Question 1

-The table above shows the situation in the gasoline market in Tulsa,Oklahoma.If the price of a gallon of gasoline is $3.73,then

Accepted Answer

A)  there is a surplus of gasoline in Tulsa. 
B)  there is a shortage of gasoline in Tulsa. 
C)  the gasoline market in Tulsa is in equilibrium. 
D)  without more information we cannot determine if there is a surplus, a shortage, or an equilibrium in the gasoline market in Tulsa. 
E)  there is neither a surplus nor a shortage, but the market is NOT in equilibrium. 
A)  there is a surplus of gasoline in Tulsa. 
B)  there is a shortage of gasoline in Tulsa. 
C)  the gasoline market in Tulsa is in equilibrium. 
D)  without more information we cannot determine if there is a surplus, a shortage, or an equilibrium in the gasoline market in Tulsa. 
E)  there is neither a surplus nor a shortage, but the market is NOT in equilibrium.

Question 2

Which of the following increases the quantity supplied of compact discs but does NOT increase the supply of compact discs?

Accepted Answer

A)  a decrease in the price of a compact disc 
B)  an increase in the price of a compact disc 
C)  a decrease in the number of suppliers of compact discs 
D)  an increase in the price of the resources used to produce compact discs 
E)  new technology that lowers the cost of producing compact discs 
A)  a decrease in the price of a compact disc 
B)  an increase in the price of a compact disc 
C)  a decrease in the number of suppliers of compact discs 
D)  an increase in the price of the resources used to produce compact discs 
E)  new technology that lowers the cost of producing compact discs

Question 3

-The diagram above illustrates the market for apartments in Victoria,British Columbia.
a.If the current rent is $300 per month,is there a shortage or surplus in the apartment market and how much is the shortage or surplus?
b.What is the equilibrium rent and quantity of apartments?

Accepted Answer

a.If the rent is $300 per mont

Question 4

To be part of the supply for a good,a producer must be

Accepted Answer

A)  only able to supply the good. 
B)  only willing to supply the good. 
C)  both able and willing to supply the good. 
D)  both able and willing to supply the good, and have already identified a buyer. 
E)  both able and willing to supply the good, and have already sold the good. 
A)  only able to supply the good. 
B)  only willing to supply the good. 
C)  both able and willing to supply the good. 
D)  both able and willing to supply the good, and have already identified a buyer. 
E)  both able and willing to supply the good, and have already sold the good.

Question 5

What is the difference between a normal good and an inferior good.Give an example of each.

Accepted Answer

A good is a normal good if an increase i

Question 6

What is the effect on the price and quantity of a product if the demand decreases and the supply simultaneously increases?

Accepted Answer

The equilibrium price unambiguously fall

Question 7

If there is a surplus of a good,the quantity demanded is ________ the quantity supplied and the price will ________.

Accepted Answer

A)  less than; rise 
B)  less than; fall 
C)  greater than; rise 
D)  greater than; fall 
E)  equal to; fall 
A)  less than; rise 
B)  less than; fall 
C)  greater than; rise 
D)  greater than; fall 
E)  equal to; fall

Question 8

Teenagers drink more soda than other age groups.If the number of teenagers increases,everything else remaining the same,

Accepted Answer

A)  market demand for soda increases. 
B)  market demand for soda decreases. 
C)  market demand for soda does not change. 
D)  there is a movement along the market demand curve for soda. 
E)  None of the above answers is correct because the effect on the demand depends whether the supply curve shifts rightward, leftward, or not at all. 
A)  market demand for soda increases. 
B)  market demand for soda decreases. 
C)  market demand for soda does not change. 
D)  there is a movement along the market demand curve for soda. 
E)  None of the above answers is correct because the effect on the demand depends whether the supply curve shifts rightward, leftward, or not at all.

Question 9

Which of the following shifts the supply curve for oranges?

