Question 1

The price of a gallon of milk falls. Which of the following is a possible cause?

Accepted Answer

A)  a decrease in the price of oatmeal, a complement to milk 
B)  a discovery that milk cause diabetes 
C)  Milk is a normal good and people's incomes rise. 
D)  a drought that reduces supplies of feed grains fed to cows that produce milk 
A)  a decrease in the price of oatmeal, a complement to milk 
B)  a discovery that milk cause diabetes 
C)  Milk is a normal good and people's incomes rise. 
D)  a drought that reduces supplies of feed grains fed to cows that produce milk

Question 2

The "law of demand" states that, other things remaining the same, the quantity demanded of any good is

Accepted Answer

A)  inversely related to its price. 
B)  directly related to its price. 
C)  positively related to its price. 
D)  directly related to the supply of the good. 
A)  inversely related to its price. 
B)  directly related to its price. 
C)  positively related to its price. 
D)  directly related to the supply of the good.

Question 3

The interaction of supply and demand explains

Accepted Answer

A)  the prices of goods and services but not their quantities. 
B)  the quantities of goods and services but not their prices. 
C)  both the prices and the quantities of goods and services. 
D)  neither the prices nor the quantities of goods and services. 
A)  the prices of goods and services but not their quantities. 
B)  the quantities of goods and services but not their prices. 
C)  both the prices and the quantities of goods and services. 
D)  neither the prices nor the quantities of goods and services.

Question 4

The quantity supplied of a good is

Accepted Answer

A)  the same thing as the quantity demanded at each price. 
B)  the amount that the producers are planning to sell at a particular price during a given time period. 
C)  equal to the difference between the quantity available and the quantity desired by all consumers and producers. 
D)  the amount the firm would sell if it faced no resource constraints. 
A)  the same thing as the quantity demanded at each price. 
B)  the amount that the producers are planning to sell at a particular price during a given time period. 
C)  equal to the difference between the quantity available and the quantity desired by all consumers and producers. 
D)  the amount the firm would sell if it faced no resource constraints.

Question 5

Students can rent a Blu-ray movie at Campus Video for $4. As the price of Blu-ray players fall, the

Accepted Answer

A)  quantity supplied of Blu-ray movies will decrease. 
B)  demand for Blu-ray movies will increase. 
C)  supply of Blu-ray movies will decrease. 
D)  quantity demanded of Blu-ray movies will increase. 
A)  quantity supplied of Blu-ray movies will decrease. 
B)  demand for Blu-ray movies will increase. 
C)  supply of Blu-ray movies will decrease. 
D)  quantity demanded of Blu-ray movies will increase.

Question 6

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

Accepted Answer

A)  the supply curve shifts leftward. 
B)  the supply curve shifts rightward. 
C)  there is a movement up along the supply curve to a larger quantity supplied. 
D)  there is a movement down along the supply curve to a smaller quantity supplied. 
A)  the supply curve shifts leftward. 
B)  the supply curve shifts rightward. 
C)  there is a movement up along the supply curve to a larger quantity supplied. 
D)  there is a movement down along the supply curve to a smaller quantity supplied.

Question 7

-Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. What of the following could result in a movement to point b?

Accepted Answer

A)  an increase in the price of bottled water 
B)  a decrease in the price of bottled water 
C)  an increase in the opportunity cost of soft drinks 
D)  a decrease in the relative price of a soft drink 
A)  an increase in the price of bottled water 
B)  a decrease in the price of bottled water 
C)  an increase in the opportunity cost of soft drinks 
D)  a decrease in the relative price of a soft drink

Question 8

-A market research team has come up with the demand and supply schedules for pizza in Cheeseboro. These schedules are given in the table above. Use these data to analyze the situation in the market for pizza.
a) Draw a figure showing the demand curve for pizza and the supply curve of pizza. What are the equilibrium price and quantity?
b) Suppose the price is $10. Describe the situation in the market and explain how the price of pizza adjusts. Now suppose the price is $6. Describe the situation in the market and explain how the price of pizza adjusts.
c) The market research report also includes a prediction about the effect on the market for pizza in Cheeseboro of a recent news published in Cheeseboro Herald. The Herald reported that pizza has been discovered to help prevent heart diseases. Unfortunately, your dog chewed up the report and all you can read about the prediction is "quantity... by 150 at each price." What does the prediction say? Use your graph to show the predicted effects on the market for pizza. What are the predicted equilibrium price and quantity? How will the market adjust?

