Question 1

All of the following would cause the demand curve for Coca Cola to increase except

Accepted Answer

A)  the price of Coca Cola decreases because of a price war among grocery stores 
B)  the price of Pepsi Cola, a substitute good, increases 
C)  there is an increase in the number of consumers in the market 
D)  a new government study concludes that Coca Cola helps prevent head colds 
A)  the price of Coca Cola decreases because of a price war among grocery stores 
B)  the price of Pepsi Cola, a substitute good, increases 
C)  there is an increase in the number of consumers in the market 
D)  a new government study concludes that Coca Cola helps prevent head colds

Question 2

The demand curve for CDs will shift in response to a change in consumer tastes, prices of related goods, or consumer expectations.

Accepted Answer

A) True 
 B)False

Question 3

A decrease in the supply of blankets, with the demand for blankets being unchanged, will

Accepted Answer

A)  increase the equilibrium quantity and decrease the equilibrium price 
B)  increase the equilibrium quantity and increase the equilibrium price 
C)  decrease the equilibrium quantity and decrease the equilibrium price 
D)  decrease the equilibrium quantity and increase the equilibrium price 
A)  increase the equilibrium quantity and decrease the equilibrium price 
B)  increase the equilibrium quantity and increase the equilibrium price 
C)  decrease the equilibrium quantity and decrease the equilibrium price 
D)  decrease the equilibrium quantity and increase the equilibrium price

Question 4

If lima beans are an inferior good for Alice, a decrease in her income would

Accepted Answer

A)  shift her demand curve for lima beans to the left 
B)  shift her demand curve for lima beans to the right 
C)  cause her to move upward along her demand curve for lima beans 
D)  cause her to move downward along her demand curve for lima beans 
A)  shift her demand curve for lima beans to the left 
B)  shift her demand curve for lima beans to the right 
C)  cause her to move upward along her demand curve for lima beans 
D)  cause her to move downward along her demand curve for lima beans

Question 5

All of the following are supply shifters except

Accepted Answer

A)  number of suppliers 
B)  consumer tastes 
C)  producer expectations 
D)  resource prices 
A)  number of suppliers 
B)  consumer tastes 
C)  producer expectations 
D)  resource prices

Question 6

According to the law of demand, there is a positive and direct relationship between price and quantity demanded.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following will cause the demand curve for a normal good to increase?

Accepted Answer

A)  an increase in the price of the good under consideration 
B)  a decrease in the price of the good under consideration 
C)  an increase in income 
D)  a decrease in income 
A)  an increase in the price of the good under consideration 
B)  a decrease in the price of the good under consideration 
C)  an increase in income 
D)  a decrease in income

Question 8

When supply decreases, the equilibrium price rises and the equilibrium quantity falls.

Accepted Answer

A) True 
 B)False

Question 9

A surplus of watermelon is most likely to cause a decrease in the price of watermelon.

Accepted Answer

A) True 
 B)False

Question 10

All of the following are consistent with the law of supply except

Accepted Answer

A)  the supply curve is positively sloped 
B)  as price increases, the quantity supplied increases 
C)  the extra cost of producing additional units of output rises as output rises 
D)  the extra cost of producing additional units of output falls as output rises 
A)  the supply curve is positively sloped 
B)  as price increases, the quantity supplied increases 
C)  the extra cost of producing additional units of output rises as output rises 
D)  the extra cost of producing additional units of output falls as output rises

Question 11

The demand curve for a normal good increases as income rises and falls as income decreases.

Accepted Answer

A) True 
 B)False

Question 12

According to the law of supply, there is a positive and direct relationship between price and quantity supplied.

Accepted Answer

A) True 
 B)False

Question 13

Supply is a schedule showing the amounts of a good or service that a firm or household is willing and able to sell at each possible price during a specified period.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a supply shifter for cigarettes?

Accepted Answer

A)  household incomes 
B)  price of cigars 
C)  number of smokers 
D)  cigarette taxes 
A)  household incomes 
B)  price of cigars 
C)  number of smokers 
D)  cigarette taxes

Question 15

Assume that the demand for apples increased. The effect would be a(n)

Accepted Answer

A)  increase in the equilibrium price and a decrease in the equilibrium quantity 
B)  increase in the equilibrium price and an increase in the equilibrium quantity 
C)  decrease in the equilibrium price and an increase in the equilibrium quantity 
D)  decrease in the equilibrium price and a decrease in the equilibrium quantity 
A)  increase in the equilibrium price and a decrease in the equilibrium quantity 
B)  increase in the equilibrium price and an increase in the equilibrium quantity 
C)  decrease in the equilibrium price and an increase in the equilibrium quantity 
D)  decrease in the equilibrium price and a decrease in the equilibrium quantity

Question 16

Economists explain the law of ______ in terms of the income effect, the substitution effect, and the law of diminishing marginal utility.

