Question 1

Which of the following is the effect of a decrease in the price of potato chips on the market for pretzels, a substitute good, that is initially in equilibrium?

Accepted Answer

A)  Both the equilibrium price and equilibrium quantity of pretzels will increase. 
B)  Both the equilibrium price and equilibrium quantity of pretzels will fall. 
C)  The equilibrium price of pretzels will increase, and the equilibrium quantity of pretzels will fall. 
D)  The equilibrium price of pretzels will fall, and the equilibrium quantity of pretzels will increase. 
E)  The equilibrium price and equilibrium quantity of pretzels will remain unchanged. 
A)  Both the equilibrium price and equilibrium quantity of pretzels will increase. 
B)  Both the equilibrium price and equilibrium quantity of pretzels will fall. 
C)  The equilibrium price of pretzels will increase, and the equilibrium quantity of pretzels will fall. 
D)  The equilibrium price of pretzels will fall, and the equilibrium quantity of pretzels will increase. 
E)  The equilibrium price and equilibrium quantity of pretzels will remain unchanged.

Question 2

Exhibit 4.6
  
-For a given downward-sloping demand curve, all other things remaining constant, a decrease in supply will cause a(n) _____

Accepted Answer

A)  increase in demand. 
B)  increase in the equilibrium quantity. 
C)  increase in quantity demanded. 
D)  decrease in quantity demanded. 
E)  decrease in the equilibrium price. 
A)  increase in demand. 
B)  increase in the equilibrium quantity. 
C)  increase in quantity demanded. 
D)  decrease in quantity demanded. 
E)  decrease in the equilibrium price.

Question 3

Other things constant, which of the following would shift the supply curve of a good to the left?

Accepted Answer

A)  an increase in the price of that good 
B)  a decrease in the price of an alternative good 
C)  an improvement in technology used in producing the good 
D)  an increase in the cost of an important resource used to produce the good 
E)  an increase in the number of producers of the good 
A)  an increase in the price of that good 
B)  a decrease in the price of an alternative good 
C)  an improvement in technology used in producing the good 
D)  an increase in the cost of an important resource used to produce the good 
E)  an increase in the number of producers of the good

Question 4

Other things constant, which of the following is likely to shift the market supply curve for corn in the short run?

Accepted Answer

A)  a change in the price of corn 
B)  a change in the prices of pesticides 
C)  a change in the number of corn consumers 
D)  a change in the expectations of consumers about the future price of corn 
E)  a change in the money income of corn consumers 
A)  a change in the price of corn 
B)  a change in the prices of pesticides 
C)  a change in the number of corn consumers 
D)  a change in the expectations of consumers about the future price of corn 
E)  a change in the money income of corn consumers

Question 5

Table 4.5
 $$\begin{array}{l}
\text { Table } 4.5\
\begin{array} { | l | c | c | c | c | } 
\hline & \text { Year 1 } & \text { Year 2 } & \text { Year 3 } & \text { Year 4 } \
\hline \text { Price } & \$ 2 & \$ 3 & \$ 4 & \$ 4 \
\hline \text { Quantity } & 1,000,000 & 200,000 & 1,000,000 & 2,000,000 \
\hline
\end{array}
\end{array}$$
-In the table given below, which of the following statements is true of the market for corn?

Accepted Answer

A)  In Year 1, there was an excess supply of corn in the economy. 
B)  In Year 1, the corn market was not in equilibrium. 
C)  The weather for corn production was probably better in Year 3 than in Year 2. 
D)  Between Year 3 and Year 4, both the supply and demand for corn must have increased by the same amount. 
E)  Between Year 2 and Year 3, the demand for corn decreased. 
A)  In Year 1, there was an excess supply of corn in the economy. 
B)  In Year 1, the corn market was not in equilibrium. 
C)  The weather for corn production was probably better in Year 3 than in Year 2. 
D)  Between Year 3 and Year 4, both the supply and demand for corn must have increased by the same amount. 
E)  Between Year 2 and Year 3, the demand for corn decreased.

Question 6

If supply decreases for 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 7

Which of the following is the best example of a pair 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 8

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

Accepted Answer

A) True 
 B)False

Question 9

Table 4.3
 $$\begin{array} { | c | c | c | } 
\hline \text { Price (\$) } & \text { Quantity demanded } & \text { Quantity supplied } \
\hline 1.0 & 100 & 10 \
\hline 1.20 & 90 & 30 \
\hline 1.40 & 80 & 50 \
\hline 1.50 & 70 & 70 \
\hline 1.60 & 60 & 90 \
\hline
\end{array}$$
-The table given below shows the quantity supplied and the quantity demanded of a good at different prices. If the price of the good described in the table given below is $1.60, then there is a _____

Accepted Answer

A)  shortage of 30 units. 
B)  surplus of 30 units. 
C)  shortage of 20 units. 
D)  surplus of 20 units. 
E)  surplus of 10 units. 
A)  shortage of 30 units. 
B)  surplus of 30 units. 
C)  shortage of 20 units. 
D)  surplus of 20 units. 
E)  surplus of 10 units.