Accepted Answer

@#IMG-DLM& a) See the figure above. The equilibriu

Question 9

Ham and eggs are complements. If the price of ham rises, the demand for eggs will

Accepted Answer

A)  increase or decrease but the demand curve for ham will not change. 
B)  decrease and the demand curve for ham will shift rightward. 
C)  not change but there will be a movement along the demand curve for eggs. 
D)  decrease and the demand curve for eggs will shift leftward. 
A)  increase or decrease but the demand curve for ham will not change. 
B)  decrease and the demand curve for ham will shift rightward. 
C)  not change but there will be a movement along the demand curve for eggs. 
D)  decrease and the demand curve for eggs will shift leftward.

Question 10

-The figure above shows the market for candy. People become more concerned that eating candy causes them to gain weight, which they do not like. As a result, the

Accepted Answer

A)  demand curve shifts from D2 to D1 and the supply curve does not shift. 
B)  demand curve shifts from D1 to D2 and the supply curve shifts from S1 to S2. 
C)  demand curve shifts from D2 to D1 and the supply curve shifts from S2 to S1. 
D)  demand curve does not shift, and the supply curve shifts from S1 to S2. 
A)  demand curve shifts from D2 to D1 and the supply curve does not shift. 
B)  demand curve shifts from D1 to D2 and the supply curve shifts from S1 to S2. 
C)  demand curve shifts from D2 to D1 and the supply curve shifts from S2 to S1. 
D)  demand curve does not shift, and the supply curve shifts from S1 to S2.

Question 11

The price of a tomato increases and people buy more lettuce. You infer that lettuce and tomatoes are ________.

Accepted Answer

A)  complements 
B)  normal goods 
C)  substitutes 
D)  inferior goods 
A)  complements 
B)  normal goods 
C)  substitutes 
D)  inferior goods

Question 12

We observe that the equilibrium price of digital cameras has fallen and the equilibrium quantity of digital cameras has increased. Which of the following events could be responsible for this?

Accepted Answer

A)  Technological advances in digital camera production. 
B)  Consumers' preferences changed in favor of digital cameras. 
C)  The price of film cameras rose. 
D)  Workers who make digital cameras received a pay raise. 
A)  Technological advances in digital camera production. 
B)  Consumers' preferences changed in favor of digital cameras. 
C)  The price of film cameras rose. 
D)  Workers who make digital cameras received a pay raise.

Question 13

-The above figure shows the market for gasoline. When a hurricane destroys a major refinery that refines oil into gasoline, the

Accepted Answer

A)  demand curve for gasoline shifts from D1 to D2 and the supply curve of gasoline does not shift. 
B)  demand curve for gasoline shifts from D1 to D2 and the supply curve of gasoline shifts from S2 to S1. 
C)  demand curve for gasoline does not shift, and the supply curve of gasoline shifts from S2 to S1. 
D)  demand curve for gasoline does not shift, and the supply curve of gasoline shifts from S1 to S2. 
A)  demand curve for gasoline shifts from D1 to D2 and the supply curve of gasoline does not shift. 
B)  demand curve for gasoline shifts from D1 to D2 and the supply curve of gasoline shifts from S2 to S1. 
C)  demand curve for gasoline does not shift, and the supply curve of gasoline shifts from S2 to S1. 
D)  demand curve for gasoline does not shift, and the supply curve of gasoline shifts from S1 to S2.

Question 14

If the price of a movie download falls, the rental rate of DVDs ________ and the equilibrium quantity of DVDs rented ________.

Accepted Answer

A)  rises; decreases 
B)  rises; increases 
C)  falls; decreases 
D)  falls; increases 
A)  rises; decreases 
B)  rises; increases 
C)  falls; decreases 
D)  falls; increases

Question 15

Each point on a supply curve represents

Accepted Answer

A)  the highest price buyers will pay for the good. 
B)  the lowest price for which a supplier can profitably sell another unit. 
C)  the lowest price buyers will accept per unit of the good. 
D)  the highest price sellers can get for each unit over time. 
A)  the highest price buyers will pay for the good. 
B)  the lowest price for which a supplier can profitably sell another unit. 
C)  the lowest price buyers will accept per unit of the good. 
D)  the highest price sellers can get for each unit over time.

Question 16

Good A and good B are substitutes in production. The demand for good A decreases, which lowers the price of good A. The decrease in the price of good A

Accepted Answer

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

Question 17

In 2012 Nike reduced the price of its running shoes by 20 percent. As a result, the substitution effect caused

Accepted Answer

A)  the demand for Nike shoes to increase. 
B)  people to switch from Adidas shoes and buy more Nikes. 
C)  the relative price of Nikes to increase. 
D)  the demand curve for Nikes to shift rightward. 
A)  the demand for Nike shoes to increase. 
B)  people to switch from Adidas shoes and buy more Nikes. 
C)  the relative price of Nikes to increase. 
D)  the demand curve for Nikes to shift rightward.

Question 18

Suppose we observe that both the equilibrium price of film cameras and the equilibrium quantity of film cameras have fallen. Which of the following could be responsible for this?

