Question 1

If A is an inferior good and consumer income rises, the demand for A

Accepted Answer

A) increases, and the equilibrium price and the equilibrium quantity increase. 
B) increases and the equilibrium price rises, but the equilibrium quantity decreases. 
C) decreases, and the equilibrium price and the equilibrium quantity decrease. 
D) decreases and the equilibrium price falls, but the equilibrium quantity increases. 
E) decreases, the equilibrium price rises, and the equilibrium quantity decreases. 
A) increases, and the equilibrium price and the equilibrium quantity increase. 
B) increases and the equilibrium price rises, but the equilibrium quantity decreases. 
C) decreases, and the equilibrium price and the equilibrium quantity decrease. 
D) decreases and the equilibrium price falls, but the equilibrium quantity increases. 
E) decreases, the equilibrium price rises, and the equilibrium quantity decreases.

Question 2

If A and B are complements in production and the price of A falls, the supply of B

Accepted Answer

A) increases, and the price of B rises. 
B) increases, and the price of B falls. 
C) decreases, and the price of B falls. 
D) decreases, and the price of B rises. 
E) does not change. 
A) increases, and the price of B rises. 
B) increases, and the price of B falls. 
C) decreases, and the price of B falls. 
D) decreases, and the price of B rises. 
E) does not change.

Question 3

Use the table below to answer the following questions.
Table 3.1.1
  
-Refer to Table 3.1.1. Between 2012 and 2013, the price of coffee relative to the price of tea ________ while the price of coffee relative to the price of cola ________.

Accepted Answer

A) rose; rose 
B) rose; fell 
C) fell; rose 
D) fell; fell 
E) fell; stayed constant 
A) rose; rose 
B) rose; fell 
C) fell; rose 
D) fell; fell 
E) fell; stayed constant

Question 4

If A and B are substitutes and the price of A rises, we will observe

Accepted Answer

A) an increase in the equilibrium price and the equilibrium quantity of B. 
B) a decrease in the equilibrium price and the equilibrium quantity of B. 
C) an increase in the equilibrium price but a decrease in the equilibrium quantity of B. 
D) a decrease in equilibrium price but an increase in the equilibrium quantity of B. 
E) a decrease in the demand for A. 
A) an increase in the equilibrium price and the equilibrium quantity of B. 
B) a decrease in the equilibrium price and the equilibrium quantity of B. 
C) an increase in the equilibrium price but a decrease in the equilibrium quantity of B. 
D) a decrease in equilibrium price but an increase in the equilibrium quantity of B. 
E) a decrease in the demand for A.

Question 5

How many sides does a market have?

Accepted Answer

A) one side - buyers 
B) one side - sellers 
C) two sides - buyers and sellers 
D) three sides - buyers, sellers, and the government 
E) two sides - domestic and foreign 
A) one side - buyers 
B) one side - sellers 
C) two sides - buyers and sellers 
D) three sides - buyers, sellers, and the government 
E) two sides - domestic and foreign

Question 6

Good A is a normal good if

Accepted Answer

A) a rise in the price of a complement causes the demand for A to decrease. 
B) income and the demand for A are negatively related. 
C) a rise in the price of a substitute causes the demand for A to increase. 
D) the demand for A increases when income rises. 
E) good A satisfies the law of demand. 
A) a rise in the price of a complement causes the demand for A to decrease. 
B) income and the demand for A are negatively related. 
C) a rise in the price of a substitute causes the demand for A to increase. 
D) the demand for A increases when income rises. 
E) good A satisfies the law of demand.

Question 7

The demand curve is P = 700 - 20QD. The supply curve is P = 300 + 20QS. At market equilibrium, the equilibrium quantity is ________ and the equilibrium price is ________.

Accepted Answer

A) 10; 500 
B) 500; 10 
C) 0.10; 20 
D) 20; 0.10 
E) 400; 40 
A) 10; 500 
B) 500; 10 
C) 0.10; 20 
D) 20; 0.10 
E) 400; 40

Question 8

If the number of suppliers of good Y increases, then

Accepted Answer

A) a movement up along the supply curve of good Y will occur. 
B) a movement down along the supply curve of good Y will occur. 
C) the supply curve of good Y shifts rightward. 
D) the supply curve of good Y shifts leftward. 
E) the supply curve of good Y will remain unchanged. 
A) a movement up along the supply curve of good Y will occur. 
B) a movement down along the supply curve of good Y will occur. 
C) the supply curve of good Y shifts rightward. 
D) the supply curve of good Y shifts leftward. 
E) the supply curve of good Y will remain unchanged.