Question 10

Suppose the market for a good 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)  The equilibrium price will fall, and the equilibrium quantity will rise. 
B)  The equilibrium price will rise, and the equilibrium quantity will fall. 
C)  Both the equilibrium price and equilibrium quantity will rise. 
D)  The equilibrium price will rise but the change in the equilibrium quantity is indeterminate. 
E)  Both the equilibrium price and equilibrium quantity will fall. 
A)  The equilibrium price will fall, and the equilibrium quantity will rise. 
B)  The equilibrium price will rise, and the equilibrium quantity will fall. 
C)  Both the equilibrium price and equilibrium quantity will rise. 
D)  The equilibrium price will rise but the change in the equilibrium quantity is indeterminate. 
E)  Both the equilibrium price and equilibrium quantity will fall.

Question 11

Disequilibrium occurs due to the absence of government intervention in certain markets.

Accepted Answer

A) True 
 B)False

Question 12

Exhibit 4.1
  
-Refer to Exhibit 4.1 for the demand curves of 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 of the demand curve from D₁ to D₂ 
B)  a movement along the demand curve D₁ from point a to point b 
C)  a shift of 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 of the demand curve from D₁ to D₂ 
B)  a movement along the demand curve D₁ from point a to point b 
C)  a shift of 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 13

The _____ for a product indicate(s) the quantity of the product consumers are both willing and able to buy at each price during a given time period, other things constant.

Accepted Answer

A)  scarce resources 
B)  unlimited wants 
C)  markets 
D)  demand 
E)  supply 
A)  scarce resources 
B)  unlimited wants 
C)  markets 
D)  demand 
E)  supply

Question 14

Suppose you drink more tea because the price of coffee has increased. This is indicative of _____

Accepted Answer

A)  a positive relation between money income and demand. 
B)  an inverse relation between price and quantity supplied. 
C)  a positive relation between price and quantity demanded. 
D)  the income effect of a price change. 
E)  the substitution effect of a price change. 
A)  a positive relation between money income and demand. 
B)  an inverse relation between price and quantity supplied. 
C)  a positive relation between price and quantity demanded. 
D)  the income effect of a price change. 
E)  the substitution effect of a price change.

Question 15

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

Accepted Answer

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

Question 16

Exhibit 4.1
  
-Refer to Exhibit 4.1 for the demand curves of baby formula. Which of the following changes will be caused by the discovery that breast milk provides more protection against a life-threatening disease than baby formula?

Accepted Answer

A)  a shift of the demand curve from D₁ to D₂ 
B)  a movement along the demand curve D₁ from point a to point b 
C)  a shift of 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 of the demand curve from D₁ to D₂ 
B)  a movement along the demand curve D₁ from point a to point b 
C)  a shift of 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 17

Table 4.6
  
-Refer to Table 4.6. In which of the following combination does the equilibrium quantity decrease?

Accepted Answer

A)  Box A 
B)  Box B 
C)  Box C 
D)  Box D 
E)  Equilibrium quantity does not increase in any combination. 
A)  Box A 
B)  Box B 
C)  Box C 
D)  Box D 
E)  Equilibrium quantity does not increase in any combination.

Question 18

Table 4.3
 $$\begin{array} { | c | c | c | } 
\hline \text { Price (\$) } & \text { Quantity demanded } & \text { Quantity supplied } \
\hline 1.0 & 100 & 10 \
\hline 1.20 & 90 & 30 \
\hline 1.40 & 80 & 50 \
\hline 1.50 & 70 & 70 \
\hline 1.60 & 60 & 90 \
\hline
\end{array}$$
-The table given below shows the quantity supplied and the quantity demanded of a good at different prices. If the price of the good described in the table below is $1.60, then an economist would expect the _____

Accepted Answer

A)  price to decrease to $1.40. 
B)  price to decrease to $1.50. 
C)  quantity supplied to decrease to 30 units. 
D)  quantity demanded to increase to 90 units. 
E)  quantity demanded to decrease to 50 units. 
A)  price to decrease to $1.40. 
B)  price to decrease to $1.50. 
C)  quantity supplied to decrease to 30 units. 
D)  quantity demanded to increase to 90 units. 
E)  quantity demanded to decrease to 50 units.

Question 19

Which of the following is most likely to be a normal good?

Accepted Answer

A)  bologna sandwiches 
B)  second-hand electronic appliances 
C)  tickets to major league baseball games 
D)  bus rides 
E)  used paperback books 
A)  bologna sandwiches 
B)  second-hand electronic appliances 
C)  tickets to major league baseball games 
D)  bus rides 
E)  used paperback books

Question 20

Table 4.2
 $$\begin{array}{l}
\text { Table } 4.2\
\begin{array} { | l | l | } 
\hline \begin{array} { l } 
\text { Price per Pizza } \
( \$ )
\end{array} & \begin{array} { l } 
\text { Quantity Supplied per Week } \
\text { (millions) }
\end{array} \
\hline 15 & 28 \
\hline 12 & 24 \
\hline 9 & 20 \
\hline 6 & 16 \
\hline 3 & 12 \
\hline
\end{array}
\end{array}$$
-Refer to the market supply schedule for pizza in Table 4.2. When the price increases from $6 to $15, what is the change in quantity supplied in the pizza market?

