Question 1

When demand increases,

Accepted Answer

A)  consumers are willing to buy more at any price. 
B)  consumers buy more of the good only if its price falls. 
C)  the price is lower at any level of quantity demanded. 
D)  consumers buy more of the good only if its price rises. 
E)  the demand curve shifts leftward. 
A)  consumers are willing to buy more at any price. 
B)  consumers buy more of the good only if its price falls. 
C)  the price is lower at any level of quantity demanded. 
D)  consumers buy more of the good only if its price rises. 
E)  the demand curve shifts leftward.

Question 2

Suppose the price of leather used to produce shoes increases.The higher price of leather ________ the supply of shoes and the supply curve of shoes ________.

Accepted Answer

A)  increases; shifts rightward 
B)  increases; shifts leftward 
C)  decreases; shifts rightward 
D)  decreases; shifts leftward 
E)  does not change; does not shift 
A)  increases; shifts rightward 
B)  increases; shifts leftward 
C)  decreases; shifts rightward 
D)  decreases; shifts leftward 
E)  does not change; does not shift

Question 3

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

Accepted Answer

A)  an increase in the price of NetFlix, a substitute for movies 
B)  an increase in the price of movie tickets 
C)  a decrease in the price of move tickets 
D)  an increase in movie star salaries 
E)  an increase in the price of HDTV sets 
A)  an increase in the price of NetFlix, a substitute for movies 
B)  an increase in the price of movie tickets 
C)  a decrease in the price of move tickets 
D)  an increase in movie star salaries 
E)  an increase in the price of HDTV sets

Question 4

-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 consumers' preferences for corn 
B)  an increase in consumers' income if corn is a normal good 
C)  an increase in labor costs of producing corn 
D)  an improvement in the technology of producing corn 
E)  an increase in consumers' income if corn is an inferior good 
A)  an increase in consumers' preferences for corn 
B)  an increase in consumers' income if corn is a normal good 
C)  an increase in labor costs of producing corn 
D)  an improvement in the technology of producing corn 
E)  an increase in consumers' income if corn is an inferior good

Question 5

A market is defined as

Accepted Answer

A)  a physical place where people buy only goods. 
B)  a physical place where people buy both goods and services. 
C)  a store where people buy physical goods. 
D)  any arrangement that brings buyers and sellers together. 
E)  a place where one good is bartered for another. 
A)  a physical place where people buy only goods. 
B)  a physical place where people buy both goods and services. 
C)  a store where people buy physical goods. 
D)  any arrangement that brings buyers and sellers together. 
E)  a place where one good is bartered for another.

Question 6

The law of supply states that,other things remaining the same,

Accepted Answer

A)  demand increases when supply increases. 
B)  if the price of a good increases, firms buy less of it. 
C)  if the price of a good increases, the quantity supplied increases. 
D)  as people's income increase, the supply of goods increases. 
E)  if the price of a good increases, the supply increases. 
A)  demand increases when supply increases. 
B)  if the price of a good increases, firms buy less of it. 
C)  if the price of a good increases, the quantity supplied increases. 
D)  as people's income increase, the supply of goods increases. 
E)  if the price of a good increases, the supply increases.

Question 7

If both the supply and demand curves shift simultaneously,we can always predict what will happen to

Accepted Answer

A)  both the price and the quantity. 
B)  either the price or the quantity, but not both. 
C)  only the price. 
D)  only the quantity. 
E)  neither the price nor the quantity. 
A)  both the price and the quantity. 
B)  either the price or the quantity, but not both. 
C)  only the price. 
D)  only the quantity. 
E)  neither the price nor the quantity.

Question 8

-The above figure shows the market for pizza.The market is in equilibrium when new pizza firms enter the market.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 9

Suppose the government imposes a small carbon tax on automakers.But the price of gasoline has doubled due to a Middle East crisis which has reduced oil production.In the market for autos,these changes mean that supply and demand have both changed with the effect on the demand larger than the effect on the supply.The result is that the price of autos will ________ and the number of autos sold will ________.

Accepted Answer

A)  rise; perhaps change but we can't say if it increases, decreases, or stays the same 
B)  rise; increase 
C)  rise; decrease 
D)  fall; perhaps change but we can't say if it increases, decreases, or stays the same 
E)  fall; decrease 
A)  rise; perhaps change but we can't say if it increases, decreases, or stays the same 
B)  rise; increase 
C)  rise; decrease 
D)  fall; perhaps change but we can't say if it increases, decreases, or stays the same 
E)  fall; decrease

Question 10

If consumers buy a large number of plug-in electric cars,the equilibrium price of electricity will ________ and the equilibrium quantity of electricity will ________.

