Question 1

Demand curves are negatively sloped when people buy:

Accepted Answer

A)  less as the price decreases. 
B)  more as the price increases. 
C)  the same amount as the price changes. 
D)  more as the price decreases. 
E)  less as incomes decrease. 
A)  less as the price decreases. 
B)  more as the price increases. 
C)  the same amount as the price changes. 
D)  more as the price decreases. 
E)  less as incomes decrease.

Question 2

If consumer incomes go up and cars are a normal good,the effect on the demand for cars ceteris paribus,will be a(n):

Accepted Answer

A)  upward movement along the demand curve for cars. 
B)  downward movement along the demand curve for cars. 
C)  rightward shift in the demand curve for cars. 
D)  leftward shift in the demand curve for cars. 
A)  upward movement along the demand curve for cars. 
B)  downward movement along the demand curve for cars. 
C)  rightward shift in the demand curve for cars. 
D)  leftward shift in the demand curve for cars.

Question 3

If people buy less chewing gum at every price when their incomes fall,then:

Accepted Answer

A)  chewing gum is a normal good. 
B)  the demand for chewing gum is positively sloped. 
C)  demand for chewing gum has increased. 
D)  the price of chewing gum has increased. 
E)  there has been a decrease in population that changed demand. 
A)  chewing gum is a normal good. 
B)  the demand for chewing gum is positively sloped. 
C)  demand for chewing gum has increased. 
D)  the price of chewing gum has increased. 
E)  there has been a decrease in population that changed demand.

Question 4

Which of the following will increase the demand for motorcycles?

Accepted Answer

A)  A fall in the price of motorcycles. 
B)  A fall in insurance rates for motorcycles. 
C)  A fall in the price of automobiles. 
D)  A fall in buyers' incomes (assuming motorcycles are a normal good). 
E)  A fall in consumer preference for motorcycles. 
A)  A fall in the price of motorcycles. 
B)  A fall in insurance rates for motorcycles. 
C)  A fall in the price of automobiles. 
D)  A fall in buyers' incomes (assuming motorcycles are a normal good). 
E)  A fall in consumer preference for motorcycles.

Question 5

Which of the following is most likely to increase the supply of corn?

Accepted Answer

A)  The farm worker's union successfully negotiates a pay increase for corn harvest workers. 
B)  The Surgeon General announces that eating corn bread contributes to baldness in men. 
C)  Congress and the President eliminate subsidies formerly paid to corn farmers. 
D)  Farmers that grow soybeans can also grow corn, and the price of soybeans drops by 75 percent. 
A)  The farm worker's union successfully negotiates a pay increase for corn harvest workers. 
B)  The Surgeon General announces that eating corn bread contributes to baldness in men. 
C)  Congress and the President eliminate subsidies formerly paid to corn farmers. 
D)  Farmers that grow soybeans can also grow corn, and the price of soybeans drops by 75 percent.

Question 6

If there is an increase in income,which of the following is true?

Accepted Answer

A)  The demand for complementary goods decreases. 
B)  The demand for substitute goods decreases. 
C)  The demand for normal goods decreases. 
D)  The demand for normal goods increases. 
E)  The supply for all goods decreases. 
A)  The demand for complementary goods decreases. 
B)  The demand for substitute goods decreases. 
C)  The demand for normal goods decreases. 
D)  The demand for normal goods increases. 
E)  The supply for all goods decreases.

Question 7

Which of the following would most likely not cause market demand for a normal good to decline?

Accepted Answer

A)  An increase in the price of a substitute. 
B)  An increase in the price of a complement. 
C)  A decline in consumer income. 
D)  Consumer expectations that the good will go on sale in the near future. 
E)  An announcement by the Surgeon General that the product contributes to premature death. 
A)  An increase in the price of a substitute. 
B)  An increase in the price of a complement. 
C)  A decline in consumer income. 
D)  Consumer expectations that the good will go on sale in the near future. 
E)  An announcement by the Surgeon General that the product contributes to premature death.

