Question 1

What will happen to the equilibrium price and equilibrium quantity of ice cream cones when consumers' incomes decrease?

Accepted Answer

A)  If ice cream cones are a normal good, then the equilibrium price and quantity of ice cream cones will decrease. 
B)  If ice cream cones are a normal good, then the equilibrium price and equilibrium quantity of ice cream cones will increase. 
C)  If ice cream cones are an inferior good, then the equilibrium price for an ice cream cone will increase and the equilibrium quantity of ice cream cones will decrease. 
D)  If ice cream cones are an inferior good, then the equilibrium price and quantity of ice cream cones will decrease. 
A)  If ice cream cones are a normal good, then the equilibrium price and quantity of ice cream cones will decrease. 
B)  If ice cream cones are a normal good, then the equilibrium price and equilibrium quantity of ice cream cones will increase. 
C)  If ice cream cones are an inferior good, then the equilibrium price for an ice cream cone will increase and the equilibrium quantity of ice cream cones will decrease. 
D)  If ice cream cones are an inferior good, then the equilibrium price and quantity of ice cream cones will decrease.

Question 2

Inferior goods are those for which demand increases as

Accepted Answer

A)  the price of a substitute falls. 
B)  the price of a substitute rises. 
C)  income decreases. 
D)  income increases. 
A)  the price of a substitute falls. 
B)  the price of a substitute rises. 
C)  income decreases. 
D)  income increases.

Question 3

Which of the following shifts the supply curve rightward?

Accepted Answer

A)  an increase in the population 
B)  a positive change in preferences for the good 
C)  a decrease in the price of the good 
D)  a decrease in the price of a factor of production used to produce the good 
A)  an increase in the population 
B)  a positive change in preferences for the good 
C)  a decrease in the price of the good 
D)  a decrease in the price of a factor of production used to produce the good

Question 4

If the price of a candy bar is $1 and the price of a fast food meal is $5, then the

Accepted Answer

A)  relative price of a candy bar is 5 fast food meals per candy bar. 
B)  money price of a candy bar is 1/5 of a fast food meal per candy bar. 
C)  relative price of a fast food meal is 5 candy bars per fast food meal. 
D)  money price of a fast food meal is 1/5 of a candy bar per fast food meal. 
A)  relative price of a candy bar is 5 fast food meals per candy bar. 
B)  money price of a candy bar is 1/5 of a fast food meal per candy bar. 
C)  relative price of a fast food meal is 5 candy bars per fast food meal. 
D)  money price of a fast food meal is 1/5 of a candy bar per fast food meal.

Question 5

During the last decade, the price of shoes rose substantially yet people bought more pairs of new shoes each year. This experience suggests that the

Accepted Answer

A)  supply curve of shoes shifted leftward. 
B)  demand curve for shoes shifted leftward. 
C)  supply curve of shoes shifted rightward. 
D)  demand curve for shoes shifted rightward. 
A)  supply curve of shoes shifted leftward. 
B)  demand curve for shoes shifted leftward. 
C)  supply curve of shoes shifted rightward. 
D)  demand curve for shoes shifted rightward.

Question 6

If the money price of wheat increases and no other prices change, the

Accepted Answer

A)  relative price of wheat falls. 
B)  opportunity cost of wheat rises. 
C)  demand for wheat increases. 
D)  relative price of wheat is unaffected. 
A)  relative price of wheat falls. 
B)  opportunity cost of wheat rises. 
C)  demand for wheat increases. 
D)  relative price of wheat is unaffected.

Question 7

An increase in the demand for computers and a decrease in the number of sellers of computers will definitely ________.

Accepted Answer

A)  increase the number of computers bought 
B)  increase the price of a computer 
C)  increase the price of a computer and the number of computers bought 
D)  not change the price of a computer and increase the number of computers bought 
A)  increase the number of computers bought 
B)  increase the price of a computer 
C)  increase the price of a computer and the number of computers bought 
D)  not change the price of a computer and increase the number of computers bought

Question 8

-Using the above figure, suppose that roses are a normal good. If incomes decrease while simultaneously there is an increase in the price of the resources used to produce roses, then

Accepted Answer

A)  the price will definitely increase above $25 per dozen roses. 
B)  the quantity will definitely decrease below 10 dozen roses. 
C)  the price will definitely decrease below $25 per dozen roses. 
D)  we cannot tell what will happen to equilibrium quantity. 
A)  the price will definitely increase above $25 per dozen roses. 
B)  the quantity will definitely decrease below 10 dozen roses. 
C)  the price will definitely decrease below $25 per dozen roses. 
D)  we cannot tell what will happen to equilibrium quantity.

Question 9

Some sales managers are talking shop. Which of the following quotations refers to a movement along the demand curve?

Accepted Answer

A)  "Since our competitors raised their prices our sales have doubled." 
B)  "It has been an unusually mild winter; our sales of wool scarves are down from last year." 
C)  "We decided to cut our prices, and the increase in our sales has been remarkable." 
D)  none of the above 
A)  "Since our competitors raised their prices our sales have doubled." 
B)  "It has been an unusually mild winter; our sales of wool scarves are down from last year." 
C)  "We decided to cut our prices, and the increase in our sales has been remarkable." 
D)  none of the above

Question 10

Which of the following is TRUE?