Accepted Answer

A)  rise; increase 
B)  rise; decrease 
C)  fall; increase 
D)  fall; decrease 
E)  not change; increase 
A)  rise; increase 
B)  rise; decrease 
C)  fall; increase 
D)  fall; decrease 
E)  not change; increase

Question 11

The "law of demand" refers to the fact that,other things remaining the same,when the price of a good rises,

Accepted Answer

A)  the demand curve shifts rightward. 
B)  the demand curve shifts leftward. 
C)  there is a movement down along the demand curve to a larger quantity demanded. 
D)  there is a movement up along the demand curve to a smaller quantity demanded. 
E)  the demand curve shifts rightward and there is a movement up along the demand curve to a smaller quantity demanded. 
A)  the demand curve shifts rightward. 
B)  the demand curve shifts leftward. 
C)  there is a movement down along the demand curve to a larger quantity demanded. 
D)  there is a movement up along the demand curve to a smaller quantity demanded. 
E)  the demand curve shifts rightward and there is a movement up along the demand curve to a smaller quantity demanded.

Question 12

You are just about to finish college and are about to start a high paying job.Because of this new job,what is the most likely outcome in the market for cars?

Accepted Answer

A)  Your demand for cars will decrease. 
B)  The market supply of cars will increase. 
C)  Your demand for cars will increase. 
D)  The market supply of cars will decrease. 
E)  The demand and the supply for cars will decrease. 
A)  Your demand for cars will decrease. 
B)  The market supply of cars will increase. 
C)  Your demand for cars will increase. 
D)  The market supply of cars will decrease. 
E)  The demand and the supply for cars will decrease.

Question 13

-Pizza is a normal good.In the above figure,the shift in the demand curve from D to D₂ can be the result of

Accepted Answer

A)  a decrease in the price of soda, a complement to pizza. 
B)  an increase in the price of hamburgers, a substitute for pizza. 
C)  a decrease in income. 
D)  a study that shows that pizza is a very healthy food. 
E)  an increase in the cost of producing pizza. 
A)  a decrease in the price of soda, a complement to pizza. 
B)  an increase in the price of hamburgers, a substitute for pizza. 
C)  a decrease in income. 
D)  a study that shows that pizza is a very healthy food. 
E)  an increase in the cost of producing pizza.

Question 14

If macaroni and cheese is an inferior good,then a decrease in income results in

Accepted Answer

A)  an increase in the demand for macaroni and cheese. 
B)  a decrease in the demand for macaroni and cheese. 
C)  an increase in the supply of macaroni and cheese. 
D)  a decrease in the supply of macaroni and cheese. 
E)  Both answers A and D are correct. 
A)  an increase in the demand for macaroni and cheese. 
B)  a decrease in the demand for macaroni and cheese. 
C)  an increase in the supply of macaroni and cheese. 
D)  a decrease in the supply of macaroni and cheese. 
E)  Both answers A and D are correct.

Question 15

Consider the market for smart phones.Which of the following shifts the demand curve rightward?

Accepted Answer

A)  an increase in the price of smart phones 
B)  a decrease in the price of smart phones 
C)  an increase in the price of land-line phone service, a substitute for smart phones 
D)  a decrease in the number of smart phone buyers 
E)  an increase in the supply of smart phones. 
A)  an increase in the price of smart phones 
B)  a decrease in the price of smart phones 
C)  an increase in the price of land-line phone service, a substitute for smart phones 
D)  a decrease in the number of smart phone buyers 
E)  an increase in the supply of smart phones.

Question 16

-Which figure above shows the effect of a technological advance in the production of pizza?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  Both Figure A and Figure D 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  Both Figure A and Figure D

Question 17

-The above figure shows the market for game day t-shirts.If the price of t-shirts is $8,then

Accepted Answer

A)  the market is in equilibrium. 
B)  there is a surplus and the price of t-shirts will rise. 
C)  the quantity demanded is greater than quantity supplied. 
D)  there is a shortage and the price of t-shirts will fall. 
E)  there is a surplus and the price of t-shirts will fall. 
A)  the market is in equilibrium. 
B)  there is a surplus and the price of t-shirts will rise. 
C)  the quantity demanded is greater than quantity supplied. 
D)  there is a shortage and the price of t-shirts will fall. 
E)  there is a surplus and the price of t-shirts will fall.

