Question 1

An increase in the price of the product causes an increase in the quantity of a product supplied.

Accepted Answer

A) True 
 B)False

Question 2

Figure 3.8  
-Refer to Figure 3.8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D1 and S1 (point A). If the price of oranges, a substitute for apples, decreases and the wages of apple workers increase, how will the equilibrium point change?

Accepted Answer

A) The equilibrium point will move from A to E. 
B) The equilibrium point will move from A to B. 
C) The equilibrium point will move from A to C. 
D) The equilibrium will first move from A to B, then return to A. 
A) The equilibrium point will move from A to E. 
B) The equilibrium point will move from A to B. 
C) The equilibrium point will move from A to C. 
D) The equilibrium will first move from A to B, then return to A.

Question 3

If in the market for apples, the supply curve has shifted to the left________.

Accepted Answer

A) the supply of apples has increased. 
B) the supply of apples has decreased. 
C) the quantity of apples supplied has increased. 
D) the quantity of apples supplied has decreased. 
A) the supply of apples has increased. 
B) the supply of apples has decreased. 
C) the quantity of apples supplied has increased. 
D) the quantity of apples supplied has decreased.

Question 4

Figure 3.6  
-Refer to Figure 3.6.The figure above represents the market for canvas tote bags.Assume that the market price is $35.Which of the following statements is true?

Accepted Answer

A) There is a surplus that will cause the price to decrease; quantity demanded will then increase and quantity supplied will decrease until the price equals $25. 
B) There is a surplus that will cause the price to decrease; quantity supplied will then increase and quantity demanded will decrease until the price equals $25. 
C) There will be a surplus that will cause the price to decrease; demand will then increase and supply will decrease until the price equals $25. 
D) There is a surplus that will cause the price to increase; quantity demanded will then decrease and quantity supplied will increase until the price equals $25. 
A) There is a surplus that will cause the price to decrease; quantity demanded will then increase and quantity supplied will decrease until the price equals $25. 
B) There is a surplus that will cause the price to decrease; quantity supplied will then increase and quantity demanded will decrease until the price equals $25. 
C) There will be a surplus that will cause the price to decrease; demand will then increase and supply will decrease until the price equals $25. 
D) There is a surplus that will cause the price to increase; quantity demanded will then decrease and quantity supplied will increase until the price equals $25.

Question 5

Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall.Holding everything else constant, how would this affect the market for Blu-ray players (a complement to LCD televisions)?

Accepted Answer

A) The supply of Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease. 
B) The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would increase. 
C) The demand for Blu-ray players would decrease because consumers could afford to buy fewer LCD televisions and Blu-ray players. 
D) The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease. 
A) The supply of Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease. 
B) The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would increase. 
C) The demand for Blu-ray players would decrease because consumers could afford to buy fewer LCD televisions and Blu-ray players. 
D) The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease.

Question 6

By drawing a demand curve with ________ on the vertical axis and ________ on the horizontal axis, economists assume that the most important determinant of the demand for a good is the ________ of the good.

Accepted Answer

A) quantity; price; quantity 
B) price; quantity; quantity 
C) price; quantity; price 
D) quantity; price; price 
A) quantity; price; quantity 
B) price; quantity; quantity 
C) price; quantity; price 
D) quantity; price; price

Question 7

If the demand for a product increases and the supply of the product does not change, equilibrium price and equilibrium quantity will both increase.

Accepted Answer

A) True 
 B)False

Question 8

Draw a supply and demand graph showing an equilibrium price of $50 and an equilibrium quantity of 200 units.Explain what would happen if the selling price was $75, and illustrate this on the graph.Explain what would happen if the selling price was $25, and illustrate this on the graph.Be sure to label each axis and curve on the graph.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of Draw a supply and demand graph showing...

Question 9

The ________ effect refers to the change in quantity demanded for a good that results from the effect of a change in the good's price on consumers' purchasing power.

