Question 1

-The figure above shows the market for iPods.Which of the following creates a movement from point A to point B?

Accepted Answer

A)  a requirement that all students at universities have an iPod 
B)  a decrease in the price of iPods 
C)  a decrease in the price of Zunes, a substitute for iPods 
D)  an increase in the price of iPods 
E)  an increase in people's incomes 
A)  a requirement that all students at universities have an iPod 
B)  a decrease in the price of iPods 
C)  a decrease in the price of Zunes, a substitute for iPods 
D)  an increase in the price of iPods 
E)  an increase in people's incomes

Question 2

Water bottlers announce that next month the price of bottled water will rise by 25 percent.Which of the following occurs immediately?

Accepted Answer

A)  The quantity of bottled water demanded increases. 
B)  The quantity of bottled water demanded decreases. 
C)  The demand for bottled water decreases. 
D)  The demand for bottled water increases. 
E)  None of the above answers is correct because it is the supply that immediately changes, not the demand. 
A)  The quantity of bottled water demanded increases. 
B)  The quantity of bottled water demanded decreases. 
C)  The demand for bottled water decreases. 
D)  The demand for bottled water increases. 
E)  None of the above answers is correct because it is the supply that immediately changes, not the demand.

Question 3

For consumers,computers are a complement to computer software.Suppose the price of a computer falls.Simultaneously,suppose that the number of companies selling computer software decreases.How do these changes affect the price and quantity of computer software?

Accepted Answer

The fall in the price of a computer incr

Question 4

Which of the following shifts the demand curve for movies leftward?

Accepted Answer

A)  a decrease in the price of NetFlix, a substitute for movies. 
B)  a decrease in the price of movie tickets. 
C)  an increase in the price of movie tickets. 
D)  an increase in movie star salaries. 
E)  an increase in incomes, assuming movies are a normal good. 
A)  a decrease in the price of NetFlix, a substitute for movies. 
B)  a decrease in the price of movie tickets. 
C)  an increase in the price of movie tickets. 
D)  an increase in movie star salaries. 
E)  an increase in incomes, assuming movies are a normal good.

Question 5

Which of the following indicates that the law of supply applies to makers of soda?

Accepted Answer

A)  An increase in the price of a soda leads to an increase in the demand for soda. 
B)  An increase in the price of a soda leads to an increase in the supply of soda. 
C)  An increase in the price of a soda leads to an increase in the quantity of soda supplied. 
D)  A decrease in the price of a soda leads to an increase in the quantity of soda demanded. 
E)  A decrease in the price of a soda leads to an increase in the supply of soda. 
A)  An increase in the price of a soda leads to an increase in the demand for soda. 
B)  An increase in the price of a soda leads to an increase in the supply of soda. 
C)  An increase in the price of a soda leads to an increase in the quantity of soda supplied. 
D)  A decrease in the price of a soda leads to an increase in the quantity of soda demanded. 
E)  A decrease in the price of a soda leads to an increase in the supply of soda.

Question 6

Suppose the equilibrium price of oranges is $2.00 per pound.If the actual price is above the equilibrium price a

Accepted Answer

A)  shortage exists and the price falls to restore equilibrium. 
B)  shortage exists and the price rises to restore equilibrium. 
C)  surplus exists and the price falls to restore equilibrium. 
D)  surplus exists and the price rises to restore equilibrium. 
E)  surplus exists but nothing happens until either the demand or the supply changes. 
A)  shortage exists and the price falls to restore equilibrium. 
B)  shortage exists and the price rises to restore equilibrium. 
C)  surplus exists and the price falls to restore equilibrium. 
D)  surplus exists and the price rises to restore equilibrium. 
E)  surplus exists but nothing happens until either the demand or the supply changes.

Question 7

Car insurance and cars are complements.If the price of car insurance increases,the

Accepted Answer

A)  demand for cars decreases. 
B)  demand for cars increases. 
C)  quantity of cars demanded decreases. 
D)  quantity of cars demanded increases. 
E)  More information is needed to determine if the demand increases or decreases. 
A)  demand for cars decreases. 
B)  demand for cars increases. 
C)  quantity of cars demanded decreases. 
D)  quantity of cars demanded increases. 
E)  More information is needed to determine if the demand increases or decreases.

Question 8

-The above figure shows the market for pizza.The market is in equilibrium when people's incomes decrease.If pizza is a normal good,then which point represents the most likely new price and quantity?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
E)  E 
A)  A 
B)  B 
C)  C 
D)  D 
E)  E

Question 9

A change in the price of a good ________ its supply curve and ________ a movement along its supply curve.