Accepted Answer

A)  For an inferior good, when income increases, the demand curve shifts leftward. 
B)  The demand curve for a good shifts leftward when the price of a substitute rises. 
C)  If consumers expect the price of a good will rise in the future, the demand curve shifts leftward. 
D)  An increase in population shifts the demand curve for most goods leftward. 
A)  For an inferior good, when income increases, the demand curve shifts leftward. 
B)  The demand curve for a good shifts leftward when the price of a substitute rises. 
C)  If consumers expect the price of a good will rise in the future, the demand curve shifts leftward. 
D)  An increase in population shifts the demand curve for most goods leftward.

Question 11

-The figure above shows the demand for fruit snacks. Which movement reflects a decrease in population?

Accepted Answer

A)  from point a to point e 
B)  from point a to point b 
C)  from point a to point c 
D)  from point a to point d 
A)  from point a to point e 
B)  from point a to point b 
C)  from point a to point c 
D)  from point a to point d

Question 12

Beef is a normal good and people's incomes fall. At the same time a bumper corn crop reduces the cost of feeding steers. These changes result in

Accepted Answer

A)  an increase in the equilibrium quantity of beef. 
B)  an increase in the equilibrium quantity of beef if the shift in the demand curve is smaller than the shift in the supply curve. 
C)  an increase in the equilibrium quantity of beef if the shift in the demand curve is larger than the shift in the supply curve. 
D)  no change in the equilibrium quantity of beef. 
A)  an increase in the equilibrium quantity of beef. 
B)  an increase in the equilibrium quantity of beef if the shift in the demand curve is smaller than the shift in the supply curve. 
C)  an increase in the equilibrium quantity of beef if the shift in the demand curve is larger than the shift in the supply curve. 
D)  no change in the equilibrium quantity of beef.

Question 13

Pizza and hamburgers are substitutes for consumers. A fall in the price of a pizza ________ the price of a hamburger and ________ the quantity of hamburgers.

Accepted Answer

A)  raises; increases 
B)  raises; decreases 
C)  lowers; increases 
D)  lowers; decreases 
A)  raises; increases 
B)  raises; decreases 
C)  lowers; increases 
D)  lowers; decreases

Question 14

If both demand and supply increase, what will be the effect on the equilibrium price and quantity?

Accepted Answer

A)  Both the price and the quantity will increase. 
B)  The quantity will increase but the price could either rise, fall, or remain the same. 
C)  The price will fall but the quantity will increase. 
D)  The price will rise but the quantity could either increase, decrease, or remain the same. 
A)  Both the price and the quantity will increase. 
B)  The quantity will increase but the price could either rise, fall, or remain the same. 
C)  The price will fall but the quantity will increase. 
D)  The price will rise but the quantity could either increase, decrease, or remain the same.

Question 15

The quantity demanded of a good or service is the amount that

Accepted Answer

A)  a consumer would like to buy but might not be able to afford. 
B)  is actually bought during a given time period at a given price. 
C)  consumers plan to buy during a given time period at a given price. 
D)  firms are willing to sell during a given time period at a given price. 
A)  a consumer would like to buy but might not be able to afford. 
B)  is actually bought during a given time period at a given price. 
C)  consumers plan to buy during a given time period at a given price. 
D)  firms are willing to sell during a given time period at a given price.

Question 16

How does an unusually warm winter affect the equilibrium price and quantity of gloves?

Accepted Answer

A)  It raises both the price and the quantity. 
B)  It raises the price and decreases the quantity. 
C)  It lowers the price and increases the quantity. 
D)  It lowers both the price and the quantity. 
A)  It raises both the price and the quantity. 
B)  It raises the price and decreases the quantity. 
C)  It lowers the price and increases the quantity. 
D)  It lowers both the price and the quantity.

Question 17

In 2015, the price of peanuts was rising, which lead peanut butter buyers to expect the price of peanut butter would rise in the future. Consequently, in the current market for peanut butter there was ________ which resulted in ________ in the price of peanut butter and ________ in the quantity of peanut butter.

Accepted Answer

A)  an increase in demand for peanut butter; an increase; an increase 
B)  an increase in supply of peanut butter; a decrease; an increase 
C)  a decrease in demand for peanut butter; a decrease; a decrease 
D)  a decrease in supply of peanut butter; an increase; a decrease 
A)  an increase in demand for peanut butter; an increase; an increase 
B)  an increase in supply of peanut butter; a decrease; an increase 
C)  a decrease in demand for peanut butter; a decrease; a decrease 
D)  a decrease in supply of peanut butter; an increase; a decrease

Question 18

Demands differ from wants because

Accepted Answer

A)  demands are unlimited, whereas wants are limited by income. 
B)  wants require a plan to acquire a good but demands require no such plan. 
C)  wants imply a decision about which demands to satisfy, while demands involve no specific plan to acquire the good. 
D)  demands reflect a decision about which wants to satisfy and a plan to buy the good, while wants are unlimited and involve no specific plan to acquire the good. 
A)  demands are unlimited, whereas wants are limited by income. 
B)  wants require a plan to acquire a good but demands require no such plan. 
C)  wants imply a decision about which demands to satisfy, while demands involve no specific plan to acquire the good. 
D)  demands reflect a decision about which wants to satisfy and a plan to buy the good, while wants are unlimited and involve no specific plan to acquire the good.