Question 9

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 beans. If the price of peas, a substitute for beans in production, rises, what is the new beans equilibrium, ceteris paribus?

Accepted Answer

A) 8 
B) 3 
C) 9 
D) 5 
E) 6 
A) 8 
B) 3 
C) 9 
D) 5 
E) 6

Question 10

Use the figure below to answer the following questions.
Table 3.5.2
Demand and Supply Schedules for Cups of Coffee each day at CoolU
  
-Refer to Table 3.5.2. If the price is set at $1.30 per cup, there is ________ leading to a price ________.

Accepted Answer

A) a shortage; rise 
B) a shortage; fall 
C) a surplus; rise 
D) a surplus; fall 
E) an equilibrium; rise 
A) a shortage; rise 
B) a shortage; fall 
C) a surplus; rise 
D) a surplus; fall 
E) an equilibrium; rise

Question 11

If a turnip is an inferior good, then, ceteris paribus, an increase in the price of a turnip will

Accepted Answer

A) decrease the demand for turnips. 
B) increase the demand for turnips. 
C) decrease the supply of turnips. 
D) increase the supply of turnips. 
E) decrease the quantity of turnips demanded. 
A) decrease the demand for turnips. 
B) increase the demand for turnips. 
C) decrease the supply of turnips. 
D) increase the supply of turnips. 
E) decrease the quantity of turnips demanded.

Question 12

Which one of the following will definitely decrease the equilibrium quantity?

Accepted Answer

A) an increase in both demand and supply 
B) a decrease in both demand and supply 
C) an increase in demand combined with a decrease in supply 
D) a decrease in demand combined with an increase in supply 
E) an increase in price 
A) an increase in both demand and supply 
B) a decrease in both demand and supply 
C) an increase in demand combined with a decrease in supply 
D) a decrease in demand combined with an increase in supply 
E) an increase in price

Question 13

French fries and baked potatoes are

Accepted Answer

A) complements for consumers and complements in production for producers. 
B) substitutes for consumers and substitutes in production for producers. 
C) complements for consumers and substitutes in production for producers. 
D) substitutes in production for consumers and inferior goods for producers. 
E) normal goods for consumers and complements for producers. 
A) complements for consumers and complements in production for producers. 
B) substitutes for consumers and substitutes in production for producers. 
C) complements for consumers and substitutes in production for producers. 
D) substitutes in production for consumers and inferior goods for producers. 
E) normal goods for consumers and complements for producers.

Question 14

The kitchen manager at an Italian restaurant is deciding what assignments he should give to his two cooks, John and David. John can make 25 pizzas or 40 servings of pasta per hour and David can make 20 pizzas or 30 servings of pasta per hour. Which is the manager's best choice?

Accepted Answer

A) Fire David because he is not as productive as John. John will produce both pasta and pizza. 
B) David will make pizza because he has a comparative advantage in making pizza. 
C) John and David will each spend half their time making pizza and half their time making pasta. 
D) John will make pizza because he has a comparative advantage in making pizza. 
E) Increase David's salary because with encouragement, he can increase his output. 
A) Fire David because he is not as productive as John. John will produce both pasta and pizza. 
B) David will make pizza because he has a comparative advantage in making pizza. 
C) John and David will each spend half their time making pizza and half their time making pasta. 
D) John will make pizza because he has a comparative advantage in making pizza. 
E) Increase David's salary because with encouragement, he can increase his output.

Question 15

The price of a good will fall if

Accepted Answer

A) demand for the good increases. 
B) supply of the good decreases. 
C) supply of the good increases. 
D) demand for the good remains constant. 
E) supply of the good remains constant. 
A) demand for the good increases. 
B) supply of the good decreases. 
C) supply of the good increases. 
D) demand for the good remains constant. 
E) supply of the good remains constant.

Question 16

Use the figure below to answer the following questions.
Table 3.5.2
Demand and Supply Schedules for Cups of Coffee each day at CoolU
  
-Refer to Table 3.5.2. A premature frost destroys half the coffee trees. This change would be represented as a

Accepted Answer

A) leftward shift of the demand curve. 
B) rightward shift of the demand curve. 
C) leftward shift of the supply curve. 
D) rightward shift of the supply curve. 
E) movement down along the supply curve. 
A) leftward shift of the demand curve. 
B) rightward shift of the demand curve. 
C) leftward shift of the supply curve. 
D) rightward shift of the supply curve. 
E) movement down along the supply curve.

Question 17

Which of the following shifts the supply curve for good X leftward?