Accepted Answer

A)  disastrous weather that destroys about half of this year's orange crop 
B)  a newly discovered increase in the nutritional value of oranges 
C)  an increase in the price of bananas, a substitute in consumption for oranges 
D)  an increase in income for all orange consumers if oranges are a normal good 
E)  an increase in the number of orange consumers 
A)  disastrous weather that destroys about half of this year's orange crop 
B)  a newly discovered increase in the nutritional value of oranges 
C)  an increase in the price of bananas, a substitute in consumption for oranges 
D)  an increase in income for all orange consumers if oranges are a normal good 
E)  an increase in the number of orange consumers

Question 10

Consider the market for leather shoes.If producers believe the price of leather shoes will increase next month,today

Accepted Answer

A)  the supply curve for leather shoes shifts rightward. 
B)  the supply curve for leather shoes shifts leftward. 
C)  there is a movement along the supply curve for leather shoes. 
D)  the equilibrium price of leather shoes falls. 
E)  the equilibrium quantity of leather shoes increases. 
A)  the supply curve for leather shoes shifts rightward. 
B)  the supply curve for leather shoes shifts leftward. 
C)  there is a movement along the supply curve for leather shoes. 
D)  the equilibrium price of leather shoes falls. 
E)  the equilibrium quantity of leather shoes increases.

Question 11

Both the demand for and supply of cars changes in France.You observe that the quantity of cars does not change but the price rises.Thus,which of the following occurred?

Accepted Answer

A)  Demand and supply increased by an equal amount. 
B)  Demand and supply decreased by an equal amount. 
C)  Demand increased and supply decreased by an equal amount. 
D)  Demand decreased and supply increased by an equal amount. 
E)  Demand increased by a larger magnitude than supply decreased. 
A)  Demand and supply increased by an equal amount. 
B)  Demand and supply decreased by an equal amount. 
C)  Demand increased and supply decreased by an equal amount. 
D)  Demand decreased and supply increased by an equal amount. 
E)  Demand increased by a larger magnitude than supply decreased.

Question 12

If the price of carrots is below the equilibrium price,the

Accepted Answer

A)  quantity demanded of carrots exceeds the quantity supplied and a surplus exists. 
B)  quantity supplied of carrots exceeds the quantity demanded and a surplus exists. 
C)  quantity demanded of carrots exceeds the quantity supplied and a shortage exists. 
D)  quantity supplied of carrots exceeds the quantity demanded and a shortage exists. 
E)  quantity supplied of carrots equals the quantity demanded. 
A)  quantity demanded of carrots exceeds the quantity supplied and a surplus exists. 
B)  quantity supplied of carrots exceeds the quantity demanded and a surplus exists. 
C)  quantity demanded of carrots exceeds the quantity supplied and a shortage exists. 
D)  quantity supplied of carrots exceeds the quantity demanded and a shortage exists. 
E)  quantity supplied of carrots equals the quantity demanded.

Question 13

Consider the market for wheat.If there is an improvement in harvesting technology,

Accepted Answer

A)  the supply curve for wheat shifts rightward. 
B)  the demand curve for wheat shifts rightward. 
C)  there is a movement up along the demand curve. 
D)  the equilibrium price rises. 
E)  the demand curve for wheat shifts leftward. 
A)  the supply curve for wheat shifts rightward. 
B)  the demand curve for wheat shifts rightward. 
C)  there is a movement up along the demand curve. 
D)  the equilibrium price rises. 
E)  the demand curve for wheat shifts leftward.

Question 14

-Using the data in the table above,if the price of a stapler is $8,then there is a ________ of staplers and the quantity of staplers demanded ________ the quantity of staplers supplied.

Accepted Answer

A)  surplus; is greater than 
B)  surplus; is less than 
C)  shortage; is greater than 
D)  shortage; is less than 
E)  neither a surplus nor a shortage; equals 
A)  surplus; is greater than 
B)  surplus; is less than 
C)  shortage; is greater than 
D)  shortage; is less than 
E)  neither a surplus nor a shortage; equals

Question 15

In stores,it is common to find seasonal products marked down when the season ends.What explains this behavior?

