Question 1

If the population increases and input prices increase,the equilibrium price of a product will definitely increase.

Accepted Answer

A) True 
 B)False

Question 2

A firm has an incentive to decrease supply now and increase supply in the future if it expects that

Accepted Answer

A) more firms will enter the market in the future. 
B) the prices of inputs used to produce the product will rise in the future. 
C) the price of its product will be lower in the future than it is today. 
D) the price of its product will be higher in the future than it is today. 
A) more firms will enter the market in the future. 
B) the prices of inputs used to produce the product will rise in the future. 
C) the price of its product will be lower in the future than it is today. 
D) the price of its product will be higher in the future than it is today.

Question 3

Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for sushi if the Surgeon General announces that a majority of the raw fish that is imported to make sushi contains high levels of toxic mercury?

Accepted Answer

A) D decreases,S no change,P and Q decrease. 
B) S decreases,D no change,P increases,Q decreases. 
C) D and S decrease,P and Q decrease. 
D) D no change,S increases,P decreases,Q decreases. 
A) D decreases,S no change,P and Q decrease. 
B) S decreases,D no change,P increases,Q decreases. 
C) D and S decrease,P and Q decrease. 
D) D no change,S increases,P decreases,Q decreases.

Question 4

Figure 3-7  
-Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for blu-ray discs.Which panel best describes what happens in this market if there is a substantial increase in the price of blu-ray players?

Accepted Answer

A) Panel (a) 
B) Panel (b) 
C) Panel (c) 
D) Panel (d) 
A) Panel (a) 
B) Panel (b) 
C) Panel (c) 
D) Panel (d)

Question 5

Figure 3-7  
-Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for mustard and that bratwurst and mustard are complements.What panel describes what happens in this market when the price of bratwurst falls?

Accepted Answer

A) Panel (a) 
B) Panel (b) 
C) Panel (c) 
D) Panel (d) 
A) Panel (a) 
B) Panel (b) 
C) Panel (c) 
D) Panel (d)

Question 6

Figure 3-5  
-Refer to Figure 3-5.At a price of $0

Accepted Answer

A) there is a surplus of 8 units. 
B) there is a surplus of 0 units. 
C) there is a shortage of 0 units. 
D) there is a shortage of 8 units. 
A) there is a surplus of 8 units. 
B) there is a surplus of 0 units. 
C) there is a shortage of 0 units. 
D) there is a shortage of 8 units.

Question 7

Table 3-1
  
-Refer to Table 3-1.The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi)and the rest of the market.At a price of $4,the quantity demanded in the market would be

Accepted Answer

A) 40 lbs. 
B) 70 lbs. 
C) 110 lbs. 
D) 150 lbs. 
A) 40 lbs. 
B) 70 lbs. 
C) 110 lbs. 
D) 150 lbs.

Question 8

"The price of digital cameras fell because of improvements in production technology.As a result,the demand for non-digital cameras decreased.This caused the price of non-digital cameras to fall; as the price of non-digital cameras fell the demand for non-digital cameras decreased even further." Evaluate this statement.

Accepted Answer

A) The statement is false because the demand for non-digital cameras would increase as the price of digital cameras fell. 
B) The statement is false.A decrease in the price of digital cameras would decrease the demand for non-digital cameras,but a decrease in the price of non-digital cameras would not cause the demand for non-digital cameras to decrease. 
C) The statement is false because it confuses the law of demand with the law of supply. 
D) The statement is false because digital camera producers would not reduce their prices as a result of improvements in technology; doing so would reduce their profits. 
A) The statement is false because the demand for non-digital cameras would increase as the price of digital cameras fell. 
B) The statement is false.A decrease in the price of digital cameras would decrease the demand for non-digital cameras,but a decrease in the price of non-digital cameras would not cause the demand for non-digital cameras to decrease. 
C) The statement is false because it confuses the law of demand with the law of supply. 
D) The statement is false because digital camera producers would not reduce their prices as a result of improvements in technology; doing so would reduce their profits.

Question 9

If consumers believe the price of tablet computers will increase in the future,this will cause the demand for tablet computers to decrease now.

