study that reveals motorcycle riders, on average, live 10 years longer than those who don't ride motorcycles. 
A)  An increase in the population age 16 to 35, the primary consumers of motorcycles. 
B)  An increase in taxes imposed on motorcycle producers. 
C)  A technological improvement reducing the production costs of motorcycles. 
D)  A government study that reveals motorcycle riders, on average, live 10 years longer than those who don't ride motorcycles.

Question 6

The most plausible reason why changes in the price of cotton can cause shifts in the supply curve for tobacco is:

Accepted Answer

A)  cigarette smokers often wear cotton shirts. 
B)  when incomes rise, people consume more cotton and tobacco. 
C)  firms can switch from growing tobacco to cotton and vice versa. 
D)  tobacco is an input in the production of cotton. 
A)  cigarette smokers often wear cotton shirts. 
B)  when incomes rise, people consume more cotton and tobacco. 
C)  firms can switch from growing tobacco to cotton and vice versa. 
D)  tobacco is an input in the production of cotton.

Question 7

Exhibit 3-5 Supply for Tucker's Cola Data
    Quantity supplied per week (millions of gallons)   Price per gallon     6   $3.00     5     2.50     4     2.00     3     1.50     2     1.00     1       .50   
In reference to Exhibit 3-5, assume the price of Tucker's Cola is $1.00 per gallon. If the price were to rise to $3.00 per gallon, and all other factors, such as taxes, etc. remained constant, the result would be a(n):

Accepted Answer

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

Question 8

If Congress decides to reduce the tax per pack paid by sellers of cigarettes, other things being equal, the price of cigarettes will fall. This fall in prices can be attributed a(n):

Accepted Answer

A)  upward movement along the supply curve for cigarettes. 
B)  rightward shift of the supply curve for cigarettes. 
C)  downward movement along the demand curve for cigarettes. 
D)  leftward shift of the supply curve for cigarettes. 
A)  upward movement along the supply curve for cigarettes. 
B)  rightward shift of the supply curve for cigarettes. 
C)  downward movement along the demand curve for cigarettes. 
D)  leftward shift of the supply curve for cigarettes.

Question 9

Exhibit 3-3 Demand curves
 
-Assume that crackers and soup are complementary goods. Which of the graphs in Exhibit 3-3 depicts the effect of a promotional discount that decreases the price of crackers on the demand for soup?

Accepted Answer

A)  Graph A. 
B)  Graph B. 
C)  Graph C. 
D)  Graph D. 
A)  Graph A. 
B)  Graph B. 
C)  Graph C. 
D)  Graph D.

Question 10

A technological improvement in producing good A would cause:

Accepted Answer

A)  a shift to the right of the supply curve for A. 
B)  a shift to the left of the supply curve for A. 
C)  a movement upward and to the right along the supply curve for A. 
D)  a movement downward and to the left along the supply curve for A. 
A)  a shift to the right of the supply curve for A. 
B)  a shift to the left of the supply curve for A. 
C)  a movement upward and to the right along the supply curve for A. 
D)  a movement downward and to the left along the supply curve for A.

Question 11

Which of the following could cause the supply of carrots to decrease?

Accepted Answer

A)  Consumers' incomes decrease. 
B)  There is a technological advance in carrot production. 
C)  Fertilizer costs increase. 
D)  The number of farmers growing carrots increases. 
A)  Consumers' incomes decrease. 
B)  There is a technological advance in carrot production. 
C)  Fertilizer costs increase. 
D)  The number of farmers growing carrots increases.

Question 12

Exhibit 3-1 Market Demand
 
Suppose there are only three people in the economy: Jane, Harry, and Bob. The individual demand for corn for each of these consumers is given in Exhibit 3-1. The total quantity demanded of corn if the market price is $5 is

Accepted Answer

A)  3. 
B)  25. 
C)  17. 
D)  26. 
A)  3. 
B)  25. 
C)  17. 
D)  26.

Question 13

An increase in demand:

Accepted Answer

A)  results in a leftward shift of the demand curve. 
B)  could be caused by a decrease in the price of the good. 
C)  could be caused by an increase in the price of a substitute good. 
D)  is shown as movement down along a demand curve. 
A)  results in a leftward shift of the demand curve. 
B)  could be caused by a decrease in the price of the good. 
C)  could be caused by an increase in the price of a substitute good. 
D)  is shown as movement down along a demand curve.

Question 14

If equilibrium is present in a market:

Accepted Answer

A)  there is either a shortage or a surplus. 
B)  the quantity demanded equals quantity supplied. 
C)  the quantity demanded exceeds quantity supplied. 
D)  the quantity supplied exceeds quantity demanded. 
A)  there is either a shortage or a surplus. 
B)  the quantity demanded equals quantity supplied. 
C)  the quantity demanded exceeds quantity supplied. 
D)  the quantity supplied exceeds quantity demanded.