Accepted Answer

A)  The law of demand is being used to increase the quantity demanded. 
B)  The store is trying to increase its customers' demand for the product. 
C)  The store manager must be trying to drive away customers by selling low quality products. 
D)  The store is trying to increase its consumer's incomes by increasing their purchasing power. 
E)  The store is trying to sell the goods and realizes that they are substitutes for other goods whose prices have risen. 
A)  The law of demand is being used to increase the quantity demanded. 
B)  The store is trying to increase its customers' demand for the product. 
C)  The store manager must be trying to drive away customers by selling low quality products. 
D)  The store is trying to increase its consumer's incomes by increasing their purchasing power. 
E)  The store is trying to sell the goods and realizes that they are substitutes for other goods whose prices have risen.

Question 16

If the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward,then

Accepted Answer

A)  the equilibrium quantity definitely increases. 
B)  the equilibrium quantity definitely decreases. 
C)  the equilibrium quantity definitely remains the same. 
D)  More information is needed to determine the effect on the equilibrium quantity. 
E)  the equilibrium price definitely falls. 
A)  the equilibrium quantity definitely increases. 
B)  the equilibrium quantity definitely decreases. 
C)  the equilibrium quantity definitely remains the same. 
D)  More information is needed to determine the effect on the equilibrium quantity. 
E)  the equilibrium price definitely falls.

Question 17

Consider the market for bread.If the price of wheat rises,then the

Accepted Answer

A)  demand curve for bread shifts leftward. 
B)  supply curve of bread shifts leftward. 
C)  price of bread falls. 
D)  equilibrium quantity of bread increases. 
E)  demand curve for bread shifts rightward. 
A)  demand curve for bread shifts leftward. 
B)  supply curve of bread shifts leftward. 
C)  price of bread falls. 
D)  equilibrium quantity of bread increases. 
E)  demand curve for bread shifts rightward.

Question 18

The phrase "a change in demand" most directly implies a

Accepted Answer

A)  movement along a demand curve. 
B)  movement along the price curve. 
C)  change in the quantity demanded of a good. 
D)  shift of the demand curve. 
E)  movement along the quantity curve. 
A)  movement along a demand curve. 
B)  movement along the price curve. 
C)  change in the quantity demanded of a good. 
D)  shift of the demand curve. 
E)  movement along the quantity curve.

Question 19

-The above figure illustrates the market for corn.If point "a" represents the original equilibrium and point "b" the new equilibrium,which of the following could have caused the change?

Accepted Answer

A)  an increase in the number of corn growers 
B)  an increase the price of wheat, a substitute in production for corn 
C)  an increase in the cost of the fertilizer used to grow the corn 
D)  a belief among corn farmers that the price of a bushel of corn will be higher next month 
E)  an increase in income if corn is a normal good 
A)  an increase in the number of corn growers 
B)  an increase the price of wheat, a substitute in production for corn 
C)  an increase in the cost of the fertilizer used to grow the corn 
D)  a belief among corn farmers that the price of a bushel of corn will be higher next month 
E)  an increase in income if corn is a normal good

Question 20

Suppose over the next several years the productivity of firms producing electric cars improves dramatically.The advance in productivity leads to

Accepted Answer

A)  a decrease in the supply of electric cars so that the supply curve shifts leftward. 
B)  a decrease in the supply of electric cars so that the supply curve shifts rightward. 
C)  an increase in the supply of electric cars so that the supply curve shifts leftward. 
D)  an increase in the supply electric cars so that the supply curve shifts rightward. 
E)  no change in the supply of electric cars, only a change in the quantity supplied of electric cars. 
A)  a decrease in the supply of electric cars so that the supply curve shifts leftward. 
B)  a decrease in the supply of electric cars so that the supply curve shifts rightward. 
C)  an increase in the supply of electric cars so that the supply curve shifts leftward. 
D)  an increase in the supply electric cars so that the supply curve shifts rightward. 
E)  no change in the supply of electric cars, only a change in the quantity supplied of electric cars.

