Question 1

Figure 3-2  
-Refer to Figure 3-2.An increase in the price of the product would be represented by a movement from

Accepted Answer

A) A to B. 
B) B to A. 
C) S1 to S2. 
D) S2 to S1. 
A) A to B. 
B) B to A. 
C) S1 to S2. 
D) S2 to S1.

Question 2

In January,buyers of gold expect that the price of gold will fall in February.What happens in the gold market in January,holding everything else constant?

Accepted Answer

A) The demand curve shifts to the right. 
B) The quantity demanded increases. 
C) The quantity demanded decreases. 
D) The demand curve shifts to the left. 
A) The demand curve shifts to the right. 
B) The quantity demanded increases. 
C) The quantity demanded decreases. 
D) The demand curve shifts to the left.

Question 3

What would happen in the market for knee replacement surgery if insurance companies started to cover a smaller portion of the cost of the surgery?

Accepted Answer

A) Demand will decrease,but this will not shift the supply curve. 
B) Supply will decrease,but this will not shift the demand curve. 
C) Demand and supply will both decrease. 
D) Demand will decrease and supply will increase. 
A) Demand will decrease,but this will not shift the supply curve. 
B) Supply will decrease,but this will not shift the demand curve. 
C) Demand and supply will both decrease. 
D) Demand will decrease and supply will increase.

Question 4

An increase in the demand for peanuts due to changes in consumer tastes,accompanied by an increase in the supply of peanuts as a result of favorable growing conditions,will result in

Accepted Answer

A) an increase in the equilibrium quantity of peanuts and no change in the equilibrium price. 
B) an increase in the equilibrium price of peanuts and no change in the equilibrium quantity. 
C) an increase in the equilibrium price of peanuts; the equilibrium quantity may increase or decrease. 
D) an increase in the equilibrium quantity of peanuts; the equilibrium price may increase or decrease. 
A) an increase in the equilibrium quantity of peanuts and no change in the equilibrium price. 
B) an increase in the equilibrium price of peanuts and no change in the equilibrium quantity. 
C) an increase in the equilibrium price of peanuts; the equilibrium quantity may increase or decrease. 
D) an increase in the equilibrium quantity of peanuts; the equilibrium price may increase or decrease.

Question 5

A demand curve shows the relationship between

Accepted Answer

A) the price of a product and the quantity of the product demanded. 
B) the amount of a product sellers are willing to sell at a particular price and the amount consumers are willing to buy at that price. 
C) the quantity that consumers are willing and able to buy and the quantity that sellers are willing and able to offer. 
D) the price of a produce and the demand for the product. 
A) the price of a product and the quantity of the product demanded. 
B) the amount of a product sellers are willing to sell at a particular price and the amount consumers are willing to buy at that price. 
C) the quantity that consumers are willing and able to buy and the quantity that sellers are willing and able to offer. 
D) the price of a produce and the demand for the product.

Question 6

In each of the following situations,list what will happen to the equilibrium price and the equilibrium quantity for a particular product,which is an inferior good.
a.The population decreases and productivity increases
b.Income increases and the price of inputs increase
c.The number of firms in the market decreases and income decreases
d.Consumer preference decreases and the price of a complement increases
e.The price of a substitute in consumption increases and the price of a substitute in production increases

Accepted Answer

a.Price decreases; Quantity may increase

Question 7

A change in which variable will change the market demand for a product?

Accepted Answer

A) the price of the product 
B) expected future prices 
C) the number of firms in the market 
D) the quantity of the product supplied 
A) the price of the product 
B) expected future prices 
C) the number of firms in the market 
D) the quantity of the product supplied

Question 8

Figure 3-2  
-Refer to Figure 3-2.A decrease in the price of substitutes in production would be represented by a movement from

Accepted Answer

A) A to B. 
B) B to A. 
C) S1 to S2. 
D) S2 to S1. 
A) A to B. 
B) B to A. 
C) S1 to S2. 
D) S2 to S1.

Question 9

If the price of a product is expected to increase in the future,the supply today will increase.

Accepted Answer

A) True 
 B)False

Question 10

Use the following supply schedule for cherries to draw a graph of the supply curve.Be sure to label the supply curve and each axis,and show each point on the supply curve.

Accepted Answer

The answer of Use the following supply schedule for cherries...