Question 8

Assuming gasoline and oil to be complementary goods,the effect on the oil market of an increase in the price of gasoline (other things being equal)would best be described as a(n):

Accepted Answer

A)  increase in the demand for oil. 
B)  decrease in the demand for oil 
C)  increase in the quantity of oil demanded. 
D)  increase in the quantity of oil demanded 
A)  increase in the demand for oil. 
B)  decrease in the demand for oil 
C)  increase in the quantity of oil demanded. 
D)  increase in the quantity of oil demanded

Question 9

Other things being equal,the effects of an increase in the price of orange juice would best be represented by a(n):

Accepted Answer

A)  upward movement along the demand curve for orange juice. 
B)  leftward shift in the demand curve for orange juice. 
C)  downward movement along the demand curve for orange juice. 
D)  rightward shift in the demand curve for orange juice. 
A)  upward movement along the demand curve for orange juice. 
B)  leftward shift in the demand curve for orange juice. 
C)  downward movement along the demand curve for orange juice. 
D)  rightward shift in the demand curve for orange juice.

Question 10

The negative slope of the demand curve reflects the:

Accepted Answer

A)  positive relationship between price and quantity. 
B)  proportional relationship between price and quantity. 
C)  inverse relationship between price and quantity. 
D)  positive relationship between income and quantity. 
E)  inverse relationship between income and price. 
A)  positive relationship between price and quantity. 
B)  proportional relationship between price and quantity. 
C)  inverse relationship between price and quantity. 
D)  positive relationship between income and quantity. 
E)  inverse relationship between income and price.

Question 11

Exhibit 3-5 Supply for Tucker's Cola Data
  
-As shown in Exhibit 3-5,the price and quantity supplied by sellers of Tucker's Cola have a(n)____ relationship.

Accepted Answer

A)  direct. 
B)  inverse. 
C)  negative. 
D)  zero. 
A)  direct. 
B)  inverse. 
C)  negative. 
D)  zero.

Question 12

A movement along a demand curve is called a change in:

Accepted Answer

A)  income. 
B)  quantity demanded. 
C)  demand. 
D)  tastes. 
E)  population. 
A)  income. 
B)  quantity demanded. 
C)  demand. 
D)  tastes. 
E)  population.

Question 13

The most plausible reason why changes in the price of cotton can cause shifts in the supply curve for tobacco is:

Accepted Answer

A)  cigarette smokers often wear cotton shirts. 
B)  when incomes rise, people consume more cotton and tobacco. 
C)  firms can switch from growing tobacco to cotton and vice versa. 
D)  tobacco is an input in the production of cotton. 
E)  cotton and tobacco are unrelated markets in all ways. 
A)  cigarette smokers often wear cotton shirts. 
B)  when incomes rise, people consume more cotton and tobacco. 
C)  firms can switch from growing tobacco to cotton and vice versa. 
D)  tobacco is an input in the production of cotton. 
E)  cotton and tobacco are unrelated markets in all ways.

Question 14

Assume that a computer is a normal good.An increase in consumer income,other things being equal,would:

Accepted Answer

A)  cause an upward movement along the demand curve for computers. 
B)  cause a downward movement along the demand curve for computers. 
C)  shift the demand curve for computers to the left. 
D)  shift the demand curve for computers to the right. 
A)  cause an upward movement along the demand curve for computers. 
B)  cause a downward movement along the demand curve for computers. 
C)  shift the demand curve for computers to the left. 
D)  shift the demand curve for computers to the right.

Question 15

Which of the following is true if the price of coffee increases?

Accepted Answer

A)  The demand for tea, a substitute good, will decrease. 
B)  The demand for coffee will increase. 
C)  The demand for coffee and tea will decrease. 
D)  Both the demand for coffee and tea will increase. 
E)  The demand for tea, a substitute good, will increase. 
A)  The demand for tea, a substitute good, will decrease. 
B)  The demand for coffee will increase. 
C)  The demand for coffee and tea will decrease. 
D)  Both the demand for coffee and tea will increase. 
E)  The demand for tea, a substitute good, will increase.