Accepted Answer

A)  shifts; causes 
B)  shifts; does not cause 
C)  does not shift; causes 
D)  does not shift; does not cause 
E)  None of the above because the change in the price might cause either a shift in the supply curve or a movement along the supply curve depending on the size of the change. 
A)  shifts; causes 
B)  shifts; does not cause 
C)  does not shift; causes 
D)  does not shift; does not cause 
E)  None of the above because the change in the price might cause either a shift in the supply curve or a movement along the supply curve depending on the size of the change.

Question 10

The law of demand refers to how

Accepted Answer

A)  demand changes when people's incomes change. 
B)  demand changes when the prices of substitutes and complements change. 
C)  the quantity demanded changes when the price of the good changes. 
D)  the price of the good changes when people's demand for the good changes. 
E)  the quantity demanded changes when the demand for the good changes. 
A)  demand changes when people's incomes change. 
B)  demand changes when the prices of substitutes and complements change. 
C)  the quantity demanded changes when the price of the good changes. 
D)  the price of the good changes when people's demand for the good changes. 
E)  the quantity demanded changes when the demand for the good changes.

Question 11

Consider the market for feather pillows.If there is an increase in the price of feather dusters,a substitute in production for feather pillows,then

Accepted Answer

A)  the price of feather pillows decreases. 
B)  the demand curve for feather pillows shifts leftward. 
C)  the supply curve for feather pillows shifts leftward. 
D)  there is a downward movement along the demand curve for feather pillows. 
E)  the demand curve for feather pillows shifts rightward. 
A)  the price of feather pillows decreases. 
B)  the demand curve for feather pillows shifts leftward. 
C)  the supply curve for feather pillows shifts leftward. 
D)  there is a downward movement along the demand curve for feather pillows. 
E)  the demand curve for feather pillows shifts rightward.

Question 12

If the price of a DVD falls,
i.the demand curve for DVDs will shift rightward.
ii.the demand curve for DVDs will not shift.
iii.there will be a movement along the demand curve for DVDs.

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  ii and iii 
E)  i and iii 
A)  i only 
B)  ii only 
C)  iii only 
D)  ii and iii 
E)  i and iii

Question 13

Oil refiners can refine a barrel of petroleum so that it yields either more home heating oil or more diesel fuel.If the price of diesel fuel falls,there is

Accepted Answer

A)  an increase in the supply of home heating oil. 
B)  a decrease in the supply of home heating oil. 
C)  an increase in the quantity of home heating oil supplied. 
D)  a decrease in the quantity of home heating oil supplied. 
E)  an increase in the demand for home heating oil. 
A)  an increase in the supply of home heating oil. 
B)  a decrease in the supply of home heating oil. 
C)  an increase in the quantity of home heating oil supplied. 
D)  a decrease in the quantity of home heating oil supplied. 
E)  an increase in the demand for home heating oil.

Question 14

Which of the following increases the demand for a good or service?

Accepted Answer

A)  a fall in the price of the good or service 
B)  a smaller number of consumers wanting to buy the good or service 
C)  a rise in the price of the good or service 
D)  a rise in the price of a substitute good or service 
E)  a rise in the price of a complement 
A)  a fall in the price of the good or service 
B)  a smaller number of consumers wanting to buy the good or service 
C)  a rise in the price of the good or service 
D)  a rise in the price of a substitute good or service 
E)  a rise in the price of a complement

Question 15

If both supply and demand decrease by the same amount,the equilibrium price

Accepted Answer

A)  does not change. 
B)  rises. 
C)  falls. 
D)  cannot be predicted. 
E)  None of the answers is correct because the price depends on what happens to the equilibrium quantity. 
A)  does not change. 
B)  rises. 
C)  falls. 
D)  cannot be predicted. 
E)  None of the answers is correct because the price depends on what happens to the equilibrium quantity.

Question 16

-The above figure shows the market for pizza.The market is in equilibrium when people learn that eating pizza helps prevent heart disease.What point represents the most likely new price and quantity?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
E)  E 
A)  A 
B)  B 
C)  C 
D)  D 
E)  E

Question 17

Peanut butter and jelly are complements for many consumers.Consider the market for peanut butter.If there is an increase in the price of jelly,

Accepted Answer

A)  there is a movement along the supply curve of peanut butter. 
B)  the price of peanut butter rises. 
C)  the quantity of peanut butter increases. 
D)  there is a shift in the supply curve for jelly. 
E)  the demand curve for peanut butter does not shift; instead there is a movement along it. 
A)  there is a movement along the supply curve of peanut butter. 
B)  the price of peanut butter rises. 
C)  the quantity of peanut butter increases. 
D)  there is a shift in the supply curve for jelly. 
E)  the demand curve for peanut butter does not shift; instead there is a movement along it.