Question 11

Hurricane Katrina damaged a large portion of oil refining and pipeline capacity in the Gulf coast states.In the market for gasoline

Accepted Answer

A) the supply curve shifted to the left resulting in an increase in the equilibrium price. 
B) the supply curve shifted to the right resulting in an increase in the equilibrium price. 
C) the demand curve shifted to the left resulting in a decrease in the equilibrium price. 
D) the demand curve shifted to the right resulting in an increase in the equilibrium price. 
A) the supply curve shifted to the left resulting in an increase in the equilibrium price. 
B) the supply curve shifted to the right resulting in an increase in the equilibrium price. 
C) the demand curve shifted to the left resulting in a decrease in the equilibrium price. 
D) the demand curve shifted to the right resulting in an increase in the equilibrium price.

Question 12

If the demand curve for a product shifts to the right and the supply curve for the product shifts to the left,equilibrium price and equilibrium quantity will both increase.

Accepted Answer

A) True 
 B)False

Question 13

Assume that in recent years the cost of producing microbrew beer in the U.S.has decreased largely due to technological improvements.At the same time,more and more Americans prefer microbrew beer over wine.Which of the following best explains the effect of these events in the microbrew beer market?

Accepted Answer

A) The supply curve has shifted to the right and the demand curve has shifted to the left.As a result there has been a decrease in the equilibrium quantity and an uncertain effect on the equilibrium price. 
B) Both the supply and demand curves have shifted to the right.As a result,there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price. 
C) Both the supply and demand curves have shifted to the right.As a result,there has been an increase in both the equilibrium price and the equilibrium quantity. 
D) The supply curve has shifted to the left and the demand curve has shifted to the right.As a result,there has been an increase in the equilibrium price and an uncertain effect on the equilibrium quantity. 
A) The supply curve has shifted to the right and the demand curve has shifted to the left.As a result there has been a decrease in the equilibrium quantity and an uncertain effect on the equilibrium price. 
B) Both the supply and demand curves have shifted to the right.As a result,there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price. 
C) Both the supply and demand curves have shifted to the right.As a result,there has been an increase in both the equilibrium price and the equilibrium quantity. 
D) The supply curve has shifted to the left and the demand curve has shifted to the right.As a result,there has been an increase in the equilibrium price and an uncertain effect on the equilibrium quantity.

Question 14

If the price of pork rinds falls,then the substitution effect due to the price change will cause

Accepted Answer

A) an increase in the demand for pork rinds. 
B) an increase in the demand for corn chips,a substitute for pork rinds. 
C) an increase in the quantity of pork rinds demanded. 
D) a decrease in the quantity of pork rinds demanded. 
A) an increase in the demand for pork rinds. 
B) an increase in the demand for corn chips,a substitute for pork rinds. 
C) an increase in the quantity of pork rinds demanded. 
D) a decrease in the quantity of pork rinds demanded.

Question 15

George Gnat subscribes to a monthly pest control service for his home.Last week,the owner of the service informed George that he will have to raise his monthly service fee because of increases in the price of gasoline used by his workers on their service trips.How is the market for pest control services affected by this?

Accepted Answer

A) There is an increase in the supply of pest control services. 
B) There is a decrease in the demand for pest control services. 
C) There is a decrease in the quantity of pest control services supplied. 
D) There is a decrease in the supply of pest control services. 
A) There is an increase in the supply of pest control services. 
B) There is a decrease in the demand for pest control services. 
C) There is a decrease in the quantity of pest control services supplied. 
D) There is a decrease in the supply of pest control services.

Question 16

An inferior good is a good for which the quantity demanded increases as the price decreases,holding everything else constant.

Accepted Answer

A) True 
 B)False

Question 17

A decrease in the number of firms in a market will cause supply to increase.

Accepted Answer

A) True 
 B)False

Question 18

Figure 3-1  
-Refer to Figure 3-1.If the product represented is an inferior good,a decrease in income would be represented by a movement from

Accepted Answer

A) A to B. 
B) B to A. 
C) D1 to D2. 
D) D2 to D1. 
A) A to B. 
B) B to A. 
C) D1 to D2. 
D) D2 to D1.

Question 19

If consumers believe the price of hybrid vehicles will decrease in the future,this will cause the demand for hybrid vehicles to decrease now.

Accepted Answer

A) True 
 B)False

Question 20

Suppose consumer preference for organic corn starts to rise while the cost of growing organic corn continues to rise.In the market for organic corn,this would be represented by the equilibrium price ________ and the equilibrium quantity ________.