-The table above shows the situation in the gasoline market in Tulsa,Oklahoma.If the price of a gallon of gasoline is $3.73,then

Which of the following increases the quantity supplied of compact discs but does NOT increase the supply of compact discs?

-The diagram above illustrates the market for apartments in Victoria,British Columbia. a.If the current rent is $300 per month,is there a shortage or surplus in the apartment market and how much is the shortage or surplus? b.What is the equilibrium rent and quantity of apartments?

To be part of the supply for a good,a producer must be

What is the difference between a normal good and an inferior good.Give an example of each.

What is the effect on the price and quantity of a product if the demand decreases and the supply simultaneously increases?

If there is a surplus of a good,the quantity demanded is the quantity supplied and the price will .

Teenagers drink more soda than other age groups.If the number of teenagers increases,everything else remaining the same,

Which of the following shifts the supply curve for oranges?

Consider the market for leather shoes.If producers believe the price of leather shoes will increase next month,today

Both the demand for and supply of cars changes in France.You observe that the quantity of cars does not change but the price rises.Thus,which of the following occurred?

If the price of carrots is below the equilibrium price,the

Consider the market for wheat.If there is an improvement in harvesting technology,

-Using the data in the table above,if the price of a stapler is $8,then there is a of staplers and the quantity of staplers demanded the quantity of staplers supplied.

In stores,it is common to find seasonal products marked down when the season ends.What explains this behavior?

If the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward,then

Consider the market for bread.If the price of wheat rises,then the

The phrase "a change in demand" most directly implies a

-The above figure illustrates the market for corn.If point "a" represents the original equilibrium and point "b" the new equilibrium,which of the following could have caused the change?

Suppose over the next several years the productivity of firms producing electric cars improves dramatically.The advance in productivity leads to

Getting Started

The Usand Global Economies

The Economic Problem

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 4: Demand and Supply

-The table above shows the situation in the gasoline market in Tulsa,Oklahoma.If the price of a gallon of gasoline is $3.73,then

Which of the following increases the quantity supplied of compact discs but does NOT increase the supply of compact discs?

-The diagram above illustrates the market for apartments in Victoria,British Columbia. a.If the current rent is $300 per month,is there a shortage or surplus in the apartment market and how much is the shortage or surplus? b.What is the equilibrium rent and quantity of apartments?

To be part of the supply for a good,a producer must be

What is the difference between a normal good and an inferior good.Give an example of each.

What is the effect on the price and quantity of a product if the demand decreases and the supply simultaneously increases?

If there is a surplus of a good,the quantity demanded is ________ the quantity supplied and the price will ________.

Teenagers drink more soda than other age groups.If the number of teenagers increases,everything else remaining the same,

Which of the following shifts the supply curve for oranges?

Consider the market for leather shoes.If producers believe the price of leather shoes will increase next month,today

Both the demand for and supply of cars changes in France.You observe that the quantity of cars does not change but the price rises.Thus,which of the following occurred?

If the price of carrots is below the equilibrium price,the

Consider the market for wheat.If there is an improvement in harvesting technology,

-Using the data in the table above,if the price of a stapler is $8,then there is a ________ of staplers and the quantity of staplers demanded ________ the quantity of staplers supplied.

In stores,it is common to find seasonal products marked down when the season ends.What explains this behavior?

If the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward,then

Consider the market for bread.If the price of wheat rises,then the

The phrase "a change in demand" most directly implies a

-The above figure illustrates the market for corn.If point "a" represents the original equilibrium and point "b" the new equilibrium,which of the following could have caused the change?

Suppose over the next several years the productivity of firms producing electric cars improves dramatically.The advance in productivity leads to

Getting Started

The Usand Global Economies

The Economic Problem

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

If there is a surplus of a good,the quantity demanded is the quantity supplied and the price will .

-Using the data in the table above,if the price of a stapler is $8,then there is a of staplers and the quantity of staplers demanded the quantity of staplers supplied.