Question 1

Both the supply and demand curves can shift due to changes in income.

Accepted Answer

A) True 
 B)False

Question 2

Evan left a job in which he was earning $75,000 a year for one he liked better but pays only $50,000 a year.Around the same time as the job switch,Evan needed to buy a new car.Had he kept his old job he would have bought a new car but instead he was forced to buy a used car.Therefore

Accepted Answer

A) used cars are normal goods for Evan 
B) new cars are inferior goods for Evan 
C) the supply curve for new cars shifted to the left 
D) new and used cars are complements 
E) used cars are inferior goods for Evan 
A) used cars are normal goods for Evan 
B) new cars are inferior goods for Evan 
C) the supply curve for new cars shifted to the left 
D) new and used cars are complements 
E) used cars are inferior goods for Evan

Question 3

Which of the following is the best definition of a spot market?

Accepted Answer

A) A market in which a good is bought or sold with the idea that the price will increase in the future 
B) A market in which a good is bought or sold with the hope that the price will decrease in the future 
C) A market in which prices do not fluctuate up or down very easily 
D) A market in which a good is bought or sold for immediate delivery or consumption 
E) A market in which the good being traded is used to remove spots on clothes 
A) A market in which a good is bought or sold with the idea that the price will increase in the future 
B) A market in which a good is bought or sold with the hope that the price will decrease in the future 
C) A market in which prices do not fluctuate up or down very easily 
D) A market in which a good is bought or sold for immediate delivery or consumption 
E) A market in which the good being traded is used to remove spots on clothes

Question 4

The law of demand says that

Accepted Answer

A) the customer is always right 
B) quantity supplied equals quantity demanded 
C) price and quantity supplied are inversely related 
D) price and quantity demanded are inversely related 
E) income and quantity demanded are directly related 
A) the customer is always right 
B) quantity supplied equals quantity demanded 
C) price and quantity supplied are inversely related 
D) price and quantity demanded are inversely related 
E) income and quantity demanded are directly related

Question 5

An increase in quantity supplied can be caused by a(n)

Accepted Answer

A) decrease in quantity demanded 
B) rise in resource input prices 
C) increase in price 
D) decrease in the number of firms in the market 
E) tax levied on the producer 
A) decrease in quantity demanded 
B) rise in resource input prices 
C) increase in price 
D) decrease in the number of firms in the market 
E) tax levied on the producer

Question 6

-In Figure 3-4,the equilibrium price is

Accepted Answer

A) $5 
B) $4 
C) $3 
D) $1 
E) $0 
A) $5 
B) $4 
C) $3 
D) $1 
E) $0

Question 7

The law of supply says that

Accepted Answer

A) supply and income are inversely related 
B) supply follows demand 
C) quantity supplied equals quantity demanded 
D) price and quantity supplied are inversely related 
E) price and quantity supplied are directly related 
A) supply and income are inversely related 
B) supply follows demand 
C) quantity supplied equals quantity demanded 
D) price and quantity supplied are inversely related 
E) price and quantity supplied are directly related

Question 8

-In Figure 3-11,suppose that initially the market is in equilibrium as defined by the demand and supply curves D₁ and S₁.Which price/quantity combination could result from an increase in consumers' incomes coupled with an improvement in technology?

Accepted Answer

A) $100 and 75,000 
B) $100 and 100,000 
C) $100 and 50,000 
D) $120 and 75,000 
E) $120 and 100,000 
A) $100 and 75,000 
B) $100 and 100,000 
C) $100 and 50,000 
D) $120 and 75,000 
E) $120 and 100,000

Question 9

If the price of leather (an input for leather shoes)increases,the equilibrium price of leather shoes will increase and the equilibrium quantity of leather shoes will decrease.

Accepted Answer

A) True 
 B)False

Question 10

The equilibrium price and quantity of a good,once attained,will

Accepted Answer

A) change only if either supply or demand changes 
B) change only if both supply and demand change 
C) change only if supply changes 
D) change only if demand changes 
E) never change 
A) change only if either supply or demand changes 
B) change only if both supply and demand change 
C) change only if supply changes 
D) change only if demand changes 
E) never change

Question 11

An increase in the price of a particular good,with all other variables constant,causes