Accepted Answer

A) True 
 B)False

Question 10

Using Richard Tedlow's "three phases of marketing," the premium bottled water industry is probably in

Accepted Answer

A) the first phase,where a very large number of firms are each producing a relatively small volume of premium bottled water. 
B) the second phase,where one or a few brands have attained high market shares by selling a large number of bottles of premium water at lower prices. 
C) the third phase,where the dominant firms have rapidly introduced a large number of premium bottled water varieties. 
D) The market for premium bottled water is too young to categorize using the "three phases of marketing." 
A) the first phase,where a very large number of firms are each producing a relatively small volume of premium bottled water. 
B) the second phase,where one or a few brands have attained high market shares by selling a large number of bottles of premium water at lower prices. 
C) the third phase,where the dominant firms have rapidly introduced a large number of premium bottled water varieties. 
D) The market for premium bottled water is too young to categorize using the "three phases of marketing."

Question 11

What are the five most important variables that shift the market supply curve?

Accepted Answer

Prices of inputs; Technologica

Question 12

Buyers scrambled to secure stocks of Australian wool following a forecast of an 11 percent decline in wool production.What happens in the Australian wool market as a result of this announcement?

Accepted Answer

A) The demand curve for Australian wool shifts to the left in anticipation of higher prices in the future. 
B) The demand curve for Australian wool shifts to the right in anticipation of higher prices in the future. 
C) The quantity of Australian wool demanded increases in anticipation of higher prices in the future. 
D) The quantity of Australian wool demanded decreases in anticipation of lower quantities in the future. 
A) The demand curve for Australian wool shifts to the left in anticipation of higher prices in the future. 
B) The demand curve for Australian wool shifts to the right in anticipation of higher prices in the future. 
C) The quantity of Australian wool demanded increases in anticipation of higher prices in the future. 
D) The quantity of Australian wool demanded decreases in anticipation of lower quantities in the future.

Question 13

If,in response to a decrease in the price of coffee,the quantity of coffee demanded increases,then economists would describe this as

Accepted Answer

A) an increase in demand. 
B) an increase in quantity demanded. 
C) a change in consumer income. 
D) an increase in consumers' taste for coffee. 
A) an increase in demand. 
B) an increase in quantity demanded. 
C) a change in consumer income. 
D) an increase in consumers' taste for coffee.

Question 14

Figure 3-5  
-Refer to Figure 3-5.At a price of $5

Accepted Answer

A) there is a surplus of 4 units. 
B) there is a scarcity of 4 units. 
C) there is a shortage of 6 units. 
D) there is a shortage of 4 units. 
A) there is a surplus of 4 units. 
B) there is a scarcity of 4 units. 
C) there is a shortage of 6 units. 
D) there is a shortage of 4 units.

Question 15

Select the phrase that correctly completes the following statement."A decrease in the number of manufacturers caused a decrease in the supply of sailboats.As a result

Accepted Answer

A) the price of sailboats increased and the demand for sailboats decreased." 
B) the equilibrium quantity of sailboats increased." 
C) the price of sailboats increased and the quantity of sailboats demanded decreased." 
D) the price of sailboats increased.The higher price caused the supply of sailboats to increase." 
A) the price of sailboats increased and the demand for sailboats decreased." 
B) the equilibrium quantity of sailboats increased." 
C) the price of sailboats increased and the quantity of sailboats demanded decreased." 
D) the price of sailboats increased.The higher price caused the supply of sailboats to increase."

Question 16

The phrase "demand has increased" means that

Accepted Answer

A) a demand curve has shifted to the left. 
B) there has been an upward movement along a demand curve. 
C) there has been a downward movement along a demand curve. 
D) a demand curve has shifted to the right. 
A) a demand curve has shifted to the left. 
B) there has been an upward movement along a demand curve. 
C) there has been a downward movement along a demand curve. 
D) a demand curve has shifted to the right.

Question 17

Which of the following would cause a decrease in the supply of peanut butter?