Accepted Answer

A)  Consumers' preferences changed in favor of digital cameras. 
B)  technological advances in film camera production 
C)  Workers who make cameras received a pay raise. 
D)  The price of digital cameras increased. 
A)  Consumers' preferences changed in favor of digital cameras. 
B)  technological advances in film camera production 
C)  Workers who make cameras received a pay raise. 
D)  The price of digital cameras increased.

Question 19

-The initial supply and demand curves for a good are illustrated in the above figure. If there are technological advances in the production of the good, then the new equilibrium price for the good

Accepted Answer

A)  is less than $6. 
B)  is $6. 
C)  is more than $6. 
D)  could be less than, equal to, or more than $6. 
A)  is less than $6. 
B)  is $6. 
C)  is more than $6. 
D)  could be less than, equal to, or more than $6.

Question 20

The equilibrium quantity will decrease and the price might rise, fall, or stay the same when the

Accepted Answer

A)  demand and the supply of a good both increase. 
B)  demand for a good increases and the supply of it decreases. 
C)  demand for a good decreases and the supply of it increases. 
D)  demand and the supply of a good both decrease. 
A)  demand and the supply of a good both increase. 
B)  demand for a good increases and the supply of it decreases. 
C)  demand for a good decreases and the supply of it increases. 
D)  demand and the supply of a good both decrease.

The price of a gallon of milk falls. Which of the following is a possible cause?

The "law of demand" states that, other things remaining the same, the quantity demanded of any good is

The interaction of supply and demand explains

The quantity supplied of a good is

Students can rent a Blu-ray movie at Campus Video for $4. As the price of Blu-ray players fall, the

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

-Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. What of the following could result in a movement to point b?

Ham and eggs are complements. If the price of ham rises, the demand for eggs will

-The figure above shows the market for candy. People become more concerned that eating candy causes them to gain weight, which they do not like. As a result, the

The price of a tomato increases and people buy more lettuce. You infer that lettuce and tomatoes are ________.

We observe that the equilibrium price of digital cameras has fallen and the equilibrium quantity of digital cameras has increased. Which of the following events could be responsible for this?

-The above figure shows the market for gasoline. When a hurricane destroys a major refinery that refines oil into gasoline, the

If the price of a movie download falls, the rental rate of DVDs and the equilibrium quantity of DVDs rented .

Each point on a supply curve represents

Good A and good B are substitutes in production. The demand for good A decreases, which lowers the price of good A. The decrease in the price of good A

In 2012 Nike reduced the price of its running shoes by 20 percent. As a result, the substitution effect caused

Suppose we observe that both the equilibrium price of film cameras and the equilibrium quantity of film cameras have fallen. Which of the following could be responsible for this?

-The initial supply and demand curves for a good are illustrated in the above figure. If there are technological advances in the production of the good, then the new equilibrium price for the good

The equilibrium quantity will decrease and the price might rise, fall, or stay the same when the

What Is Economics

The Economic Problem

Elasticity

Efficiency and Equity

Government 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

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 3: Demand and Supply

The price of a gallon of milk falls. Which of the following is a possible cause?

The "law of demand" states that, other things remaining the same, the quantity demanded of any good is

The interaction of supply and demand explains

The quantity supplied of a good is

Students can rent a Blu-ray movie at Campus Video for $4. As the price of Blu-ray players fall, the

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

-Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. What of the following could result in a movement to point b?

Ham and eggs are complements. If the price of ham rises, the demand for eggs will

-The figure above shows the market for candy. People become more concerned that eating candy causes them to gain weight, which they do not like. As a result, the

The price of a tomato increases and people buy more lettuce. You infer that lettuce and tomatoes are ________.

We observe that the equilibrium price of digital cameras has fallen and the equilibrium quantity of digital cameras has increased. Which of the following events could be responsible for this?

-The above figure shows the market for gasoline. When a hurricane destroys a major refinery that refines oil into gasoline, the

If the price of a movie download falls, the rental rate of DVDs ________ and the equilibrium quantity of DVDs rented ________.

Each point on a supply curve represents

Good A and good B are substitutes in production. The demand for good A decreases, which lowers the price of good A. The decrease in the price of good A

In 2012 Nike reduced the price of its running shoes by 20 percent. As a result, the substitution effect caused

Suppose we observe that both the equilibrium price of film cameras and the equilibrium quantity of film cameras have fallen. Which of the following could be responsible for this?

-The initial supply and demand curves for a good are illustrated in the above figure. If there are technological advances in the production of the good, then the new equilibrium price for the good

The equilibrium quantity will decrease and the price might rise, fall, or stay the same when the

What Is Economics

The Economic Problem

Elasticity

Efficiency and Equity

Government 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

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

If the price of a movie download falls, the rental rate of DVDs and the equilibrium quantity of DVDs rented .