Accepted Answer

A) a movement along a given supply curve to a lower quantity supplied 
B) a shift to a different supply curve with lower quantities supplied 
C) a movement along a given supply curve to a higher quantity supplied 
D) a shift to a different supply curve with higher quantities supplied 
E) no movement along a given supply curve unless demand also changes 
A) a movement along a given supply curve to a lower quantity supplied 
B) a shift to a different supply curve with lower quantities supplied 
C) a movement along a given supply curve to a higher quantity supplied 
D) a shift to a different supply curve with higher quantities supplied 
E) no movement along a given supply curve unless demand also changes

Question 12

Figure 3-7
  
-Suppose that the market for DVDs is initially at point A on demand curve D₂ in Figure 3-7.If there is a decrease in the price of DVDs,

Accepted Answer

A) the demand curve will shift to D₂ 
B) equilibrium will move to point B on demand curve D₁ 
C) equilibrium will move to point C on demand curve D₁ 
D) there will be no change from point A 
E) the demand curve will shift to D₃ 
A) the demand curve will shift to D₂ 
B) equilibrium will move to point B on demand curve D₁ 
C) equilibrium will move to point C on demand curve D₁ 
D) there will be no change from point A 
E) the demand curve will shift to D₃

Question 13

Supply curves usually slope upward because producers face increasing opportunity costs when increasing output.

Accepted Answer

A) True 
 B)False

Question 14

Each point along the market demand curve shows

Accepted Answer

A) the quantity of the good that firms would be willing and able to supply at a specific price 
B) the relationship between the price of the good and total quantity demanded at a series of prices 
C) the opportunity cost of supplying a given quantity of goods to the market 
D) the quantity of the good that consumers would be willing and able to purchase at a specific price 
E) how population changes affect the quantity demanded at a specific price 
A) the quantity of the good that firms would be willing and able to supply at a specific price 
B) the relationship between the price of the good and total quantity demanded at a series of prices 
C) the opportunity cost of supplying a given quantity of goods to the market 
D) the quantity of the good that consumers would be willing and able to purchase at a specific price 
E) how population changes affect the quantity demanded at a specific price

Question 15

A decrease in demand coupled with a decrease in supply results in a(n)

Accepted Answer

A) increase in equilibrium price and a decrease in equilibrium quantity 
B) decrease in equilibrium price and a decrease in equilibrium quantity 
C) increase in equilibrium price and a increase in equilibrium quantity 
D) ambiguous effect of equilibrium price and a decrease in equilibrium quantity 
E) ambiguous effect on equilibrium price and a increase in equilibrium quantity 
A) increase in equilibrium price and a decrease in equilibrium quantity 
B) decrease in equilibrium price and a decrease in equilibrium quantity 
C) increase in equilibrium price and a increase in equilibrium quantity 
D) ambiguous effect of equilibrium price and a decrease in equilibrium quantity 
E) ambiguous effect on equilibrium price and a increase in equilibrium quantity

Question 16

Which of the following markets is more likely to be local in nature?

Accepted Answer

A) automobiles 
B) television sets 
C) jewelry 
D) clothing 
E) potato chips 
A) automobiles 
B) television sets 
C) jewelry 
D) clothing 
E) potato chips

Question 17

-Assuming that baseball and football cards are substitutes.What might explain the shift in demand curve for baseball cards from D₂ to D₁ in Figure 3-6?

Accepted Answer

A) an increase in the price of baseball cards 
B) a decrease in the price of baseball cards 
C) an increase in income (assuming that baseball cards are a normal good) 
D) an increase in the population 
E) a decrease in the price of football cards 
A) an increase in the price of baseball cards 
B) a decrease in the price of baseball cards 
C) an increase in income (assuming that baseball cards are a normal good) 
D) an increase in the population 
E) a decrease in the price of football cards

Question 18

If some piece of information causes buyers to expect the price of a good to rise in the future,but sellers take the same information and believe it will have no impact on price,the result is

Accepted Answer

A) a decrease in supply today 
B) an increase in supply today 
C) a decrease in quantity demanded today 
D) an increase in demand today 
E) an increase in quantity demanded today 
A) a decrease in supply today 
B) an increase in supply today 
C) a decrease in quantity demanded today 
D) an increase in demand today 
E) an increase in quantity demanded today

Question 19

Orange juice and cranberry juice are substitute goods.An increase in the price of orange juice results in a(n)