Accepted Answer

A)  demand 
B)  supply 
C)  rationality 
D)  price 
A)  demand 
B)  supply 
C)  rationality 
D)  price

Question 17

An increase in demand for iphones will

Accepted Answer

A)  increase equilibrium quantity but have an indeterminate effect on the equilibrium price 
B)  decrease equilibrium price but have an indeterminate effect on the equilibrium quantity 
C)  decrease equilibrium quantity and decrease equilibrium price 
D)  increase equilibrium price and increase quilibrium quantity 
A)  increase equilibrium quantity but have an indeterminate effect on the equilibrium price 
B)  decrease equilibrium price but have an indeterminate effect on the equilibrium quantity 
C)  decrease equilibrium quantity and decrease equilibrium price 
D)  increase equilibrium price and increase quilibrium quantity

Question 18

According to the text, the U.S. can reduce its dependence on foreign oil by

Accepted Answer

A)  increasing the demand for oil products 
B)  increasing drilling offshore and in wilderness areas 
C)  building fewer plants and refineries 
D)  government subsidies to consumers who buy large sport-utility vehicles 
A)  increasing the demand for oil products 
B)  increasing drilling offshore and in wilderness areas 
C)  building fewer plants and refineries 
D)  government subsidies to consumers who buy large sport-utility vehicles

Question 19

If the demand for a good is negatively related to the price of another good, the two goods are

Accepted Answer

A)  substitute goods 
B)  complementary goods 
C)  normal goods 
D)  inferior goods 
A)  substitute goods 
B)  complementary goods 
C)  normal goods 
D)  inferior goods

Question 20

According to the law of supply, as price decreases, the

Accepted Answer

A)  quantity supplied of the good increases 
B)  quantity supplied of the good decreases 
C)  supply curve of the good shifts to the left 
D)  supply curve of the good shifts to the right 
A)  quantity supplied of the good increases 
B)  quantity supplied of the good decreases 
C)  supply curve of the good shifts to the left 
D)  supply curve of the good shifts to the right

All of the following would cause the demand curve for Coca Cola to increase except

The demand curve for CDs will shift in response to a change in consumer tastes, prices of related goods, or consumer expectations.

A decrease in the supply of blankets, with the demand for blankets being unchanged, will

If lima beans are an inferior good for Alice, a decrease in her income would

All of the following are supply shifters except

According to the law of demand, there is a positive and direct relationship between price and quantity demanded.

Which of the following will cause the demand curve for a normal good to increase?

When supply decreases, the equilibrium price rises and the equilibrium quantity falls.

A surplus of watermelon is most likely to cause a decrease in the price of watermelon.

All of the following are consistent with the law of supply except

The demand curve for a normal good increases as income rises and falls as income decreases.

According to the law of supply, there is a positive and direct relationship between price and quantity supplied.

Supply is a schedule showing the amounts of a good or service that a firm or household is willing and able to sell at each possible price during a specified period.

Which of the following is a supply shifter for cigarettes?

Assume that the demand for apples increased. The effect would be a(n)

Economists explain the law of ______ in terms of the income effect, the substitution effect, and the law of diminishing marginal utility.

An increase in demand for iphones will

According to the text, the U.S. can reduce its dependence on foreign oil by

If the demand for a good is negatively related to the price of another good, the two goods are

According to the law of supply, as price decreases, the

Scarcity and Choice

Demand and Supply Applications

Production and the Costs of Production

Competition and Monopoly: Virtues and Vices

Imperfect Competition

Labor Markets

Government and Markets

The Mixed Economy of the United States

Gross Domestic Product and Economic Growth

The Business Cycle, Unemployment, and Inflation

Macroeconomic Instability: Aggregate Demand and Aggregate Supply

Fiscal Policy and the Federal Budget

Money and the Banking System

The Federal Reserve and Monetary Policy

The United States and the Global Economy

International Finance

Economic Systems and Developing Countries

Filters

Exam 2: Market Transactions: Demand and Supply Analysis

All of the following would cause the demand curve for Coca Cola to increase except

The demand curve for CDs will shift in response to a change in consumer tastes, prices of related goods, or consumer expectations.

A decrease in the supply of blankets, with the demand for blankets being unchanged, will

If lima beans are an inferior good for Alice, a decrease in her income would

All of the following are supply shifters except

According to the law of demand, there is a positive and direct relationship between price and quantity demanded.

Which of the following will cause the demand curve for a normal good to increase?

When supply decreases, the equilibrium price rises and the equilibrium quantity falls.

A surplus of watermelon is most likely to cause a decrease in the price of watermelon.

All of the following are consistent with the law of supply except

The demand curve for a normal good increases as income rises and falls as income decreases.

According to the law of supply, there is a positive and direct relationship between price and quantity supplied.

Supply is a schedule showing the amounts of a good or service that a firm or household is willing and able to sell at each possible price during a specified period.

Which of the following is a supply shifter for cigarettes?

Assume that the demand for apples increased. The effect would be a(n)

Economists explain the law of ______ in terms of the income effect, the substitution effect, and the law of diminishing marginal utility.

An increase in demand for iphones will

According to the text, the U.S. can reduce its dependence on foreign oil by

If the demand for a good is negatively related to the price of another good, the two goods are

According to the law of supply, as price decreases, the

Scarcity and Choice

Demand and Supply Applications

Production and the Costs of Production

Competition and Monopoly: Virtues and Vices

Imperfect Competition

Labor Markets

Government and Markets

The Mixed Economy of the United States

Gross Domestic Product and Economic Growth

The Business Cycle, Unemployment, and Inflation

Macroeconomic Instability: Aggregate Demand and Aggregate Supply

Fiscal Policy and the Federal Budget

Money and the Banking System

The Federal Reserve and Monetary Policy

The United States and the Global Economy

International Finance

Economic Systems and Developing Countries

Filters