Question 18

-Using the data in the table above,if the price of a stapler is $5,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 19

In early 2012 the price of computer hard disc drives rose.In a demand and supply model,shifts in what curve or curves could have brought about the higher price?

Accepted Answer

The higher price could have been brought

Question 20

Why does an increase in supply lead to lower prices?

Accepted Answer

When the supply of a good,such as comput

-The figure above shows the market for iPods.Which of the following creates a movement from point A to point B?

Water bottlers announce that next month the price of bottled water will rise by 25 percent.Which of the following occurs immediately?

For consumers,computers are a complement to computer software.Suppose the price of a computer falls.Simultaneously,suppose that the number of companies selling computer software decreases.How do these changes affect the price and quantity of computer software?

Which of the following shifts the demand curve for movies leftward?

Which of the following indicates that the law of supply applies to makers of soda?

Suppose the equilibrium price of oranges is $2.00 per pound.If the actual price is above the equilibrium price a

Car insurance and cars are complements.If the price of car insurance increases,the

-The above figure shows the market for pizza.The market is in equilibrium when people's incomes decrease.If pizza is a normal good,then which point represents the most likely new price and quantity?

A change in the price of a good its supply curve and a movement along its supply curve.

The law of demand refers to how

Consider the market for feather pillows.If there is an increase in the price of feather dusters,a substitute in production for feather pillows,then

If the price of a DVD falls, i.the demand curve for DVDs will shift rightward. ii.the demand curve for DVDs will not shift. iii.there will be a movement along the demand curve for DVDs.

Oil refiners can refine a barrel of petroleum so that it yields either more home heating oil or more diesel fuel.If the price of diesel fuel falls,there is

Which of the following increases the demand for a good or service?

If both supply and demand decrease by the same amount,the equilibrium price

-The above figure shows the market for pizza.The market is in equilibrium when people learn that eating pizza helps prevent heart disease.What point represents the most likely new price and quantity?

Peanut butter and jelly are complements for many consumers.Consider the market for peanut butter.If there is an increase in the price of jelly,

-Using the data in the table above,if the price of a stapler is $5,then there is a of staplers and the quantity of staplers demanded the quantity of staplers supplied.

In early 2012 the price of computer hard disc drives rose.In a demand and supply model,shifts in what curve or curves could have brought about the higher price?

Why does an increase in supply lead to lower prices?

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 figure above shows the market for iPods.Which of the following creates a movement from point A to point B?

Water bottlers announce that next month the price of bottled water will rise by 25 percent.Which of the following occurs immediately?

For consumers,computers are a complement to computer software.Suppose the price of a computer falls.Simultaneously,suppose that the number of companies selling computer software decreases.How do these changes affect the price and quantity of computer software?

Which of the following shifts the demand curve for movies leftward?

Which of the following indicates that the law of supply applies to makers of soda?

Suppose the equilibrium price of oranges is $2.00 per pound.If the actual price is above the equilibrium price a

Car insurance and cars are complements.If the price of car insurance increases,the

-The above figure shows the market for pizza.The market is in equilibrium when people's incomes decrease.If pizza is a normal good,then which point represents the most likely new price and quantity?

A change in the price of a good ________ its supply curve and ________ a movement along its supply curve.

The law of demand refers to how

Consider the market for feather pillows.If there is an increase in the price of feather dusters,a substitute in production for feather pillows,then

If the price of a DVD falls, i.the demand curve for DVDs will shift rightward. ii.the demand curve for DVDs will not shift. iii.there will be a movement along the demand curve for DVDs.

Oil refiners can refine a barrel of petroleum so that it yields either more home heating oil or more diesel fuel.If the price of diesel fuel falls,there is

Which of the following increases the demand for a good or service?

If both supply and demand decrease by the same amount,the equilibrium price

-The above figure shows the market for pizza.The market is in equilibrium when people learn that eating pizza helps prevent heart disease.What point represents the most likely new price and quantity?

Peanut butter and jelly are complements for many consumers.Consider the market for peanut butter.If there is an increase in the price of jelly,

-Using the data in the table above,if the price of a stapler is $5,then there is a ________ of staplers and the quantity of staplers demanded ________ the quantity of staplers supplied.

In early 2012 the price of computer hard disc drives rose.In a demand and supply model,shifts in what curve or curves could have brought about the higher price?

Why does an increase in supply lead to lower prices?

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

A change in the price of a good its supply curve and a movement along its supply curve.

-Using the data in the table above,if the price of a stapler is $5,then there is a of staplers and the quantity of staplers demanded the quantity of staplers supplied.