Question 1

-Based on the above figure, which of the following is TRUE?

Accepted Answer

A)  At a price of $6, quantity demanded is equal to quantity supplied. 
B)  At a price of $4, quantity demanded is greater than quantity supplied. 
C)  At a price of $8, quantity demanded is less than quantity supplied. 
D)  All of the above answers are correct. 
A)  At a price of $6, quantity demanded is equal to quantity supplied. 
B)  At a price of $4, quantity demanded is greater than quantity supplied. 
C)  At a price of $8, quantity demanded is less than quantity supplied. 
D)  All of the above answers are correct.

Question 2

If the market for Twinkies is in equilibrium, then

Accepted Answer

A)  Twinkies must be a normal good. 
B)  producers would like to sell more at the current price. 
C)  consumers would like to buy more at the current price. 
D)  the quantity supplied equals the quantity demanded. 
A)  Twinkies must be a normal good. 
B)  producers would like to sell more at the current price. 
C)  consumers would like to buy more at the current price. 
D)  the quantity supplied equals the quantity demanded.

Question 3

Soft drinks are a normal good. Draw a graph showing the effect of an increase in income on the demand for soft drinks.

Accepted Answer

@#IMG-DLM& The increase in the income in

Question 4

Which of the following does NOT shift the demand curve for broccoli?

Accepted Answer

A)  an increase in the cost of fertilizer used to grow broccoli 
B)  a warning by the U.S. Surgeon General that broccoli causes schizophrenia 
C)  an increase in the price of spinach, a substitute for broccoli, because rodents gobbled up much of this year's spinach crop 
D)  a decrease in the price of spinach, a substitute for broccoli, because of a bumper crop of spinach this year 
A)  an increase in the cost of fertilizer used to grow broccoli 
B)  a warning by the U.S. Surgeon General that broccoli causes schizophrenia 
C)  an increase in the price of spinach, a substitute for broccoli, because rodents gobbled up much of this year's spinach crop 
D)  a decrease in the price of spinach, a substitute for broccoli, because of a bumper crop of spinach this year

Question 5

In the market for magazines, the "income effect" means that

Accepted Answer

A)  magazines are usually purchased by people with higher than average incomes. 
B)  a decrease in the price of a substitute product like books will make magazine readers feel a little poorer than they were before. 
C)  an increase in the price of magazines will reduce the total purchasing power of magazine readers, making them able to afford fewer magazines. 
D)  an increase in the price of magazines will raise the relative price of magazines to books, causing magazine readers to read more books and fewer magazines. 
A)  magazines are usually purchased by people with higher than average incomes. 
B)  a decrease in the price of a substitute product like books will make magazine readers feel a little poorer than they were before. 
C)  an increase in the price of magazines will reduce the total purchasing power of magazine readers, making them able to afford fewer magazines. 
D)  an increase in the price of magazines will raise the relative price of magazines to books, causing magazine readers to read more books and fewer magazines.

Question 6

A severe drought has damaged this year's lettuce crop. The initial effect on the lettuce market is a

Accepted Answer

A)  decrease in the demand for lettuce. 
B)  decrease in the supply of lettuce. 
C)  decrease in both the demand and supply of lettuce. 
D)  rightward movement along the demand curve for lettuce. 
A)  decrease in the demand for lettuce. 
B)  decrease in the supply of lettuce. 
C)  decrease in both the demand and supply of lettuce. 
D)  rightward movement along the demand curve for lettuce.

Question 7

A shortage causes the

Accepted Answer

A)  demand curve to shift leftward. 
B)  supply curve to shift rightward. 
C)  price to fall. 
D)  price to rise. 
A)  demand curve to shift leftward. 
B)  supply curve to shift rightward. 
C)  price to fall. 
D)  price to rise.

Question 8

-In the above figure, if D2 is the original demand curve and the price of a substitute in consumption rises, which price and quantity might result?

Accepted Answer

A)  point a, with price P2 and quantity Q2 
B)  point b, with price P1 and quantity Q1 
C)  point c, with price P3 and quantity Q3 
D)  point d, with price P1 and quantity Q3 
A)  point a, with price P2 and quantity Q2 
B)  point b, with price P1 and quantity Q1 
C)  point c, with price P3 and quantity Q3 
D)  point d, with price P1 and quantity Q3

Question 9

If the quantity supplied exceeds the quantity demanded, 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 10

-The above table shows the demand schedule and supply schedule for chocolate chip cookies. If the price is $4.00 per pound, there is a

Accepted Answer

A)  shortage of 2 pounds of chocolate chip cookies. 
B)  shortage of 3 pounds of chocolate chip cookies. 
C)  shortage of 5 pounds of chocolate chip cookies. 
D)  surplus of 3 pounds of chocolate chip cookies. 
A)  shortage of 2 pounds of chocolate chip cookies. 
B)  shortage of 3 pounds of chocolate chip cookies. 
C)  shortage of 5 pounds of chocolate chip cookies. 
D)  surplus of 3 pounds of chocolate chip cookies.

Question 11

The price of a bag of corn chips is $3, and the price of a bottle of soda is $1. What is the relative price of a bottle of soda?

Accepted Answer

A)  3 bags of corn chips per bottle of soda 
B)  1/3 bag of corn chips per bottle of soda 
C)  $3 
D)  33¢ 
A)  3 bags of corn chips per bottle of soda 
B)  1/3 bag of corn chips per bottle of soda 
C)  $3 
D)  33¢

Question 12

-The above figures show the market for hamburger meat. Which figure shows the effect of a newly invented machine which grinds beef at twice the speed previously possible?

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 13

If a decrease in the price of gasoline increases the demand for large cars, then

Accepted Answer

A)  gasoline and large cars are substitutes in consumption. 
B)  gasoline and large cars are complements in consumption. 
C)  gasoline is an inferior good. 
D)  large cars are an inferior good. 
A)  gasoline and large cars are substitutes in consumption. 
B)  gasoline and large cars are complements in consumption. 
C)  gasoline is an inferior good. 
D)  large cars are an inferior good.

Question 14

-The above figures show the market for hamburger meat. Which figure shows the effect when more farmers decide to raise cows that are processed into hamburger meat?

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 15

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in the price of a complement for fruit snacks?

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 16

Consumers expect that the price of a gallon of gasoline will rise next week. As a result

Accepted Answer

A)  today's supply of gasoline increases. 
B)  today's demand for gasoline increases. 
C)  the price of a gallon of gasoline falls today. 
D)  next week's supply of gasoline decreases. 
A)  today's supply of gasoline increases. 
B)  today's demand for gasoline increases. 
C)  the price of a gallon of gasoline falls today. 
D)  next week's supply of gasoline decreases.

Question 17

-The above table shows the demand schedule and supply schedule for chocolate chip cookies. An increase in income results in an increase in the demand for chocolate cookies by an amount of 3 pounds at every price. What are the new equilibrium quantity and equilibrium price?

Accepted Answer

A)  5 pounds, $4.00 per pound 
B)  5 pounds, $6.00 per pound 
C)  5 pounds, $5.00 per pound 
D)  4 pounds, $5.00 per pound 
A)  5 pounds, $4.00 per pound 
B)  5 pounds, $6.00 per pound 
C)  5 pounds, $5.00 per pound 
D)  4 pounds, $5.00 per pound

Question 18

A decrease in the expected future price of cars

Accepted Answer

A)  increases the current quantity demanded of cars, that is, there is a movement downward along the demand curve for cars. 
B)  increases the current demand for cars, that is, there is a rightward shift of the demand curve for cars. 
C)  decreases the current quantity demanded of cars, that is, there is a movement upward along the demand curve for cars. 
D)  decreases the current demand for cars, that is, there is a leftward shift of the demand curve for cars. 
A)  increases the current quantity demanded of cars, that is, there is a movement downward along the demand curve for cars. 
B)  increases the current demand for cars, that is, there is a rightward shift of the demand curve for cars. 
C)  decreases the current quantity demanded of cars, that is, there is a movement upward along the demand curve for cars. 
D)  decreases the current demand for cars, that is, there is a leftward shift of the demand curve for cars.

Question 19

For a "change in the quantity supplied" but not "a change in supply" to occur, there must be a

Accepted Answer

A)  rightward shift of the supply curve. 
B)  rightward shift of the demand curve. 
C)  leftward shift of the demand curve. 
D)  Both answers B and C are correct. 
A)  rightward shift of the supply curve. 
B)  rightward shift of the demand curve. 
C)  leftward shift of the demand curve. 
D)  Both answers B and C are correct.

Question 20

Explain the difference between a change in demand and a change in quantity demanded. What leads to each of these changes?

Accepted Answer

A change in demand occurs when consumers

-Based on the above figure, which of the following is TRUE?

If the market for Twinkies is in equilibrium, then

Soft drinks are a normal good. Draw a graph showing the effect of an increase in income on the demand for soft drinks.

Which of the following does NOT shift the demand curve for broccoli?

In the market for magazines, the "income effect" means that

A severe drought has damaged this year's lettuce crop. The initial effect on the lettuce market is a

A shortage causes the

-In the above figure, if D₂ is the original demand curve and the price of a substitute in consumption rises, which price and quantity might result?

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

-The above table shows the demand schedule and supply schedule for chocolate chip cookies. If the price is $4.00 per pound, there is a

The price of a bag of corn chips is $3, and the price of a bottle of soda is $1. What is the relative price of a bottle of soda?

-The above figures show the market for hamburger meat. Which figure shows the effect of a newly invented machine which grinds beef at twice the speed previously possible?

If a decrease in the price of gasoline increases the demand for large cars, then

-The above figures show the market for hamburger meat. Which figure shows the effect when more farmers decide to raise cows that are processed into hamburger meat?

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in the price of a complement for fruit snacks?

Consumers expect that the price of a gallon of gasoline will rise next week. As a result

-The above table shows the demand schedule and supply schedule for chocolate chip cookies. An increase in income results in an increase in the demand for chocolate cookies by an amount of 3 pounds at every price. What are the new equilibrium quantity and equilibrium price?

A decrease in the expected future price of cars

For a "change in the quantity supplied" but not "a change in supply" to occur, there must be a

Explain the difference between a change in demand and a change in quantity demanded. What leads to each of these changes?

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

-Based on the above figure, which of the following is TRUE?

If the market for Twinkies is in equilibrium, then

Soft drinks are a normal good. Draw a graph showing the effect of an increase in income on the demand for soft drinks.

Which of the following does NOT shift the demand curve for broccoli?

In the market for magazines, the "income effect" means that

A severe drought has damaged this year's lettuce crop. The initial effect on the lettuce market is a

A shortage causes the

-In the above figure, if D2 is the original demand curve and the price of a substitute in consumption rises, which price and quantity might result?

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

-The above table shows the demand schedule and supply schedule for chocolate chip cookies. If the price is $4.00 per pound, there is a

The price of a bag of corn chips is $3, and the price of a bottle of soda is $1. What is the relative price of a bottle of soda?

-The above figures show the market for hamburger meat. Which figure shows the effect of a newly invented machine which grinds beef at twice the speed previously possible?

If a decrease in the price of gasoline increases the demand for large cars, then

-The above figures show the market for hamburger meat. Which figure shows the effect when more farmers decide to raise cows that are processed into hamburger meat?

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in the price of a complement for fruit snacks?

Consumers expect that the price of a gallon of gasoline will rise next week. As a result

-The above table shows the demand schedule and supply schedule for chocolate chip cookies. An increase in income results in an increase in the demand for chocolate cookies by an amount of 3 pounds at every price. What are the new equilibrium quantity and equilibrium price?

A decrease in the expected future price of cars

For a "change in the quantity supplied" but not "a change in supply" to occur, there must be a

Explain the difference between a change in demand and a change in quantity demanded. What leads to each of these changes?

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 original demand curve and the price of a substitute in consumption rises, which price and quantity might result?