Accepted Answer

A) a situation in which the quantity demanded of X exceeds the quantity supplied of X 
B) an increase in the cost of the machinery used to produce X 
C) a technological advance in the production of X 
D) a decrease in the wages of workers employed to produce X 
E) a situation in which the quantity supplied of X exceeds the quantity demanded of X 
A) a situation in which the quantity demanded of X exceeds the quantity supplied of X 
B) an increase in the cost of the machinery used to produce X 
C) a technological advance in the production of X 
D) a decrease in the wages of workers employed to produce X 
E) a situation in which the quantity supplied of X exceeds the quantity demanded of X

Question 18

A technological improvement in the production of good A

Accepted Answer

A) decreases the supply of A. 
B) increases the demand for A. 
C) decreases the equilibrium price of A and decreases the equilibrium quantity. 
D) decreases the quantity demanded of A. 
E) increases the supply of A. 
A) decreases the supply of A. 
B) increases the demand for A. 
C) decreases the equilibrium price of A and decreases the equilibrium quantity. 
D) decreases the quantity demanded of A. 
E) increases the supply of A.

Question 19

Use the table below to answer the following questions.
Table 3.5.3
Demand and supply schedules for designer sport t-shirts at CoolU
  
-Refer to Table 3.5.3. In a television interview, Joe Cool shows off his designer sport t-shirt, setting off a new craze that doubles business at the sportswear establishments. The quantity of t-shirts demanded doubles at each price. The new equilibrium price is $________ and the new equilibrium quantity is ________ t-shirts per month.

Accepted Answer

A) 12; 240 
B) 8; 400 
C) 16; 400 
D) 12; 120 
E) 16; 200 
A) 12; 240 
B) 8; 400 
C) 16; 400 
D) 12; 120 
E) 16; 200

Question 20

If we observe a fall in the equilibrium price of good A, we know that the demand for A has

Accepted Answer

A) increased or the supply of A has decreased or both. 
B) increased or the supply of A has increased or both. 
C) decreased or the supply of A has increased or both. 
D) decreased or the supply of A has decreased or both. 
E) not changed. 
A) increased or the supply of A has decreased or both. 
B) increased or the supply of A has increased or both. 
C) decreased or the supply of A has increased or both. 
D) decreased or the supply of A has decreased or both. 
E) not changed.

Exam 3: Demand and Supply

If A is an inferior good and consumer income rises, the demand for A

If A and B are complements in production and the price of A falls, the supply of B

Use the table below to answer the following questions. Table 3.1.1 -Refer to Table 3.1.1. Between 2012 and 2013, the price of coffee relative to the price of tea ________ while the price of coffee relative to the price of cola ________.

If A and B are substitutes and the price of A rises, we will observe

How many sides does a market have?

Good A is a normal good if

The demand curve is P = 700 - 20QD. The supply curve is P = 300 + 20QS. At market equilibrium, the equilibrium quantity is ________ and the equilibrium price is ________.

If the number of suppliers of good Y increases, then

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 beans. If the price of peas, a substitute for beans in production, rises, what is the new beans equilibrium, ceteris paribus?

Use the figure below to answer the following questions. Table 3.5.2 Demand and Supply Schedules for Cups of Coffee each day at CoolU -Refer to Table 3.5.2. If the price is set at $1.30 per cup, there is ________ leading to a price ________.

If a turnip is an inferior good, then, ceteris paribus, an increase in the price of a turnip will

Which one of the following will definitely decrease the equilibrium quantity?

French fries and baked potatoes are

The kitchen manager at an Italian restaurant is deciding what assignments he should give to his two cooks, John and David. John can make 25 pizzas or 40 servings of pasta per hour and David can make 20 pizzas or 30 servings of pasta per hour. Which is the manager's best choice?

The price of a good will fall if

Use the figure below to answer the following questions. Table 3.5.2 Demand and Supply Schedules for Cups of Coffee each day at CoolU -Refer to Table 3.5.2. A premature frost destroys half the coffee trees. This change would be represented as a

Which of the following shifts the supply curve for good X leftward?

A technological improvement in the production of good A

If we observe a fall in the equilibrium price of good A, we know that the demand for A has

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

Use the table below to answer the following questions. Table 3.1.1 -Refer to Table 3.1.1. Between 2012 and 2013, the price of coffee relative to the price of tea while the price of coffee relative to the price of cola .

The demand curve is P = 700 - 20QD. The supply curve is P = 300 + 20QS. At market equilibrium, the equilibrium quantity is and the equilibrium price is .

Use the figure below to answer the following questions. Table 3.5.2 Demand and Supply Schedules for Cups of Coffee each day at CoolU -Refer to Table 3.5.2. If the price is set at $1.30 per cup, there is leading to a price .