Question 1

Auto workers negotiate a wage increase. How does this wage hike affect the supply of cars?

Accepted Answer

A)  It decreases the supply. 
B)  It increase the supply. 
C)  It has no effect. 
D)  There is not enough information to tell if the change increases, decreases, or has no effect on the supply of cars. 
A)  It decreases the supply. 
B)  It increase the supply. 
C)  It has no effect. 
D)  There is not enough information to tell if the change increases, decreases, or has no effect on the supply of cars.

Question 2

Which of the following CORRECTLY describes how price adjustments eliminate a shortage?

Accepted Answer

A)  As the price rises, the quantity demanded decreases while the quantity supplied increases. 
B)  As the price rises, the quantity demanded increases while the quantity supplied decreases. 
C)  As the price falls, the quantity demanded decreases while the quantity supplied increases. 
D)  As the price falls, the quantity demanded increases while the quantity supplied decreases. 
A)  As the price rises, the quantity demanded decreases while the quantity supplied increases. 
B)  As the price rises, the quantity demanded increases while the quantity supplied decreases. 
C)  As the price falls, the quantity demanded decreases while the quantity supplied increases. 
D)  As the price falls, the quantity demanded increases while the quantity supplied decreases.

Question 3

-In the above figure, if D2 is the demand curve, then a price of P3 would result in

Accepted Answer

A)  a shortage of Q3 - Q1. 
B)  a shortage of Q4 - Q3. 
C)  a surplus of Q3 - Q1. 
D)  a surplus of Q4 - Q0. 
A)  a shortage of Q3 - Q1. 
B)  a shortage of Q4 - Q3. 
C)  a surplus of Q3 - Q1. 
D)  a surplus of Q4 - Q0.

Question 4

-The above table gives the demand and supply schedules for cat food. What is the equilibrium price and quantity?

Accepted Answer

The equilibrium price is $2.50

Question 5

The price of cereal rises. As a result, people have cereal for breakfast on fewer days and eat eggs instead. This behavior is an example of

Accepted Answer

A)  a decrease in the quantity demanded of cereal because of the substitution effect. 
B)  an increase in the quantity demanded of eggs because of the income effect. 
C)  a decrease in the quantity supplied of cereal because of the substitution effect. 
D)  an increase in the quantity supplied of eggs because of the income effect. 
A)  a decrease in the quantity demanded of cereal because of the substitution effect. 
B)  an increase in the quantity demanded of eggs because of the income effect. 
C)  a decrease in the quantity supplied of cereal because of the substitution effect. 
D)  an increase in the quantity supplied of eggs because of the income effect.

Question 6

The existence of a shortage

Accepted Answer

A)  means resources are being allocated efficiently. 
B)  is impossible in a market economy. 
C)  pushes the price up. 
D)  pushes the price down. 
A)  means resources are being allocated efficiently. 
B)  is impossible in a market economy. 
C)  pushes the price up. 
D)  pushes the price down.

Question 7

The Market for Wapanzo BeansQuantity Demanded Price Quantity Supplied(millions of pounds (dollars per (millions of poundsper year) pound) per year)  
-Refer to the table above. Suppose that in normal years demand is represented by Case 2 and supply is represented by Case B. In a normal year the price of wapanzo beans will be

Accepted Answer

A)  $1 per pound. 
B)  $2 per pound. 
C)  $3 per pound. 
D)  $4 per pound. 
A)  $1 per pound. 
B)  $2 per pound. 
C)  $3 per pound. 
D)  $4 per pound.

Question 8

If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 12,000 per year, there is a ________ in the market and the price will ________.

Accepted Answer

A)  shortage; rise 
B)  shortage; fall 
C)  surplus; rise 
D)  surplus; fall 
A)  shortage; rise 
B)  shortage; fall 
C)  surplus; rise 
D)  surplus; fall

Question 9

The Market for Wapanzo BeansQuantity Demanded Price Quantity Supplied(millions of pounds (dollars per (millions of poundsper year) pound) per year)  
-Refer to the table above. Suppose that in normal years demand is represented by Case 2 and supply is represented by Case B. If there is exceptionally good growing weather in the wapanzo bean growing region then supply will ________ and demand will ________.

Accepted Answer

A)  become case C; become case 1 
B)  become case C; stay at case 2 
C)  become case C; become case 3 
D)  stay at case B; become case 1 
A)  become case C; become case 1 
B)  become case C; stay at case 2 
C)  become case C; become case 3 
D)  stay at case B; become case 1

Question 10

When both the demand for a good increases and the supply of the good increases, the equilibrium quantity definitely increases.

Accepted Answer

A) True 
 B)False

Question 11

If the price of lumber rises, then, in the market for sawdust

Accepted Answer

A)  the supply curve of sawdust shifts leftward. 
B)  the supply curve of sawdust shifts rightward. 
C)  there is a movement downward along the supply curve for sawdust. 
D)  there is a movement upward along the supply curve for sawdust. 
A)  the supply curve of sawdust shifts leftward. 
B)  the supply curve of sawdust shifts rightward. 
C)  there is a movement downward along the supply curve for sawdust. 
D)  there is a movement upward along the supply curve for sawdust.

Question 12

What is the law of demand?

Accepted Answer

The law of demand states that other thin

Question 13

-Suppose the market for Blu-rays has the demand and supply schedules shown in the table above. Suppose a decrease in the price of a Blu-ray player increases the quantity of disks demanded at each price by 20 million. What are the new equilibrium price and equilibrium quantity of Blu-rays?