Accepted Answer

A) increasing; increasing or decreasing 
B) decreasing; increasing or decreasing 
C) increasing or decreasing; increasing 
D) increasing or decreasing; decreasing 
A) increasing; increasing or decreasing 
B) decreasing; increasing or decreasing 
C) increasing or decreasing; increasing 
D) increasing or decreasing; decreasing

Figure 3-2 -Refer to Figure 3-2.An increase in the price of the product would be represented by a movement from

In January,buyers of gold expect that the price of gold will fall in February.What happens in the gold market in January,holding everything else constant?

What would happen in the market for knee replacement surgery if insurance companies started to cover a smaller portion of the cost of the surgery?

An increase in the demand for peanuts due to changes in consumer tastes,accompanied by an increase in the supply of peanuts as a result of favorable growing conditions,will result in

A demand curve shows the relationship between

A change in which variable will change the market demand for a product?

Figure 3-2 -Refer to Figure 3-2.A decrease in the price of substitutes in production would be represented by a movement from

If the price of a product is expected to increase in the future,the supply today will increase.

Use the following supply schedule for cherries to draw a graph of the supply curve.Be sure to label the supply curve and each axis,and show each point on the supply curve.

Hurricane Katrina damaged a large portion of oil refining and pipeline capacity in the Gulf coast states.In the market for gasoline

If the demand curve for a product shifts to the right and the supply curve for the product shifts to the left,equilibrium price and equilibrium quantity will both increase.

Assume that in recent years the cost of producing microbrew beer in the U.S.has decreased largely due to technological improvements.At the same time,more and more Americans prefer microbrew beer over wine.Which of the following best explains the effect of these events in the microbrew beer market?

If the price of pork rinds falls,then the substitution effect due to the price change will cause

An inferior good is a good for which the quantity demanded increases as the price decreases,holding everything else constant.

A decrease in the number of firms in a market will cause supply to increase.

Figure 3-1 -Refer to Figure 3-1.If the product represented is an inferior good,a decrease in income would be represented by a movement from

If consumers believe the price of hybrid vehicles will decrease in the future,this will cause the demand for hybrid vehicles to decrease now.

Suppose consumer preference for organic corn starts to rise while the cost of growing organic corn continues to rise.In the market for organic corn,this would be represented by the equilibrium price and the equilibrium quantity .

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Economic Efficiency, Government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 3: Where Prices Come From: The Interaction of Demand and Supply

Figure 3-2 -Refer to Figure 3-2.An increase in the price of the product would be represented by a movement from

In January,buyers of gold expect that the price of gold will fall in February.What happens in the gold market in January,holding everything else constant?

What would happen in the market for knee replacement surgery if insurance companies started to cover a smaller portion of the cost of the surgery?

An increase in the demand for peanuts due to changes in consumer tastes,accompanied by an increase in the supply of peanuts as a result of favorable growing conditions,will result in

A demand curve shows the relationship between

A change in which variable will change the market demand for a product?

Figure 3-2 -Refer to Figure 3-2.A decrease in the price of substitutes in production would be represented by a movement from

If the price of a product is expected to increase in the future,the supply today will increase.

Use the following supply schedule for cherries to draw a graph of the supply curve.Be sure to label the supply curve and each axis,and show each point on the supply curve.

Hurricane Katrina damaged a large portion of oil refining and pipeline capacity in the Gulf coast states.In the market for gasoline

If the demand curve for a product shifts to the right and the supply curve for the product shifts to the left,equilibrium price and equilibrium quantity will both increase.

Assume that in recent years the cost of producing microbrew beer in the U.S.has decreased largely due to technological improvements.At the same time,more and more Americans prefer microbrew beer over wine.Which of the following best explains the effect of these events in the microbrew beer market?

If the price of pork rinds falls,then the substitution effect due to the price change will cause

An inferior good is a good for which the quantity demanded increases as the price decreases,holding everything else constant.

A decrease in the number of firms in a market will cause supply to increase.

Figure 3-1 -Refer to Figure 3-1.If the product represented is an inferior good,a decrease in income would be represented by a movement from

If consumers believe the price of hybrid vehicles will decrease in the future,this will cause the demand for hybrid vehicles to decrease now.

Suppose consumer preference for organic corn starts to rise while the cost of growing organic corn continues to rise.In the market for organic corn,this would be represented by the equilibrium price ________ and the equilibrium quantity ________.

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Economic Efficiency, Government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Suppose consumer preference for organic corn starts to rise while the cost of growing organic corn continues to rise.In the market for organic corn,this would be represented by the equilibrium price and the equilibrium quantity .