Question 1

The new method of tapping maple trees ________ the supply of maple syrup and ________ the quantity supplied of maple syrup.

Accepted Answer

A) increases; does not change 
B) increases; increases 
C) does not change; increases 
D) does not change; does not change 
E) does not change; decreases 
A) increases; does not change 
B) increases; increases 
C) does not change; increases 
D) does not change; does not change 
E) does not change; decreases

Question 2

Which of the following events leads to a rise in the price of oranges?

Accepted Answer

A) a rise in the price of apples if apples and oranges are substitutes 
B) a scientific discovery that oranges cause hair loss 
C) a decrease in income if oranges are a normal good 
D) good growing weather in Florida 
E) a technological improvement in the production of oranges 
A) a rise in the price of apples if apples and oranges are substitutes 
B) a scientific discovery that oranges cause hair loss 
C) a decrease in income if oranges are a normal good 
D) good growing weather in Florida 
E) a technological improvement in the production of oranges

Question 3

A relative price is all of the following except

Accepted Answer

A) the ratio of one price to another. 
B) an opportunity cost. 
C) a quantity of a "basket" of goods and services forgone. 
D) determined by demand and supply. 
E) the lowest possible price available. 
A) the ratio of one price to another. 
B) an opportunity cost. 
C) a quantity of a "basket" of goods and services forgone. 
D) determined by demand and supply. 
E) the lowest possible price available.

Question 4

Use the table below to answer the following questions.
Table 3.5.1
The Market for Car-Seat Heaters
  
-Refer to Table 3.5.1. Suppose the cost of production rises, causing supply to decrease by 100 units at each price. The new equilibrium price is $________ and equilibrium quantity is ________ units.

Accepted Answer

A) 70; 450 
B) 70; 350 
C) 50; 450 
D) 50; 350 
E) 60; 400 
A) 70; 450 
B) 70; 350 
C) 50; 450 
D) 50; 350 
E) 60; 400

Question 5

Which one of the following correctly describes how price adjustment eliminates a shortage?

Accepted Answer

A) As the price rises, the quantity demanded decreases and the quantity supplied increases. 
B) As the price rises, the quantity demanded increases and the quantity supplied decreases. 
C) As the price falls, the quantity demanded decreases and the quantity supplied increases. 
D) As the price falls, the quantity demanded increases and the quantity supplied decreases. 
E) As the price falls, the quantity demanded increases and the quantity supplied increases. 
A) As the price rises, the quantity demanded decreases and the quantity supplied increases. 
B) As the price rises, the quantity demanded increases and the quantity supplied decreases. 
C) As the price falls, the quantity demanded decreases and the quantity supplied increases. 
D) As the price falls, the quantity demanded increases and the quantity supplied decreases. 
E) As the price falls, the quantity demanded increases and the quantity supplied increases.

Question 6

The relative price of a good is all of the following except

Accepted Answer

A) the ratio of one price to another. 
B) an opportunity cost. 
C) the money price of the good divided by a price index. 
D) the same as the money price of a good. 
E) determined in a market. 
A) the ratio of one price to another. 
B) an opportunity cost. 
C) the money price of the good divided by a price index. 
D) the same as the money price of a good. 
E) determined in a market.

Question 7

If we observe a decrease in the equilibrium quantity of good A, we know that

Accepted Answer

A) either the demand for A has increased or the supply of A has decreased or both. 
B) either the demand for A has increased or the supply of A has increased or both. 
C) either the demand for A has decreased or the supply of A has increased or both. 
D) either the demand for A has decreased or the supply of A has decreased or both. 
E) the price of A has fallen. 
A) either the demand for A has increased or the supply of A has decreased or both. 
B) either the demand for A has increased or the supply of A has increased or both. 
C) either the demand for A has decreased or the supply of A has increased or both. 
D) either the demand for A has decreased or the supply of A has decreased or both. 
E) the price of A has fallen.

Question 8

If A and B are complements and the cost of a factor of production used in the production of A decreases, then the price of

Accepted Answer

A) both A and B will rise. 
B) both A and B will fall. 
C) A will fall and the price of B will rise. 
D) A will rise and the price of B will fall. 
E) A will fall and the price of B will remain unchanged. 
A) both A and B will rise. 
B) both A and B will fall. 
C) A will fall and the price of B will rise. 
D) A will rise and the price of B will fall. 
E) A will fall and the price of B will remain unchanged.