Question 15

We can find the market demand for pears by:

Accepted Answer

A)  adding all the prices people are willing to pay for pears. 
B)  multiplying the number of people times the price of pears. 
C)  adding the number of pears that producers are willing to sell. 
D)  adding the individual demand curves for pears. 
A)  adding all the prices people are willing to pay for pears. 
B)  multiplying the number of people times the price of pears. 
C)  adding the number of pears that producers are willing to sell. 
D)  adding the individual demand curves for pears.

Question 16

Exhibit 3-8  Demand and Supply Data for Video Games
    Price   Quantity Demanded of Video Games   Quantity Supplied of Video Games     $75   400   900     70   450   850     65   500   800     60   550   750     55   600   700     50   650   650     45   700   600     40   750   550   
-Exhibit 3-8  Demand and Supply Data for Video Games
 
In Exhibit 3-8, at any market price of video games above $50, a(n) ______________ would result, causing price to __________.

Accepted Answer

A)  excess demand; rise 
B)  excess supply; rise 
C)  excess demand; fall 
D)  excess supply; fall 
A)  excess demand; rise 
B)  excess supply; rise 
C)  excess demand; fall 
D)  excess supply; fall

Question 17

Distinguish the laws of demand and supply. How are the laws of demand and supply illustrated graphically?

Accepted Answer

The law of demand states that there is a

Question 18

In accordance with the law of supply, both individual and market supply curves are drawn:

Accepted Answer

A)  horizontal. 
B)  vertical. 
C)  downward-sloping. 
D)  upward-sloping. 
A)  horizontal. 
B)  vertical. 
C)  downward-sloping. 
D)  upward-sloping.

Question 19

Which of the following will not shift the demand curve for grapefruit to the right?

Accepted Answer

A)  An announcement that eating a grapefruit before every meal will induce weight loss. 
B)  A technical development that allows machines to replace the workers who harvest grapefruit. 
C)  The price of oranges, a substitute good, increases. 
D)  Consumer incomes increase and grapefruit is a normal good. 
A)  An announcement that eating a grapefruit before every meal will induce weight loss. 
B)  A technical development that allows machines to replace the workers who harvest grapefruit. 
C)  The price of oranges, a substitute good, increases. 
D)  Consumer incomes increase and grapefruit is a normal good.

Question 20

According to the law of supply, when will lower corn prices decrease the quantity supplied of corn?

Accepted Answer

A)  always 
B)  when demand is fixed 
C)  when technology improves 
D)  when there are no shortages nor surpluses in the corn market 
A)  always 
B)  when demand is fixed 
C)  when technology improves 
D)  when there are no shortages nor surpluses in the corn market

Quantity supplied per week (millions of gallons)	Price per gallon
6	$3.00
5	2.50
4	2.00
3	1.50
2	1.00
1	.50

Price	Quantity Demanded of Video Games	Quantity Supplied of Video Games
$75	400	900
70	450	850
65	500	800
60	550	750
55	600	700
50	650	650
45	700	600
40	750	550

Exam 3: Market Demand and Supply

According to the law of demand, when will higher corn prices reduce the quantity demanded of corn?

Which of the following would decrease the supply of airline travel?

A rightward shift of a demand curve is called a(n):

Which of the following events would increase the supply of tomatoes?

Which of the following will reduce the supply of motorcycles?

The most plausible reason why changes in the price of cotton can cause shifts in the supply curve for tobacco is:

If Congress decides to reduce the tax per pack paid by sellers of cigarettes, other things being equal, the price of cigarettes will fall. This fall in prices can be attributed a(n):

Exhibit 3-3 Demand curves -Assume that crackers and soup are complementary goods. Which of the graphs in Exhibit 3-3 depicts the effect of a promotional discount that decreases the price of crackers on the demand for soup?

A technological improvement in producing good A would cause:

Which of the following could cause the supply of carrots to decrease?

Exhibit 3-1 Market Demand Suppose there are only three people in the economy: Jane, Harry, and Bob. The individual demand for corn for each of these consumers is given in Exhibit 3-1. The total quantity demanded of corn if the market price is $5 is

An increase in demand:

If equilibrium is present in a market:

We can find the market demand for pears by:

Distinguish the laws of demand and supply. How are the laws of demand and supply illustrated graphically?

In accordance with the law of supply, both individual and market supply curves are drawn:

Which of the following will not shift the demand curve for grapefruit to the right?

According to the law of supply, when will lower corn prices decrease the quantity supplied of corn?

Introducing the Economic Way of Thinking

Production Possibilities Opportunity Cost and Economic Growth

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution Poverty and Discrimination

Antitrust and Regulation

Environmental Economics

Gross Domestic Product

Business Cycles and Unemployment

Inflation

The Keynesian Model

The Keynesian Model in Action

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits Surpluses and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

The Phillips Curve and Expectations Theory

International Trade and Finance

Economies in Transition

Growth and the Less Developed Countries

Understanding Direct and Inverse Relationships between Variables

Filters