Accepted Answer

A)  stays the same at 28 million pizzas 
B)  increases to 28 million pizzas 
C)  decreases by 28 million pizzas 
D)  increases by 12 million pizzas 
E)  decreases by 12 million pizzas 
A)  stays the same at 28 million pizzas 
B)  increases to 28 million pizzas 
C)  decreases by 28 million pizzas 
D)  increases by 12 million pizzas 
E)  decreases by 12 million pizzas

Which of the following is the effect of a decrease in the price of potato chips on the market for pretzels, a substitute good, that is initially in equilibrium?

Exhibit 4.6 -For a given downward-sloping demand curve, all other things remaining constant, a decrease in supply will cause a(n) _____

Other things constant, which of the following would shift the supply curve of a good to the left?

Other things constant, which of the following is likely to shift the market supply curve for corn in the short run?

Table 4.5 Table 4.5 Year 1 Year 2 Year 3 Year 4 Price \ 2 \ 3 \ 4 \ 4 Quantity 1,000,000 200,000 1,000,000 2,000,000 -In the table given below, which of the following statements is true of the market for corn?

If supply decreases for a given demand curve, ______

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

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

Suppose the market for a good 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?

Disequilibrium occurs due to the absence of government intervention in certain markets.

Exhibit 4.1 -Refer to Exhibit 4.1 for the demand curves of baby formula. If baby formula is an inferior good, then an increase in consumer income is likely to cause which of the following changes?

The _____ for a product indicate(s) the quantity of the product consumers are both willing and able to buy at each price during a given time period, other things constant.

Suppose you drink more tea because the price of coffee has increased. This is indicative of _____

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

Exhibit 4.1 -Refer to Exhibit 4.1 for the demand curves of baby formula. Which of the following changes will be caused by the discovery that breast milk provides more protection against a life-threatening disease than baby formula?

Table 4.6 -Refer to Table 4.6. In which of the following combination does the equilibrium quantity decrease?

Which of the following is most likely to be a normal good?

Table 4.2 Table 4.2 Price per Pizza (\ ) Quantity Supplied per Week (millions) 15 28 12 24 9 20 6 16 3 12 -Refer to the market supply schedule for pizza in Table 4.2. When the price increases from $6 to $15, what is the change in quantity supplied in the pizza market?

The Art and Science of Economic Analysis.

Economic Tools and Economic Systems.

Economic Decision Makers.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Unemployment and Inflation.

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.

Macro Policy Debate: Active or Passive?

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Exam 4: Demand, Supply, and Markets.

Which of the following is the effect of a decrease in the price of potato chips on the market for pretzels, a substitute good, that is initially in equilibrium?

Exhibit 4.6 -For a given downward-sloping demand curve, all other things remaining constant, a decrease in supply will cause a(n) _____

Other things constant, which of the following would shift the supply curve of a good to the left?

Other things constant, which of the following is likely to shift the market supply curve for corn in the short run?

Table 4.5 Table 4.5 Year 1 Year 2 Year 3 Year 4 Price \ 2 \ 3 \ 4 \ 4 Quantity 1,000,000 200,000 1,000,000 2,000,000 -In the table given below, which of the following statements is true of the market for corn?

If supply decreases for a given demand curve, ______

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

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

Suppose the market for a good 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?

Disequilibrium occurs due to the absence of government intervention in certain markets.

Exhibit 4.1 -Refer to Exhibit 4.1 for the demand curves of baby formula. If baby formula is an inferior good, then an increase in consumer income is likely to cause which of the following changes?

The _____ for a product indicate(s) the quantity of the product consumers are both willing and able to buy at each price during a given time period, other things constant.

Suppose you drink more tea because the price of coffee has increased. This is indicative of _____

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

Exhibit 4.1 -Refer to Exhibit 4.1 for the demand curves of baby formula. Which of the following changes will be caused by the discovery that breast milk provides more protection against a life-threatening disease than baby formula?

Table 4.6 -Refer to Table 4.6. In which of the following combination does the equilibrium quantity decrease?

Which of the following is most likely to be a normal good?

Table 4.2 Table 4.2 Price per Pizza (\ ) Quantity Supplied per Week (millions) 15 28 12 24 9 20 6 16 3 12 -Refer to the market supply schedule for pizza in Table 4.2. When the price increases from $6 to $15, what is the change in quantity supplied in the pizza market?

The Art and Science of Economic Analysis.

Economic Tools and Economic Systems.

Economic Decision Makers.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Unemployment and Inflation.

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.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

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