Question 16

Assuming that clothing is a normal good,an increase in consumer income,other things being equal,would:

Accepted Answer

A)  increase the demand for clothing. 
B)  decrease the demand for clothing. 
C)  increase the quantity of clothing demanded. 
D)  decrease the quantity of clothing demanded. 
A)  increase the demand for clothing. 
B)  decrease the demand for clothing. 
C)  increase the quantity of clothing demanded. 
D)  decrease the quantity of clothing demanded.

Question 17

Exhibit 3-3 Demand curves
  
-Which of the graphs in Exhibit 3-3 depicts the effect of a decrease in the price of domestic cars on the demand for foreign cars?

Accepted Answer

A)  Graph A. 
B)  Graph B. 
C)  Graph C. 
D)  Graph D. 
A)  Graph A. 
B)  Graph B. 
C)  Graph C. 
D)  Graph D.

Question 18

Which of the following is true for the law of demand?

Accepted Answer

A)  Sellers increase the quantity of a good available as the price of the good increases. 
B)  An increase in price results from false needs. 
C)  There is an inverse relationship between the price of a good and the quantity of the good demanded. 
D)  Prices increase as more units of a product are demanded. 
A)  Sellers increase the quantity of a good available as the price of the good increases. 
B)  An increase in price results from false needs. 
C)  There is an inverse relationship between the price of a good and the quantity of the good demanded. 
D)  Prices increase as more units of a product are demanded.

Question 19

Suppose that X and Y are complementary goods.If the price of good X decreases,we can expect the:

Accepted Answer

A)  demand for good X to increase. 
B)  quantity demanded of good Y to decrease. 
C)  quantity demanded of good Y to increase. 
D)  demand for good Y to decrease. 
E)  demand for good Y to increase. 
A)  demand for good X to increase. 
B)  quantity demanded of good Y to decrease. 
C)  quantity demanded of good Y to increase. 
D)  demand for good Y to decrease. 
E)  demand for good Y to increase.

Question 20

Consumers buy less of a good as its price increases because:

Accepted Answer

A)  production costs have risen. 
B)  substitute goods are now relatively cheaper. 
C)  the income of consumers has effectively risen. 
D)  the higher price will make the good more valuable to each consumer. 
A)  production costs have risen. 
B)  substitute goods are now relatively cheaper. 
C)  the income of consumers has effectively risen. 
D)  the higher price will make the good more valuable to each consumer.

Exam 3: Part 1: Market Demand and Supply

Demand curves are negatively sloped when people buy:

If consumer incomes go up and cars are a normal good,the effect on the demand for cars ceteris paribus,will be a(n):

If people buy less chewing gum at every price when their incomes fall,then:

Which of the following will increase the demand for motorcycles?

Which of the following is most likely to increase the supply of corn?

If there is an increase in income,which of the following is true?

Which of the following would most likely not cause market demand for a normal good to decline?

Assuming gasoline and oil to be complementary goods,the effect on the oil market of an increase in the price of gasoline (other things being equal)would best be described as a(n):

Other things being equal,the effects of an increase in the price of orange juice would best be represented by a(n):

The negative slope of the demand curve reflects the:

Exhibit 3-5 Supply for Tucker's Cola Data -As shown in Exhibit 3-5,the price and quantity supplied by sellers of Tucker's Cola have a(n)____ relationship.

A movement along a demand curve is called a change in:

The most plausible reason why changes in the price of cotton can cause shifts in the supply curve for tobacco is:

Assume that a computer is a normal good.An increase in consumer income,other things being equal,would:

Which of the following is true if the price of coffee increases?

Assuming that clothing is a normal good,an increase in consumer income,other things being equal,would:

Exhibit 3-3 Demand curves -Which of the graphs in Exhibit 3-3 depicts the effect of a decrease in the price of domestic cars on the demand for foreign cars?

Which of the following is true for the law of demand?

Suppose that X and Y are complementary goods.If the price of good X decreases,we can expect the:

Consumers buy less of a good as its price increases because:

Introducing the Economic Way of Thinking

A: Appendix: Applying Graphs to Economics

Production Possibilities,Opportunity Cost,and Economic Growth

Part 2: Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

A: Appendix: The Self-Correcting Aggregate Demand and Supply Model

Fiscal Policy

The Public Sector

Federal Deficits,Surpluses,and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

A: Appendix: Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Filters