Accepted Answer

A) ceteris paribus 
B) population 
C) substitution 
D) income 
A) ceteris paribus 
B) population 
C) substitution 
D) income

Question 10

A(n)________ is represented by a leftward shift of the demand curve while a(n)________ is represented by a movement along a given demand curve.

Accepted Answer

A) decrease in demand; increase in demand 
B) decrease in demand; increase in quantity demanded 
C) increase in demand; decrease in quantity demanded 
D) decrease in quantity demanded; decrease in demand 
A) decrease in demand; increase in demand 
B) decrease in demand; increase in quantity demanded 
C) increase in demand; decrease in quantity demanded 
D) decrease in quantity demanded; decrease in demand

Question 11

How does the decreasing use of traditional cameras affect the market for traditional camera film?

Accepted Answer

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

Question 12

Assume that the price for air conditioner maintenance services has risen and sales of these services have fallen.One can conclude that________.

Accepted Answer

A) the law of supply has been violated. 
B) the demand for air conditioner maintenance services has increased. 
C) the supply of air conditioner maintenance services has decreased. 
D) air conditioner maintenance services are becoming more technologically advanced. 
A) the law of supply has been violated. 
B) the demand for air conditioner maintenance services has increased. 
C) the supply of air conditioner maintenance services has decreased. 
D) air conditioner maintenance services are becoming more technologically advanced.

Question 13

Figure 3.1  
-Refer to Figure 3.1.If the product represented is an inferior good, an increase 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 14

A change in the quantity of a good supplied occurs when________.

Accepted Answer

A) supplier expectations about future prices change. 
B) the price of the good changes. 
C) the cost of producing the good changes. 
D) prices of substitutes in production change. 
A) supplier expectations about future prices change. 
B) the price of the good changes. 
C) the cost of producing the good changes. 
D) prices of substitutes in production change.

Question 15

Figure 3.1  
-Refer to Figure 3.1.A decrease in taste or preference 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 16

A decrease in quantity demanded is represented by a leftward shift of the supply curve.

Accepted Answer

A) True 
 B)False

Question 17

Assume there is a shortage in the market for digital music players.Which of the following statements correctly describes this situation?

Accepted Answer

A) The demand for digital music players is greater than the supply of digital music players. 
B) Some consumers will be unable to obtain digital music players at the market price and will have an incentive to offer to buy the product at a higher price. 
C) The price of digital music players will rise in response to the shortage; as the price rises, the quantity demanded will increase and the quantity supplied will decrease. 
D) The shortage will cause an increase in the equilibrium price of digital music players. 
A) The demand for digital music players is greater than the supply of digital music players. 
B) Some consumers will be unable to obtain digital music players at the market price and will have an incentive to offer to buy the product at a higher price. 
C) The price of digital music players will rise in response to the shortage; as the price rises, the quantity demanded will increase and the quantity supplied will decrease. 
D) The shortage will cause an increase in the equilibrium price of digital music players.

Question 18

All else equal, as the price of a product falls, the quantity supplied increases.

Accepted Answer

A) True 
 B)False

Question 19

If the number of firms producing mouthwash increases and consumer preference for mouthwash increases, the equilibrium price of mouthwash will definitely increase.

Accepted Answer

A) True 
 B)False

Question 20

Figure 3.8  
-Refer to Figure 3.8.The graph in this figure illustrates an initial competitive equilibrium in the market for sugar at the intersection of D1 and S2 (point B). If there is a decrease in the price of fertilizer used on sugar cane and there is a decrease in tastes for sugar-sweetened soft drinks, how will the equilibrium point change?

Accepted Answer

A) The equilibrium point will move from B to A. 
B) The equilibrium point will move from B to C. 
C) There will be no change in the equilibrium point. 
D) The equilibrium point will move from B to E. 
A) The equilibrium point will move from B to A. 
B) The equilibrium point will move from B to C. 
C) There will be no change in the equilibrium point. 
D) The equilibrium point will move from B to E.

An increase in the price of the product causes an increase in the quantity of a product supplied.

If in the market for apples, the supply curve has shifted to the left________.