Accepted Answer

A) a decrease in the price of jelly (assuming that peanut butter and jelly are complements) 
B) a decrease in the price of peanut butter 
C) an increase the price of peanuts 
D) an increase in the technology used to produce peanut butter 
A) a decrease in the price of jelly (assuming that peanut butter and jelly are complements) 
B) a decrease in the price of peanut butter 
C) an increase the price of peanuts 
D) an increase in the technology used to produce peanut butter

Question 18

The supply curve for umbrellas

Accepted Answer

A) shows the supply of umbrellas consumers are willing and able to buy at any given price. 
B) is downward sloping. 
C) shows the relationship between the quantity of umbrellas firms are willing and able to supply and the quantity of umbrellas consumers are willing and able to purchase. 
D) shows the relationship between the price of umbrellas and the quantity of umbrellas supplied. 
A) shows the supply of umbrellas consumers are willing and able to buy at any given price. 
B) is downward sloping. 
C) shows the relationship between the quantity of umbrellas firms are willing and able to supply and the quantity of umbrellas consumers are willing and able to purchase. 
D) shows the relationship between the price of umbrellas and the quantity of umbrellas supplied.

Question 19

A normal good is a good for which the demanded decreases as income decreases,holding everything else constant.

Accepted Answer

A) True 
 B)False

Question 20

If the price of train tickets decreases,what will be the impact in the market for bus travel?

Accepted Answer

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

If the population increases and input prices increase,the equilibrium price of a product will definitely increase.

A firm has an incentive to decrease supply now and increase supply in the future if it expects that

Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for sushi if the Surgeon General announces that a majority of the raw fish that is imported to make sushi contains high levels of toxic mercury?

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for blu-ray discs.Which panel best describes what happens in this market if there is a substantial increase in the price of blu-ray players?

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for mustard and that bratwurst and mustard are complements.What panel describes what happens in this market when the price of bratwurst falls?

Figure 3-5 -Refer to Figure 3-5.At a price of $0

Table 3-1 -Refer to Table 3-1.The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi)and the rest of the market.At a price of $4,the quantity demanded in the market would be

If consumers believe the price of tablet computers will increase in the future,this will cause the demand for tablet computers to decrease now.

Using Richard Tedlow's "three phases of marketing," the premium bottled water industry is probably in

What are the five most important variables that shift the market supply curve?

Buyers scrambled to secure stocks of Australian wool following a forecast of an 11 percent decline in wool production.What happens in the Australian wool market as a result of this announcement?

If,in response to a decrease in the price of coffee,the quantity of coffee demanded increases,then economists would describe this as

Figure 3-5 -Refer to Figure 3-5.At a price of $5

Select the phrase that correctly completes the following statement."A decrease in the number of manufacturers caused a decrease in the supply of sailboats.As a result

The phrase "demand has increased" means that

Which of the following would cause a decrease in the supply of peanut butter?

The supply curve for umbrellas

A normal good is a good for which the demanded decreases as income decreases,holding everything else constant.

If the price of train tickets decreases,what will be the impact in the market for bus travel?

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

If the population increases and input prices increase,the equilibrium price of a product will definitely increase.

A firm has an incentive to decrease supply now and increase supply in the future if it expects that

Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for sushi if the Surgeon General announces that a majority of the raw fish that is imported to make sushi contains high levels of toxic mercury?

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for blu-ray discs.Which panel best describes what happens in this market if there is a substantial increase in the price of blu-ray players?

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for mustard and that bratwurst and mustard are complements.What panel describes what happens in this market when the price of bratwurst falls?

Figure 3-5 -Refer to Figure 3-5.At a price of $0

Table 3-1 -Refer to Table 3-1.The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi)and the rest of the market.At a price of $4,the quantity demanded in the market would be

If consumers believe the price of tablet computers will increase in the future,this will cause the demand for tablet computers to decrease now.

Using Richard Tedlow's "three phases of marketing," the premium bottled water industry is probably in

What are the five most important variables that shift the market supply curve?

Buyers scrambled to secure stocks of Australian wool following a forecast of an 11 percent decline in wool production.What happens in the Australian wool market as a result of this announcement?

If,in response to a decrease in the price of coffee,the quantity of coffee demanded increases,then economists would describe this as

Figure 3-5 -Refer to Figure 3-5.At a price of $5

Select the phrase that correctly completes the following statement."A decrease in the number of manufacturers caused a decrease in the supply of sailboats.As a result

The phrase "demand has increased" means that

Which of the following would cause a decrease in the supply of peanut butter?

The supply curve for umbrellas

A normal good is a good for which the demanded decreases as income decreases,holding everything else constant.

If the price of train tickets decreases,what will be the impact in the market for bus travel?

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