Accepted Answer

The initial equilibrium price is $11.50

Question 14

When the price of a pizza decreases from $14 to $12

Accepted Answer

A)  the income effect means people buy less pizza. 
B)  the income effect points out that the total purchasing power of people who buy pizza increases. 
C)  the income effect means that the demand for pizza will not change. 
D)  None of the above answers is correct. 
A)  the income effect means people buy less pizza. 
B)  the income effect points out that the total purchasing power of people who buy pizza increases. 
C)  the income effect means that the demand for pizza will not change. 
D)  None of the above answers is correct.

Question 15

-In the figure, the equilibrium price is initially $3 per bushel of wheat. If buyers come to expect that the price of a bushel of wheat will rise in the future, but sellers do not, the current equilibrium price will

Accepted Answer

A)  rise. 
B)  not change. 
C)  fall. 
D)  Perhaps rise, fall, or stay the same, depending on whether there are more demanders or suppliers in the market. 
A)  rise. 
B)  not change. 
C)  fall. 
D)  Perhaps rise, fall, or stay the same, depending on whether there are more demanders or suppliers in the market.

Question 16

An increase in the incomes of baseball fans in New York leads to a rightward movement along the demand curve but does not shift the demand curve for Yankees tickets.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following explains why supply curves slope upward?

Accepted Answer

A)  prices and income 
B)  increasing marginal cost 
C)  resources and technology 
D)  substitutes in production and complements in production 
A)  prices and income 
B)  increasing marginal cost 
C)  resources and technology 
D)  substitutes in production and complements in production

Question 18

Computers are a complement to computer software. Suppose the price of a computer falls. Simultaneously, suppose that the number of companies selling computer software decreases. How do these changes affect the price and quantity of computer software?

Accepted Answer

The fall in the price of a computer incr

Question 19

If the price of an Xbox player falls, then in the market for Xbox games

Accepted Answer

A)  the demand curve for Xbox games shifts rightward. 
B)  the demand curve for Xbox games shifts leftward. 
C)  there is a movement downward along the demand curve for Xbox games. 
D)  there is a movement upward along the demand curve for Xbox games. 
A)  the demand curve for Xbox games shifts rightward. 
B)  the demand curve for Xbox games shifts leftward. 
C)  there is a movement downward along the demand curve for Xbox games. 
D)  there is a movement upward along the demand curve for Xbox games.

Question 20

A supply curve is also a maximum-supply-price curve.

Accepted Answer

A) True 
 B)False

Auto workers negotiate a wage increase. How does this wage hike affect the supply of cars?

Which of the following CORRECTLY describes how price adjustments eliminate a shortage?

-In the above figure, if D₂ is the demand curve, then a price of P₃ would result in

-The above table gives the demand and supply schedules for cat food. What is the equilibrium price and quantity?

The price of cereal rises. As a result, people have cereal for breakfast on fewer days and eat eggs instead. This behavior is an example of

The existence of a shortage

If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 12,000 per year, there is a in the market and the price will .

When both the demand for a good increases and the supply of the good increases, the equilibrium quantity definitely increases.

If the price of lumber rises, then, in the market for sawdust

What is the law of demand?

-Suppose the market for Blu-rays has the demand and supply schedules shown in the table above. Suppose a decrease in the price of a Blu-ray player increases the quantity of disks demanded at each price by 20 million. What are the new equilibrium price and equilibrium quantity of Blu-rays?

When the price of a pizza decreases from $14 to $12

-In the figure, the equilibrium price is initially $3 per bushel of wheat. If buyers come to expect that the price of a bushel of wheat will rise in the future, but sellers do not, the current equilibrium price will

An increase in the incomes of baseball fans in New York leads to a rightward movement along the demand curve but does not shift the demand curve for Yankees tickets.

Which of the following explains why supply curves slope upward?

Computers are a complement to computer software. Suppose the price of a computer falls. Simultaneously, suppose that the number of companies selling computer software decreases. How do these changes affect the price and quantity of computer software?

If the price of an Xbox player falls, then in the market for Xbox games

A supply curve is also a maximum-supply-price curve.

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

Auto workers negotiate a wage increase. How does this wage hike affect the supply of cars?

Which of the following CORRECTLY describes how price adjustments eliminate a shortage?

-In the above figure, if D2 is the demand curve, then a price of P3 would result in

-The above table gives the demand and supply schedules for cat food. What is the equilibrium price and quantity?

The price of cereal rises. As a result, people have cereal for breakfast on fewer days and eat eggs instead. This behavior is an example of

The existence of a shortage

If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 12,000 per year, there is a ________ in the market and the price will ________.

When both the demand for a good increases and the supply of the good increases, the equilibrium quantity definitely increases.

If the price of lumber rises, then, in the market for sawdust

What is the law of demand?

-Suppose the market for Blu-rays has the demand and supply schedules shown in the table above. Suppose a decrease in the price of a Blu-ray player increases the quantity of disks demanded at each price by 20 million. What are the new equilibrium price and equilibrium quantity of Blu-rays?

When the price of a pizza decreases from $14 to $12

-In the figure, the equilibrium price is initially $3 per bushel of wheat. If buyers come to expect that the price of a bushel of wheat will rise in the future, but sellers do not, the current equilibrium price will

An increase in the incomes of baseball fans in New York leads to a rightward movement along the demand curve but does not shift the demand curve for Yankees tickets.

Which of the following explains why supply curves slope upward?

Computers are a complement to computer software. Suppose the price of a computer falls. Simultaneously, suppose that the number of companies selling computer software decreases. How do these changes affect the price and quantity of computer software?

If the price of an Xbox player falls, then in the market for Xbox games

A supply curve is also a maximum-supply-price curve.

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

-In the above figure, if D₂ is the demand curve, then a price of P₃ would result in

If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 12,000 per year, there is a in the market and the price will .