Question 19

If the quantity demanded exceeds the quantity supplied, then there is

Accepted Answer

A)  a shortage and the price is below the equilibrium price. 
B)  a shortage and the price is above the equilibrium price. 
C)  a surplus and the price is below the equilibrium price. 
D)  a surplus and the price is above the equilibrium price. 
A)  a shortage and the price is below the equilibrium price. 
B)  a shortage and the price is above the equilibrium price. 
C)  a surplus and the price is below the equilibrium price. 
D)  a surplus and the price is above the equilibrium price.

Question 20

Between 2000 and 2015, the price of a PC fell and the quantity of PCs sold increased. Which of the explanations below is consistent with these facts?

Accepted Answer

A)  The demand for PCs increased by more then the supply of PCs increased. 
B)  The supply of PCs increased by more than the demand for PCs increased. 
C)  The demand for PCs decreased by more than the supply of PCs increased. 
D)  Both the supply of PCs and the demand for PCs decreased. 
A)  The demand for PCs increased by more then the supply of PCs increased. 
B)  The supply of PCs increased by more than the demand for PCs increased. 
C)  The demand for PCs decreased by more than the supply of PCs increased. 
D)  Both the supply of PCs and the demand for PCs decreased.

What will happen to the equilibrium price and equilibrium quantity of ice cream cones when consumers' incomes decrease?

Inferior goods are those for which demand increases as

Which of the following shifts the supply curve rightward?

If the price of a candy bar is $1 and the price of a fast food meal is $5, then the

During the last decade, the price of shoes rose substantially yet people bought more pairs of new shoes each year. This experience suggests that the

If the money price of wheat increases and no other prices change, the

An increase in the demand for computers and a decrease in the number of sellers of computers will definitely ________.

-Using the above figure, suppose that roses are a normal good. If incomes decrease while simultaneously there is an increase in the price of the resources used to produce roses, then

Some sales managers are talking shop. Which of the following quotations refers to a movement along the demand curve?

Which of the following is TRUE?

-The figure above shows the demand for fruit snacks. Which movement reflects a decrease in population?

Beef is a normal good and people's incomes fall. At the same time a bumper corn crop reduces the cost of feeding steers. These changes result in

Pizza and hamburgers are substitutes for consumers. A fall in the price of a pizza the price of a hamburger and the quantity of hamburgers.

If both demand and supply increase, what will be the effect on the equilibrium price and quantity?

The quantity demanded of a good or service is the amount that

How does an unusually warm winter affect the equilibrium price and quantity of gloves?

In 2015, the price of peanuts was rising, which lead peanut butter buyers to expect the price of peanut butter would rise in the future. Consequently, in the current market for peanut butter there was which resulted in in the price of peanut butter and in the quantity of peanut butter.

Demands differ from wants because

If the quantity demanded exceeds the quantity supplied, then there is

Between 2000 and 2015, the price of a PC fell and the quantity of PCs sold increased. Which of the explanations below is consistent with these facts?

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

What will happen to the equilibrium price and equilibrium quantity of ice cream cones when consumers' incomes decrease?

Inferior goods are those for which demand increases as

Which of the following shifts the supply curve rightward?

If the price of a candy bar is $1 and the price of a fast food meal is $5, then the

During the last decade, the price of shoes rose substantially yet people bought more pairs of new shoes each year. This experience suggests that the

If the money price of wheat increases and no other prices change, the

An increase in the demand for computers and a decrease in the number of sellers of computers will definitely ________.

-Using the above figure, suppose that roses are a normal good. If incomes decrease while simultaneously there is an increase in the price of the resources used to produce roses, then

Some sales managers are talking shop. Which of the following quotations refers to a movement along the demand curve?

Which of the following is TRUE?

-The figure above shows the demand for fruit snacks. Which movement reflects a decrease in population?

Beef is a normal good and people's incomes fall. At the same time a bumper corn crop reduces the cost of feeding steers. These changes result in

Pizza and hamburgers are substitutes for consumers. A fall in the price of a pizza ________ the price of a hamburger and ________ the quantity of hamburgers.

If both demand and supply increase, what will be the effect on the equilibrium price and quantity?

The quantity demanded of a good or service is the amount that

How does an unusually warm winter affect the equilibrium price and quantity of gloves?

Demands differ from wants because

If the quantity demanded exceeds the quantity supplied, then there is

Between 2000 and 2015, the price of a PC fell and the quantity of PCs sold increased. Which of the explanations below is consistent with these facts?

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

Pizza and hamburgers are substitutes for consumers. A fall in the price of a pizza the price of a hamburger and the quantity of hamburgers.