Question 1

What happens to the demand for Xbox games if the price of an Xbox falls?

Accepted Answer

A)  The demand for Xboxes decreases because the price of a substitute falls. 
B)  The demand for Xboxes increases because the price of a complement falls. 
C)  The demand for Xboxes decreases because the price of a complement falls. 
D)  The demand for Xboxes remains unchanged. 
A)  The demand for Xboxes decreases because the price of a substitute falls. 
B)  The demand for Xboxes increases because the price of a complement falls. 
C)  The demand for Xboxes decreases because the price of a complement falls. 
D)  The demand for Xboxes remains unchanged.

Question 2

Joe pays $8,000.00 in tuition. The 8,000 dollar tuition Joe pays is an example of what economists call

Accepted Answer

A)  a relative price. 
B)  a money price. 
C)  an indexed price. 
D)  an opportunity price. 
A)  a relative price. 
B)  a money price. 
C)  an indexed price. 
D)  an opportunity price.

Question 3

-The above figure shows the market for pizza. Which figure shows the effect of an increase in the price of the tomato sauce used to produce pizza?

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 4

If macaroni and cheese is an inferior good, an increase in income will

Accepted Answer

A)  not affect the demand for macaroni and cheese. 
B)  decrease the demand for macaroni and cheese. 
C)  increase the demand for macaroni and cheese. 
D)  create no income effect. 
A)  not affect the demand for macaroni and cheese. 
B)  decrease the demand for macaroni and cheese. 
C)  increase the demand for macaroni and cheese. 
D)  create no income effect.

Question 5

The equilibrium price is the price at which the quantity

Accepted Answer

A)  sold equals the quantity bought. 
B)  demanded equals the quantity sold. 
C)  demanded equals the quantity supplied. 
D)  supplied equals the quantity bought. 
A)  sold equals the quantity bought. 
B)  demanded equals the quantity sold. 
C)  demanded equals the quantity supplied. 
D)  supplied equals the quantity bought.

Question 6

Homer changes jobs and his new job pays him a higher income. Before he changed jobs, Homer purchased 3 pounds of tuna and 2 pounds of chicken. After he changed jobs, Homer now purchases 2 pounds of tuna and 3 pounds of chicken. For Homer

Accepted Answer

A)  tuna is a normal good and chicken is an inferior good. 
B)  tuna is an inferior good and chicken is a normal good. 
C)  both tuna and chicken are normal goods. 
D)  both tuna and chicken are inferior goods. 
A)  tuna is a normal good and chicken is an inferior good. 
B)  tuna is an inferior good and chicken is a normal good. 
C)  both tuna and chicken are normal goods. 
D)  both tuna and chicken are inferior goods.

Question 7

-The above figures show the market for gasoline. Which figure(s) shows the effect of a new U.S. tax on oil that suppliers must pay?

Accepted Answer

A)  Figures A and C 
B)  Figures B and D 
C)  Figure A only 
D)  Figure C only 
A)  Figures A and C 
B)  Figures B and D 
C)  Figure A only 
D)  Figure C only

Question 8

Your friend Tony opened a pizzeria. You helped him to advertise his pizza, which is in fact the best pizza in town. As a result, the demand for Tony's pizza increases and your friend, noticing lines of customers, raises the price of his pizza. But then he fears that the higher price will cause demand to decline, which will cause the price to drop. Is Tony right in his analysis of the situation? Explain.

Accepted Answer

Tony is confusing a change in demand (a

Question 9

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

Accepted Answer

A)  is willing to buy at a particular price during a given time period. 
B)  actually buys at a particular price during a given time period. 
C)  needs to buy at a particular price during a given time period. 
D)  should buy at a particular price during a given time period. 
A)  is willing to buy at a particular price during a given time period. 
B)  actually buys at a particular price during a given time period. 
C)  needs to buy at a particular price during a given time period. 
D)  should buy at a particular price during a given time period.

Question 10

An increase in the number of consumers

Accepted Answer

A)  results only in a movement along the demand curve. 
B)  shifts the supply curve leftward. 
C)  shifts the demand curve rightward. 
D)  Both answers B and C are correct. 
A)  results only in a movement along the demand curve. 
B)  shifts the supply curve leftward. 
C)  shifts the demand curve rightward. 
D)  Both answers B and C are correct.

Question 11

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

Accepted Answer

A)  producers wish they could sell at a higher price. 
B)  is actually bought during a given time period at a given price. 
C)  people are willing to buy during a given time period at a given price. 
D)  producers plan to sell during a given time period at a given price. 
A)  producers wish they could sell at a higher price. 
B)  is actually bought during a given time period at a given price. 
C)  people are willing to buy during a given time period at a given price. 
D)  producers plan to sell during a given time period at a given price.

Question 12

The quantity of CDs that firms plan to sell this month depends on all of the following except the

Accepted Answer

A)  number of producers of CDs. 
B)  quantity of CDs that people plan to buy. 
C)  wage rate of workers who produce CDs. 
D)  price of a CD. 
A)  number of producers of CDs. 
B)  quantity of CDs that people plan to buy. 
C)  wage rate of workers who produce CDs. 
D)  price of a CD.

Question 13

When graphing a demand curve for corn, we are showing the relationship between the quantity demanded of corn and the

Accepted Answer

A)  money price of corn. 
B)  relative price of corn. 
C)  income effect. 
D)  substitution effect. 
A)  money price of corn. 
B)  relative price of corn. 
C)  income effect. 
D)  substitution effect.

Question 14

If the money price of hats rises and no other prices change, the I. relative price of a hat rises.
II) opportunity cost of a hat rises.