Question 9

William Gregg owned a mill in South Carolina. In December 1862, he placed a notice in the Edgehill Advertiser announcing his willingness to exchange cloth for food and other items. Here is an extract: 1 yard of cloth for 1 pound of bacon
2 yards of cloth for 1 pound of butter
4 yards of cloth for 1 pound of wool
8 yards of cloth for 1 bushel of salt
If the money price of bacon was 20¢ a pound and the money price of salt was $2.00 a bushel, people would

Accepted Answer

A) buy bacon and trade it for cloth because they could buy 8 yards of cloth for only $1.60, and use that cloth to obtain a bushel of salt. 
B) not buy bacon and trade it for cloth because they would have to buy 8 yards of cloth for $1.60 and then give Mr. Gregg an extra $0.40 to buy a bushel of salt. 
C) buy bacon and trade it for cloth and then trade the cloth for salt because salt is more important for life than either cloth or bacon. 
D) not buy bacon and trade it for cloth because the relative price of 1 bushel of salt is only 1/8 yard of cloth. 
E) buy bacon and trade it for cloth because cloth is more expensive than bacon. 
A) buy bacon and trade it for cloth because they could buy 8 yards of cloth for only $1.60, and use that cloth to obtain a bushel of salt. 
B) not buy bacon and trade it for cloth because they would have to buy 8 yards of cloth for $1.60 and then give Mr. Gregg an extra $0.40 to buy a bushel of salt. 
C) buy bacon and trade it for cloth and then trade the cloth for salt because salt is more important for life than either cloth or bacon. 
D) not buy bacon and trade it for cloth because the relative price of 1 bushel of salt is only 1/8 yard of cloth. 
E) buy bacon and trade it for cloth because cloth is more expensive than bacon.

Question 10

Use the figure below to answer the following questions.
   
Figure 3.5.2
Original equilibrium at 1.
-Refer to Figure 3.5.2, which represents the market for tacos. A new scientific study reveals that tacos cause bad breath. Simultaneously, the cost of producing tacos decreases. What is the new equilibrium, ceteris paribus?

Accepted Answer

A) 2 
B) 3 
C) 9 
D) 4 
E) 7 
A) 2 
B) 3 
C) 9 
D) 4 
E) 7

Question 11

A decrease in the quantity supplied of a good is shown by

Accepted Answer

A) a movement down along the supply curve. 
B) a leftward shift of the supply curve. 
C) a movement up along the supply curve. 
D) a rightward shift of the supply curve. 
E) an initial rightward shift and then leftward shift of the supply curve. 
A) a movement down along the supply curve. 
B) a leftward shift of the supply curve. 
C) a movement up along the supply curve. 
D) a rightward shift of the supply curve. 
E) an initial rightward shift and then leftward shift of the supply curve.

Question 12

Use the figure below to answer the following questions.
   
Figure 3.4.2
-At a price of $4 a unit in Figure 3.4.2,

Accepted Answer

A) the equilibrium quantity is 400 units. 
B) there is a surplus of 200 units. 
C) the quantity supplied is 400 units. 
D) there is a shortage of 200 units. 
E) the quantity demanded is 200 units. 
A) the equilibrium quantity is 400 units. 
B) there is a surplus of 200 units. 
C) the quantity supplied is 400 units. 
D) there is a shortage of 200 units. 
E) the quantity demanded is 200 units.

Question 13

Use the table below to answer the following questions.
Table 3.4.1
  
-Refer to Table 3.4.1. If the price is $7, then the surplus is

Accepted Answer

A) 360 units. 
B) 400 units. 
C) 160 units. 
D) zero units. 
E) 290 units. 
A) 360 units. 
B) 400 units. 
C) 160 units. 
D) zero units. 
E) 290 units.

Question 14

A shift of the supply curve for rutabagas occurs if there is

Accepted Answer

A) a change in preferences for rutabagas. 
B) a change in the price of a related good that is a substitute for rutabagas. 
C) a change in income. 
D) a change in the price of rutabagas. 
E) none of the above 
A) a change in preferences for rutabagas. 
B) a change in the price of a related good that is a substitute for rutabagas. 
C) a change in income. 
D) a change in the price of rutabagas. 
E) none of the above

Question 15

A turnip is an inferior good if

Accepted Answer

A) an increase in the price of a turnip decreases the quantity of turnips that consumers want to buy. 
B) an increase in income decreases the demand for turnips. 
C) an increase in income increases the demand for turnips. 
D) turnips violate the law of demand. 
E) turnips are a low quality good. 
A) an increase in the price of a turnip decreases the quantity of turnips that consumers want to buy. 
B) an increase in income decreases the demand for turnips. 
C) an increase in income increases the demand for turnips. 
D) turnips violate the law of demand. 
E) turnips are a low quality good.

Question 16

Use the figure below to answer the following questions.
   
Figure 3.2.2
-Which one of the following would result in the demand curve shifting from D₁ to D₂ in Figure 3.2.2?

