Question 1

The opportunity cost of a good is the same as its

Accepted Answer

A)  money price. 
B)  relative price. 
C)  price index. 
D)  none of the above. 
A)  money price. 
B)  relative price. 
C)  price index. 
D)  none of the above.

Question 2

What are substitutes in production?

Accepted Answer

Goods are substitutes in produ

Question 3

A change in which of the following alters buying plans for cars but does NOT shift the demand curve for cars?

Accepted Answer

A)  a 5 percent increase in people's income 
B)  a 10 percent decrease in the price of car insurance 
C)  a 20 percent increase in the price of a car 
D)  an increased preference for walking rather than driving 
A)  a 5 percent increase in people's income 
B)  a 10 percent decrease in the price of car insurance 
C)  a 20 percent increase in the price of a car 
D)  an increased preference for walking rather than driving

Question 4

Wages for workers producing iPods and similar products will rise next year. Walkman Watch asks you to predict the effect of this change in next year's market for iPods. You predict that the major effect will be that the

Accepted Answer

A)  demand curve for an iPod will shift rightward. 
B)  demand curve for an iPod will shift leftward. 
C)  supply curve for an iPod will shift leftward. 
D)  supply curve for an iPod will shift rightward. 
A)  demand curve for an iPod will shift rightward. 
B)  demand curve for an iPod will shift leftward. 
C)  supply curve for an iPod will shift leftward. 
D)  supply curve for an iPod will shift rightward.

Question 5

An inferior good is a good for which demand

Accepted Answer

A)  decreases when income increases. 
B)  increases when income increases. 
C)  decreases when population increases. 
D)  increases when population increases. 
A)  decreases when income increases. 
B)  increases when income increases. 
C)  decreases when population increases. 
D)  increases when population increases.

Question 6

-The above figure shows the market for pizza. Which figure shows the effect of a new report by the U.S. Surgeon General that eating pizza lowers cholesterol levels, an outcome many people want?

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 7

The relative price of a good is

Accepted Answer

A)  an opportunity cost. 
B)  equal to the money price of a good. 
C)  equal to the price of that good divided by the quantity demanded of the good. 
D)  what you get paid for babysitting your cousin. 
A)  an opportunity cost. 
B)  equal to the money price of a good. 
C)  equal to the price of that good divided by the quantity demanded of the good. 
D)  what you get paid for babysitting your cousin.

Question 8

An economist says: "The supply curve has two interpretations." What does the economist mean?

Accepted Answer

The first interpretation is that the sup

Question 9

People buy more of good 1 when the price of good 2 rises. These goods are

Accepted Answer

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

Question 10

Which of the following decreases the supply of popcorn?

Accepted Answer

A)  a decrease in the price of popcorn 
B)  an increase in the price of popcorn 
C)  a technological advance in the production of popcorn 
D)  a decrease in the number of popcorn producers 
A)  a decrease in the price of popcorn 
B)  an increase in the price of popcorn 
C)  a technological advance in the production of popcorn 
D)  a decrease in the number of popcorn producers

Question 11

If income decreases or the price of a complement rises

Accepted Answer

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

Question 12

In 2014, the price of peanuts was rising, which lead peanut butter sellers and peanut butter buyers to expect the price of peanut butter would rise in the future. Suppose the effect on the buyers was larger than the effect on the sellers. Consequently, in the current market for peanut butter there is a ________ in the price of peanut butter and ________ in the quantity of peanut butter.

Accepted Answer

A)  rise; an increase 
B)  rise; a decrease 
C)  fall; a decrease 
D)  fall; an increase 
A)  rise; an increase 
B)  rise; a decrease 
C)  fall; a decrease 
D)  fall; an increase

Question 13

If the price of a hot dog is $2 and the price of a hamburger is $4, then the

Accepted Answer

A)  relative price of a hot dog is 1/2 of a hamburger per hot dog. 
B)  money price of a hot dog is 2 hamburgers per hot dog. 
C)  relative price of a hamburger is 1/2 of a hot dog per hamburger. 
D)  money price of a hamburger is 2 hot dogs per hamburger. 
A)  relative price of a hot dog is 1/2 of a hamburger per hot dog. 
B)  money price of a hot dog is 2 hamburgers per hot dog. 
C)  relative price of a hamburger is 1/2 of a hot dog per hamburger. 
D)  money price of a hamburger is 2 hot dogs per hamburger.

Question 14

Which of the following always lowers 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 15

-Using the above figure, suppose that roses are a normal good. If there is an increase in income

Accepted Answer

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

Question 16

A relative price is the

Accepted Answer

A)  slope of the demand curve. 
B)  difference between one money price and another. 
C)  slope of the supply curve. 
D)  ratio of one money price to another. 
A)  slope of the demand curve. 
B)  difference between one money price and another. 
C)  slope of the supply curve. 
D)  ratio of one money price to another.

Question 17

A recession occurs and people's incomes decrease. Knowing that an iPad is a normal good, you predict that the demand for an iPad

Accepted Answer

A)  increases. 
B)  decreases. 
C)  might increase or decrease. 
D)  remains unchanged. 
A)  increases. 
B)  decreases. 
C)  might increase or decrease. 
D)  remains unchanged.

Question 18

The price of the steel used to produce car engines increases. How does this price hike affect the demand curve for cars?

Accepted Answer

A)  The demand curve shifts leftward. 
B)  The demand curve shifts rightward. 
C)  The demand curve does not shift. 
D)  There is not enough information to tell how the change shifts the demand curve for cars. 
A)  The demand curve shifts leftward. 
B)  The demand curve shifts rightward. 
C)  The demand curve does not shift. 
D)  There is not enough information to tell how the change shifts the demand curve for cars.

Question 19

-The initial supply and demand curves for a good are illustrated in the above figure. If there is a rise in the price of a factor of production used to produce the good, then the new equilibrium price

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

Which of the following shifts the demand curve for hot dogs leftward?

Accepted Answer

A)  an increase in the price of a hot dog bun 
B)  a decrease in the price of a hot dog bun 
C)  an increase in the price of a hot dog 
D)  an increase in the price of a hamburger 
A)  an increase in the price of a hot dog bun 
B)  a decrease in the price of a hot dog bun 
C)  an increase in the price of a hot dog 
D)  an increase in the price of a hamburger

The opportunity cost of a good is the same as its

What are substitutes in production?

A change in which of the following alters buying plans for cars but does NOT shift the demand curve for cars?

Wages for workers producing iPods and similar products will rise next year. Walkman Watch asks you to predict the effect of this change in next year's market for iPods. You predict that the major effect will be that the

An inferior good is a good for which demand

-The above figure shows the market for pizza. Which figure shows the effect of a new report by the U.S. Surgeon General that eating pizza lowers cholesterol levels, an outcome many people want?

The relative price of a good is

An economist says: "The supply curve has two interpretations." What does the economist mean?

People buy more of good 1 when the price of good 2 rises. These goods are

Which of the following decreases the supply of popcorn?

If income decreases or the price of a complement rises

If the price of a hot dog is $2 and the price of a hamburger is $4, then the

Which of the following always lowers the equilibrium price?

-Using the above figure, suppose that roses are a normal good. If there is an increase in income

A relative price is the

A recession occurs and people's incomes decrease. Knowing that an iPad is a normal good, you predict that the demand for an iPad

The price of the steel used to produce car engines increases. How does this price hike affect the demand curve for cars?

-The initial supply and demand curves for a good are illustrated in the above figure. If there is a rise in the price of a factor of production used to produce the good, then the new equilibrium price

Which of the following shifts the demand curve for hot dogs leftward?

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 opportunity cost of a good is the same as its

What are substitutes in production?

A change in which of the following alters buying plans for cars but does NOT shift the demand curve for cars?

Wages for workers producing iPods and similar products will rise next year. Walkman Watch asks you to predict the effect of this change in next year's market for iPods. You predict that the major effect will be that the

An inferior good is a good for which demand

-The above figure shows the market for pizza. Which figure shows the effect of a new report by the U.S. Surgeon General that eating pizza lowers cholesterol levels, an outcome many people want?

The relative price of a good is

An economist says: "The supply curve has two interpretations." What does the economist mean?

People buy more of good 1 when the price of good 2 rises. These goods are

Which of the following decreases the supply of popcorn?

If income decreases or the price of a complement rises

If the price of a hot dog is $2 and the price of a hamburger is $4, then the

Which of the following always lowers the equilibrium price?

-Using the above figure, suppose that roses are a normal good. If there is an increase in income

A relative price is the

A recession occurs and people's incomes decrease. Knowing that an iPad is a normal good, you predict that the demand for an iPad

The price of the steel used to produce car engines increases. How does this price hike affect the demand curve for cars?

-The initial supply and demand curves for a good are illustrated in the above figure. If there is a rise in the price of a factor of production used to produce the good, then the new equilibrium price

Which of the following shifts the demand curve for hot dogs leftward?

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