Accepted Answer

A)  only I 
B)  both I and II 
C)  only II 
D)  neither I nor II 
A)  only I 
B)  both I and II 
C)  only II 
D)  neither I nor II

Question 15

If shoes rise in price, the demand curve for shoes ________ and the quantity of shoes demanded ________.

Accepted Answer

A)  shifts leftward; decreases 
B)  shifts leftward; does not change 
C)  does not shift; decreases 
D)  does not shift; does not change 
A)  shifts leftward; decreases 
B)  shifts leftward; does not change 
C)  does not shift; decreases 
D)  does not shift; does not change

Question 16

-In the above figure, what is the minimum supply price for the fourth gallon of ice cream?

Accepted Answer

A)  $2.00 
B)  $3.00 
C)  $4.00 
D)  $5.00 
A)  $2.00 
B)  $3.00 
C)  $4.00 
D)  $5.00

Question 17

-The figure above shows supply curves for soft drinks. Suppose the economy is at point a. A movement to point c could be the result of

Accepted Answer

A)  a decrease in technology. 
B)  a decrease in the relative price of a soft drink. 
C)  an increase in the relative price of a soft drink. 
D)  an increase in the money price of a soft drink. 
A)  a decrease in technology. 
B)  a decrease in the relative price of a soft drink. 
C)  an increase in the relative price of a soft drink. 
D)  an increase in the money price of a soft drink.

Question 18

Crude oil can be refined into home heating oil or gasoline. If very cold weather caused the price of home heating oil to increase then, the

Accepted Answer

A)  supply of gasoline would increase. 
B)  demand for gasoline would increase. 
C)  equilibrium price of gasoline would rise. 
D)  Both answers A and C are correct. 
A)  supply of gasoline would increase. 
B)  demand for gasoline would increase. 
C)  equilibrium price of gasoline would rise. 
D)  Both answers A and C are correct.

Question 19

Personal computers are becoming less expensive as new technology reduces the cost of production. In a supply and demand model, explain the effects of the technological innovations and their effect on the quantity of computers.

Accepted Answer

Advances in technology increase the supp

Question 20

An increase in price results in increase in supply but not an increase in the quantity supplied.

Accepted Answer

A) True 
 B)False

What happens to the demand for Xbox games if the price of an Xbox falls?

Joe pays $8,000.00 in tuition. The 8,000 dollar tuition Joe pays is an example of what economists call

-The above figure shows the market for pizza. Which figure shows the effect of an increase in the price of the tomato sauce used to produce pizza?

If macaroni and cheese is an inferior good, an increase in income will

The equilibrium price is the price at which the quantity

Homer changes jobs and his new job pays him a higher income. Before he changed jobs, Homer purchased 3 pounds of tuna and 2 pounds of chicken. After he changed jobs, Homer now purchases 2 pounds of tuna and 3 pounds of chicken. For Homer

-The above figures show the market for gasoline. Which figure(s) shows the effect of a new U.S. tax on oil that suppliers must pay?

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

An increase in the number of consumers

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

The quantity of CDs that firms plan to sell this month depends on all of the following except the

When graphing a demand curve for corn, we are showing the relationship between the quantity demanded of corn and the

If the money price of hats rises and no other prices change, the I. relative price of a hat rises. II) opportunity cost of a hat rises.

If shoes rise in price, the demand curve for shoes and the quantity of shoes demanded .

-In the above figure, what is the minimum supply price for the fourth gallon of ice cream?

-The figure above shows supply curves for soft drinks. Suppose the economy is at point a. A movement to point c could be the result of

Crude oil can be refined into home heating oil or gasoline. If very cold weather caused the price of home heating oil to increase then, the

Personal computers are becoming less expensive as new technology reduces the cost of production. In a supply and demand model, explain the effects of the technological innovations and their effect on the quantity of computers.

An increase in price results in increase in supply but not an increase in the quantity supplied.

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 happens to the demand for Xbox games if the price of an Xbox falls?

Joe pays $8,000.00 in tuition. The 8,000 dollar tuition Joe pays is an example of what economists call

-The above figure shows the market for pizza. Which figure shows the effect of an increase in the price of the tomato sauce used to produce pizza?

If macaroni and cheese is an inferior good, an increase in income will

The equilibrium price is the price at which the quantity

Homer changes jobs and his new job pays him a higher income. Before he changed jobs, Homer purchased 3 pounds of tuna and 2 pounds of chicken. After he changed jobs, Homer now purchases 2 pounds of tuna and 3 pounds of chicken. For Homer

-The above figures show the market for gasoline. Which figure(s) shows the effect of a new U.S. tax on oil that suppliers must pay?

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

An increase in the number of consumers

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

The quantity of CDs that firms plan to sell this month depends on all of the following except the

When graphing a demand curve for corn, we are showing the relationship between the quantity demanded of corn and the

If the money price of hats rises and no other prices change, the I. relative price of a hat rises. II) opportunity cost of a hat rises.

If shoes rise in price, the demand curve for shoes ________ and the quantity of shoes demanded ________.

-In the above figure, what is the minimum supply price for the fourth gallon of ice cream?

-The figure above shows supply curves for soft drinks. Suppose the economy is at point a. A movement to point c could be the result of

Crude oil can be refined into home heating oil or gasoline. If very cold weather caused the price of home heating oil to increase then, the

Personal computers are becoming less expensive as new technology reduces the cost of production. In a supply and demand model, explain the effects of the technological innovations and their effect on the quantity of computers.

An increase in price results in increase in supply but not an increase in the quantity supplied.

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

If shoes rise in price, the demand curve for shoes and the quantity of shoes demanded .