Accepted Answer

A) increase in the demand for orange juice 
B) increase in the supply of cranberry juice 
C) increase in the quantity demanded of orange juice 
D) increase in the demand for cranberry juice 
E) decrease in the quantity demanded of cranberry juice 
A) increase in the demand for orange juice 
B) increase in the supply of cranberry juice 
C) increase in the quantity demanded of orange juice 
D) increase in the demand for cranberry juice 
E) decrease in the quantity demanded of cranberry juice

Question 20

If the demand for baseball cards rises and the supply curve does not shift,then the price

Accepted Answer

A) will rise and quantity will fall 
B) and quantity will rise 
C) will fall and quantity will rise 
D) and quantity will fall 
E) will rise,but quantity may rise or fall 
A) will rise and quantity will fall 
B) and quantity will rise 
C) will fall and quantity will rise 
D) and quantity will fall 
E) will rise,but quantity may rise or fall

Both the supply and demand curves can shift due to changes in income.

Evan left a job in which he was earning $75,000 a year for one he liked better but pays only $50,000 a year.Around the same time as the job switch,Evan needed to buy a new car.Had he kept his old job he would have bought a new car but instead he was forced to buy a used car.Therefore

Which of the following is the best definition of a spot market?

The law of demand says that

An increase in quantity supplied can be caused by a(n)

-In Figure 3-4,the equilibrium price is

The law of supply says that

-In Figure 3-11,suppose that initially the market is in equilibrium as defined by the demand and supply curves D₁ and S₁.Which price/quantity combination could result from an increase in consumers' incomes coupled with an improvement in technology?

If the price of leather (an input for leather shoes)increases,the equilibrium price of leather shoes will increase and the equilibrium quantity of leather shoes will decrease.

The equilibrium price and quantity of a good,once attained,will

An increase in the price of a particular good,with all other variables constant,causes

Figure 3-7 -Suppose that the market for DVDs is initially at point A on demand curve D₂ in Figure 3-7.If there is a decrease in the price of DVDs,

Supply curves usually slope upward because producers face increasing opportunity costs when increasing output.

Each point along the market demand curve shows

A decrease in demand coupled with a decrease in supply results in a(n)

Which of the following markets is more likely to be local in nature?

-Assuming that baseball and football cards are substitutes.What might explain the shift in demand curve for baseball cards from D₂ to D₁ in Figure 3-6?

If some piece of information causes buyers to expect the price of a good to rise in the future,but sellers take the same information and believe it will have no impact on price,the result is

Orange juice and cranberry juice are substitute goods.An increase in the price of orange juice results in a(n)

If the demand for baseball cards rises and the supply curve does not shift,then the price

What Is Economics

Scarcity, choice, and Economic Systems

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters

Exam 3: Supply and Demand

Both the supply and demand curves can shift due to changes in income.

Evan left a job in which he was earning $75,000 a year for one he liked better but pays only $50,000 a year.Around the same time as the job switch,Evan needed to buy a new car.Had he kept his old job he would have bought a new car but instead he was forced to buy a used car.Therefore

Which of the following is the best definition of a spot market?

The law of demand says that

An increase in quantity supplied can be caused by a(n)

-In Figure 3-4,the equilibrium price is

The law of supply says that

-In Figure 3-11,suppose that initially the market is in equilibrium as defined by the demand and supply curves D₁ and S₁.Which price/quantity combination could result from an increase in consumers' incomes coupled with an improvement in technology?

If the price of leather (an input for leather shoes)increases,the equilibrium price of leather shoes will increase and the equilibrium quantity of leather shoes will decrease.

The equilibrium price and quantity of a good,once attained,will

An increase in the price of a particular good,with all other variables constant,causes

Figure 3-7 -Suppose that the market for DVDs is initially at point A on demand curve D₂ in Figure 3-7.If there is a decrease in the price of DVDs,

Supply curves usually slope upward because producers face increasing opportunity costs when increasing output.

Each point along the market demand curve shows

A decrease in demand coupled with a decrease in supply results in a(n)

Which of the following markets is more likely to be local in nature?

-Assuming that baseball and football cards are substitutes.What might explain the shift in demand curve for baseball cards from D₂ to D₁ in Figure 3-6?

If some piece of information causes buyers to expect the price of a good to rise in the future,but sellers take the same information and believe it will have no impact on price,the result is

Orange juice and cranberry juice are substitute goods.An increase in the price of orange juice results in a(n)

If the demand for baseball cards rises and the supply curve does not shift,then the price

What Is Economics

Scarcity, choice, and Economic Systems

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters