Question 1

When does a shortage occur?

Accepted Answer

A shortage occurs when the pri

Question 2

An increase in the number of producers of gruel ________ the supply of gruel and shifts the supply curve of gruel ________.

Accepted Answer

A)  increases; rightward 
B)  increases; leftward 
C)  decreases; rightward 
D)  decreases; leftward 
A)  increases; rightward 
B)  increases; leftward 
C)  decreases; rightward 
D)  decreases; leftward

Question 3

The price of a computer is $1,000 and the price of a car is $12,000. What is the relative price of a car? What is the relative price of a computer?

Accepted Answer

The relative price of a car is

Question 4

-The above figures show the market for oranges. Which figure(s) shows the effect of an increase in the price of bananas, a substitute for oranges?

Accepted Answer

A)  Figure A 
B)  Figure C 
C)  Figure D 
D)  Figure A and C 
A)  Figure A 
B)  Figure C 
C)  Figure D 
D)  Figure A and C

Question 5

If workers who make DVDs get a pay raise, the equilibrium price of a DVD ________ and the equilibrium quantity of DVDs ________.

Accepted Answer

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

Question 6

If good A is a normal good and income increases, the equilibrium price of A ________ and the equilibrium quantity of A ________.

Accepted Answer

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

Question 7

-If the good in the above figure is a normal good and income rises, then the new equilibrium quantity

Accepted Answer

A)  is less than 300 units. 
B)  is 300 units. 
C)  is more than 300 units. 
D)  could be less than, equal to, or more than 300 units. 
A)  is less than 300 units. 
B)  is 300 units. 
C)  is more than 300 units. 
D)  could be less than, equal to, or more than 300 units.

Question 8

When supply decreases and demand does not change, the equilibrium quantity ________ and the equilibrium price ________.

Accepted Answer

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

Question 9

Which of the following always raises the equilibrium price?

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 
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

Question 10

Suppose the equilibrium price of a gallon of gasoline drops from $3.00 to $2.85 and the equilibrium quantity increases from 365 millions of gallons per week to 372 millions of gallons per week. These changes can be the result of

Accepted Answer

A)  an increase in supply. 
B)  an increase in demand. 
C)  a decrease in supply. 
D)  a decrease in demand. 
A)  an increase in supply. 
B)  an increase in demand. 
C)  a decrease in supply. 
D)  a decrease in demand.

Question 11

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

Accepted Answer

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

Question 12

Because of increasing marginal cost, most supply curves

Accepted Answer

A)  are horizontal. 
B)  are vertical. 
C)  have a negative slope. 
D)  have a positive slope. 
A)  are horizontal. 
B)  are vertical. 
C)  have a negative slope. 
D)  have a positive slope.

Question 13

-The above figure shows the market for hamburger. Which panel shows the effect of a new excise tax on all beef products?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D

Question 14

If a producer can use resources to produce either good A or good B, then A and B are

Accepted Answer

A)  complements in production. 
B)  substitutes in production. 
C)  substitutes in consumption. 
D)  complements in consumption. 
A)  complements in production. 
B)  substitutes in production. 
C)  substitutes in consumption. 
D)  complements in consumption.

Question 15

-In the above figure, a price of $15 per dozen for roses would result in

Accepted Answer

A)  equilibrium. 
B)  a shortage. 
C)  a surplus. 
D)  downward pressure on prices. 
A)  equilibrium. 
B)  a shortage. 
C)  a surplus. 
D)  downward pressure on prices.

Question 16

The opportunity cost of good A in terms of good B is equal to the

Accepted Answer

A)  money price of good A minus the money price of good B. 
B)  money price of good B minus the money price of good A. 
C)  ratio of the money price of good A to the money price of good B. 
D)  ratio of the money price of good B to the money price of good A. 
A)  money price of good A minus the money price of good B. 
B)  money price of good B minus the money price of good A. 
C)  ratio of the money price of good A to the money price of good B. 
D)  ratio of the money price of good B to the money price of good A.

Question 17

The equilibrium quantity of a good will increase and its equilibrium price might rise, fall, or stay the same when

Accepted Answer

A)  its demand and supply both increase. 
B)  its demand increases and supply decreases. 
C)  its demand decreases and supply increases. 
D)  its demand and supply both decrease. 
A)  its demand and supply both increase. 
B)  its demand increases and supply decreases. 
C)  its demand decreases and supply increases. 
D)  its demand and supply both decrease.

Question 18

-In the figure above, which movement could be the result of an increase in the wages paid to oil workers?

Accepted Answer

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

Question 19

A complement is a good

Accepted Answer

A)  of lower quality than another good. 
B)  used in conjunction with another good. 
C)  used instead of another good. 
D)  of higher quality than another good. 
A)  of lower quality than another good. 
B)  used in conjunction with another good. 
C)  used instead of another good. 
D)  of higher quality than another good.

Question 20

Which of the following shifts the supply curve of broccoli?

Accepted Answer

A)  an increase in income 
B)  a newly discovered increase in the nutritional value of broccoli 
C)  a newly discovered link between broccoli consumption and tooth decay 
D)  the destruction of much of this year's broccoli crop by hurricanes 
A)  an increase in income 
B)  a newly discovered increase in the nutritional value of broccoli 
C)  a newly discovered link between broccoli consumption and tooth decay 
D)  the destruction of much of this year's broccoli crop by hurricanes

When does a shortage occur?

An increase in the number of producers of gruel the supply of gruel and shifts the supply curve of gruel .

The price of a computer is $1,000 and the price of a car is $12,000. What is the relative price of a car? What is the relative price of a computer?

-The above figures show the market for oranges. Which figure(s) shows the effect of an increase in the price of bananas, a substitute for oranges?

If workers who make DVDs get a pay raise, the equilibrium price of a DVD and the equilibrium quantity of DVDs .

If good A is a normal good and income increases, the equilibrium price of A and the equilibrium quantity of A .

-If the good in the above figure is a normal good and income rises, then the new equilibrium quantity

When supply decreases and demand does not change, the equilibrium quantity and the equilibrium price .

Which of the following always raises the equilibrium price?

Suppose the equilibrium price of a gallon of gasoline drops from $3.00 to $2.85 and the equilibrium quantity increases from 365 millions of gallons per week to 372 millions of gallons per week. These changes can be the result of

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

Because of increasing marginal cost, most supply curves

-The above figure shows the market for hamburger. Which panel shows the effect of a new excise tax on all beef products?

If a producer can use resources to produce either good A or good B, then A and B are

-In the above figure, a price of $15 per dozen for roses would result in

The opportunity cost of good A in terms of good B is equal to the

The equilibrium quantity of a good will increase and its equilibrium price might rise, fall, or stay the same when

-In the figure above, which movement could be the result of an increase in the wages paid to oil workers?

A complement is a good

Which of the following shifts the supply curve of broccoli?

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

When does a shortage occur?

An increase in the number of producers of gruel ________ the supply of gruel and shifts the supply curve of gruel ________.

The price of a computer is $1,000 and the price of a car is $12,000. What is the relative price of a car? What is the relative price of a computer?

-The above figures show the market for oranges. Which figure(s) shows the effect of an increase in the price of bananas, a substitute for oranges?

If workers who make DVDs get a pay raise, the equilibrium price of a DVD ________ and the equilibrium quantity of DVDs ________.

If good A is a normal good and income increases, the equilibrium price of A ________ and the equilibrium quantity of A ________.

-If the good in the above figure is a normal good and income rises, then the new equilibrium quantity

When supply decreases and demand does not change, the equilibrium quantity ________ and the equilibrium price ________.

Which of the following always raises the equilibrium price?

Suppose the equilibrium price of a gallon of gasoline drops from $3.00 to $2.85 and the equilibrium quantity increases from 365 millions of gallons per week to 372 millions of gallons per week. These changes can be the result of

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

Because of increasing marginal cost, most supply curves

-The above figure shows the market for hamburger. Which panel shows the effect of a new excise tax on all beef products?

If a producer can use resources to produce either good A or good B, then A and B are

-In the above figure, a price of $15 per dozen for roses would result in

The opportunity cost of good A in terms of good B is equal to the

The equilibrium quantity of a good will increase and its equilibrium price might rise, fall, or stay the same when

-In the figure above, which movement could be the result of an increase in the wages paid to oil workers?

A complement is a good

Which of the following shifts the supply curve of broccoli?

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

An increase in the number of producers of gruel the supply of gruel and shifts the supply curve of gruel .

If workers who make DVDs get a pay raise, the equilibrium price of a DVD and the equilibrium quantity of DVDs .

If good A is a normal good and income increases, the equilibrium price of A and the equilibrium quantity of A .

When supply decreases and demand does not change, the equilibrium quantity and the equilibrium price .