Figure 3.6 -Refer to Figure 3.6.The figure above represents the market for canvas tote bags.Assume that the market price is $35.Which of the following statements is true?

Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall.Holding everything else constant, how would this affect the market for Blu-ray players (a complement to LCD televisions)?

By drawing a demand curve with on the vertical axis and on the horizontal axis, economists assume that the most important determinant of the demand for a good is the of the good.

If the demand for a product increases and the supply of the product does not change, equilibrium price and equilibrium quantity will both increase.

The ________ effect refers to the change in quantity demanded for a good that results from the effect of a change in the good's price on consumers' purchasing power.

A(n) is represented by a leftward shift of the demand curve while a(n) is represented by a movement along a given demand curve.

How does the decreasing use of traditional cameras affect the market for traditional camera film?

Assume that the price for air conditioner maintenance services has risen and sales of these services have fallen.One can conclude that________.

Figure 3.1 -Refer to Figure 3.1.If the product represented is an inferior good, an increase in income would be represented by a movement from:

A change in the quantity of a good supplied occurs when________.

Figure 3.1 -Refer to Figure 3.1.A decrease in taste or preference would be represented by a movement from:

A decrease in quantity demanded is represented by a leftward shift of the supply curve.

Assume there is a shortage in the market for digital music players.Which of the following statements correctly describes this situation?

All else equal, as the price of a product falls, the quantity supplied increases.

If the number of firms producing mouthwash increases and consumer preference for mouthwash increases, the equilibrium price of mouthwash will definitely increase.

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency, Government Price Setting and Taxes

Consumer Choice and Behavioural Economics

Technology Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition: The Competitive Model in a More Realistic

Oligopoly: Markets With Few Competitors

The Markets for Labour and Other Factors of Production

Comparative Advantage and the Gains From International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

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

An increase in the price of the product causes an increase in the quantity of a product supplied.

If in the market for apples, the supply curve has shifted to the left________.

Figure 3.6 -Refer to Figure 3.6.The figure above represents the market for canvas tote bags.Assume that the market price is $35.Which of the following statements is true?

Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall.Holding everything else constant, how would this affect the market for Blu-ray players (a complement to LCD televisions)?

By drawing a demand curve with ________ on the vertical axis and ________ on the horizontal axis, economists assume that the most important determinant of the demand for a good is the ________ of the good.

If the demand for a product increases and the supply of the product does not change, equilibrium price and equilibrium quantity will both increase.

The ________ effect refers to the change in quantity demanded for a good that results from the effect of a change in the good's price on consumers' purchasing power.

A(n)________ is represented by a leftward shift of the demand curve while a(n)________ is represented by a movement along a given demand curve.

How does the decreasing use of traditional cameras affect the market for traditional camera film?

Assume that the price for air conditioner maintenance services has risen and sales of these services have fallen.One can conclude that________.

Figure 3.1 -Refer to Figure 3.1.If the product represented is an inferior good, an increase in income would be represented by a movement from:

A change in the quantity of a good supplied occurs when________.

Figure 3.1 -Refer to Figure 3.1.A decrease in taste or preference would be represented by a movement from:

A decrease in quantity demanded is represented by a leftward shift of the supply curve.

Assume there is a shortage in the market for digital music players.Which of the following statements correctly describes this situation?

All else equal, as the price of a product falls, the quantity supplied increases.

If the number of firms producing mouthwash increases and consumer preference for mouthwash increases, the equilibrium price of mouthwash will definitely increase.

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency, Government Price Setting and Taxes

Consumer Choice and Behavioural Economics

Technology Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition: The Competitive Model in a More Realistic

Oligopoly: Markets With Few Competitors

The Markets for Labour and Other Factors of Production

Comparative Advantage and the Gains From International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

By drawing a demand curve with on the vertical axis and on the horizontal axis, economists assume that the most important determinant of the demand for a good is the of the good.

A(n) is represented by a leftward shift of the demand curve while a(n) is represented by a movement along a given demand curve.