Question 18

-In the above figure,the shift in the demand curve from D to D₁ can be the result of

Accepted Answer

A)  a decrease in income if pizza is a normal good. 
B)  a decrease in the price of a sub sandwich, a substitute for pizza. 
C)  an increase in the price of soda, a complement to pizza. 
D)  an increase in the number of teenagers, all of whom demand more pizza than do other age groups. 
E)  new technology that increases the profit from producing pizza. 
A)  a decrease in income if pizza is a normal good. 
B)  a decrease in the price of a sub sandwich, a substitute for pizza. 
C)  an increase in the price of soda, a complement to pizza. 
D)  an increase in the number of teenagers, all of whom demand more pizza than do other age groups. 
E)  new technology that increases the profit from producing pizza.

Question 19

Suppose that the equilibrium price and quantity of new houses both increase.Which of the following could be a cause of this change?

Accepted Answer

A)  The wage paid carpenters who build new houses might have risen. 
B)  A technological advance in framing a new house might have occurred. 
C)  The rent for nearby apartments might have fallen. 
D)  More home buyers might have moved into the area. 
E)  The cost of wood framing used to build houses might have fallen. 
A)  The wage paid carpenters who build new houses might have risen. 
B)  A technological advance in framing a new house might have occurred. 
C)  The rent for nearby apartments might have fallen. 
D)  More home buyers might have moved into the area. 
E)  The cost of wood framing used to build houses might have fallen.

Question 20

Soft drinks are a normal good.Draw a graph showing the effect of an increase in income on the demand for soft drinks.

Accepted Answer

The answer of Soft drinks are a normal good.Draw a...

When demand increases,

Suppose the price of leather used to produce shoes increases.The higher price of leather the supply of shoes and the supply curve of shoes .

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

-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?

A market is defined as

The law of supply states that,other things remaining the same,

If both the supply and demand curves shift simultaneously,we can always predict what will happen to

-The above figure shows the market for pizza.The market is in equilibrium when new pizza firms enter the market.What point represents the most likely new price and quantity?

If consumers buy a large number of plug-in electric cars,the equilibrium price of electricity will and the equilibrium quantity of electricity will .

The "law of demand" refers to the fact that,other things remaining the same,when the price of a good rises,

You are just about to finish college and are about to start a high paying job.Because of this new job,what is the most likely outcome in the market for cars?

-Pizza is a normal good.In the above figure,the shift in the demand curve from D to D₂ can be the result of

If macaroni and cheese is an inferior good,then a decrease in income results in

Consider the market for smart phones.Which of the following shifts the demand curve rightward?

-Which figure above shows the effect of a technological advance in the production of pizza?

-The above figure shows the market for game day t-shirts.If the price of t-shirts is $8,then

-In the above figure,the shift in the demand curve from D to D₁ can be the result of

Suppose that the equilibrium price and quantity of new houses both increase.Which of the following could be a cause of this change?

Soft drinks are a normal good.Draw a graph showing the effect of an increase in income on the demand for soft drinks.

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

When demand increases,

Suppose the price of leather used to produce shoes increases.The higher price of leather ________ the supply of shoes and the supply curve of shoes ________.

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

-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?

A market is defined as

The law of supply states that,other things remaining the same,

If both the supply and demand curves shift simultaneously,we can always predict what will happen to

-The above figure shows the market for pizza.The market is in equilibrium when new pizza firms enter the market.What point represents the most likely new price and quantity?

If consumers buy a large number of plug-in electric cars,the equilibrium price of electricity will ________ and the equilibrium quantity of electricity will ________.

The "law of demand" refers to the fact that,other things remaining the same,when the price of a good rises,

You are just about to finish college and are about to start a high paying job.Because of this new job,what is the most likely outcome in the market for cars?

-Pizza is a normal good.In the above figure,the shift in the demand curve from D to D₂ can be the result of

If macaroni and cheese is an inferior good,then a decrease in income results in

Consider the market for smart phones.Which of the following shifts the demand curve rightward?

-Which figure above shows the effect of a technological advance in the production of pizza?

-The above figure shows the market for game day t-shirts.If the price of t-shirts is $8,then

-In the above figure,the shift in the demand curve from D to D₁ can be the result of

Suppose that the equilibrium price and quantity of new houses both increase.Which of the following could be a cause of this change?

Soft drinks are a normal good.Draw a graph showing the effect of an increase in income on the demand for soft drinks.

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

Suppose the price of leather used to produce shoes increases.The higher price of leather the supply of shoes and the supply curve of shoes .

If consumers buy a large number of plug-in electric cars,the equilibrium price of electricity will and the equilibrium quantity of electricity will .