Accepted Answer

A) an increase in the supply of pizza 
B) a rise in the price of hamburgers, a substitute for pizza 
C) a rise in the price of pizza 
D) a fall in the price of pizza 
E) a rise in the price of Coke, a complement of pizza 
A) an increase in the supply of pizza 
B) a rise in the price of hamburgers, a substitute for pizza 
C) a rise in the price of pizza 
D) a fall in the price of pizza 
E) a rise in the price of Coke, a complement of pizza

Question 17

A decrease in quantity demanded is represented by a

Accepted Answer

A) rightward shift of the supply curve. 
B) rightward shift of the demand curve. 
C) leftward shift of the demand curve. 
D) movement upward and to the left along the demand curve. 
E) movement downward and to the right along the demand curve. 
A) rightward shift of the supply curve. 
B) rightward shift of the demand curve. 
C) leftward shift of the demand curve. 
D) movement upward and to the left along the demand curve. 
E) movement downward and to the right along the demand curve.

Question 18

If demand increases and supply decreases, then the

Accepted Answer

A) equilibrium quantity increases but the effect on the equilibrium price is unknown. 
B) equilibrium quantity decreases but the effect on the equilibrium price is unknown. 
C) equilibrium price falls but the effect on the equilibrium quantity is unknown. 
D) equilibrium price rises but the effect on the equilibrium quantity is unknown. 
E) effect on both equilibrium price and quantity is unknown. 
A) equilibrium quantity increases but the effect on the equilibrium price is unknown. 
B) equilibrium quantity decreases but the effect on the equilibrium price is unknown. 
C) equilibrium price falls but the effect on the equilibrium quantity is unknown. 
D) equilibrium price rises but the effect on the equilibrium quantity is unknown. 
E) effect on both equilibrium price and quantity is unknown.

Question 19

Suppose the price of a football is $20.00 and the price of a basketball is $10.00. The ________ of a football is ________.

Accepted Answer

A) relative price; 2 basketballs per football 
B) relative price; 1/2 basketball per football 
C) opportunity cost; $15.00 
D) opportunity cost; $10.00 
E) relative price; $10 
A) relative price; 2 basketballs per football 
B) relative price; 1/2 basketball per football 
C) opportunity cost; $15.00 
D) opportunity cost; $10.00 
E) relative price; $10

Question 20

Which market is an example of a market for goods?

Accepted Answer

A) labour market 
B) haircut market 
C) manufactured input market 
D) apple market 
E) energy market 
A) labour market 
B) haircut market 
C) manufactured input market 
D) apple market 
E) energy market

Exam 3: Demand and Supply

The new method of tapping maple trees ________ the supply of maple syrup and ________ the quantity supplied of maple syrup.

Which of the following events leads to a rise in the price of oranges?

A relative price is all of the following except

Use the table below to answer the following questions. Table 3.5.1 The Market for Car-Seat Heaters -Refer to Table 3.5.1. Suppose the cost of production rises, causing supply to decrease by 100 units at each price. The new equilibrium price is $________ and equilibrium quantity is ________ units.

Which one of the following correctly describes how price adjustment eliminates a shortage?

The relative price of a good is all of the following except

If we observe a decrease in the equilibrium quantity of good A, we know that

If A and B are complements and the cost of a factor of production used in the production of A decreases, then the price of

A decrease in the quantity supplied of a good is shown by

Use the figure below to answer the following questions. Figure 3.4.2 -At a price of $4 a unit in Figure 3.4.2,

Use the table below to answer the following questions. Table 3.4.1 -Refer to Table 3.4.1. If the price is $7, then the surplus is

A shift of the supply curve for rutabagas occurs if there is

A turnip is an inferior good if

Use the figure below to answer the following questions. Figure 3.2.2 -Which one of the following would result in the demand curve shifting from D₁ to D₂ in Figure 3.2.2?

A decrease in quantity demanded is represented by a

If demand increases and supply decreases, then the

Suppose the price of a football is $20.00 and the price of a basketball is $10.00. The ________ of a football is ________.

Which market is an example of a market for goods?

What Is Economics

The Economic Problem

Elasticity

Efficiency and Equity

Governments Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

Macro Only: International Trade Policy

Filters

The new method of tapping maple trees the supply of maple syrup and the quantity supplied of maple syrup.

Use the table below to answer the following questions. Table 3.5.1 The Market for Car-Seat Heaters -Refer to Table 3.5.1. Suppose the cost of production rises, causing supply to decrease by 100 units at each price. The new equilibrium price is $ and equilibrium quantity is units.

Suppose the price of a football is $20.00 and the price of a basketball is $10.00. The of a football is .