Question 1

A decrease in the price of bowling shifts the

Accepted Answer

A)  demand curve for bowling balls leftward. 
B)  demand curve for bowling balls rightward. 
C)  supply curve of bowling balls leftward. 
D)  supply curve of bowling balls rightward. 
A)  demand curve for bowling balls leftward. 
B)  demand curve for bowling balls rightward. 
C)  supply curve of bowling balls leftward. 
D)  supply curve of bowling balls rightward.

Question 2

Producers of DVDs are able to lower the wage rate that they pay to their workers. You predict that the

Accepted Answer

A)  price will rise. 
B)  quantity supplied will decrease. 
C)  supply curve will shift leftward. 
D)  supply curve will shift rightward. 
A)  price will rise. 
B)  quantity supplied will decrease. 
C)  supply curve will shift leftward. 
D)  supply curve will shift rightward.

Question 3

The opportunity cost of good A in terms of good B is equal to the

Accepted Answer

A)  money price of good A minus the money price of good B. 
B)  money price of good B minus the money price of good A. 
C)  ratio of the money price of good A to the money price of good B. 
D)  ratio of the money price of good B to the money price of good A. 
A)  money price of good A minus the money price of good B. 
B)  money price of good B minus the money price of good A. 
C)  ratio of the money price of good A to the money price of good B. 
D)  ratio of the money price of good B to the money price of good A.

Question 4

What is the difference between a money price and a relative price? When the demand and supply model predicts that the price of coffee will rise, is the model predicting that the money price rises or the relative price rises?

Accepted Answer

The money price of a good is the number

Question 5

A normal 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

Which of the following raises the equilibrium price and increases the equilibrium quantity of used cars?

Accepted Answer

A)  a fall in income if used cars are an inferior good 
B)  an increase in the wage rate paid to used car salespeople 
C)  neither of the above because the question suggests a violation of the "law of demand" 
D)  neither of the above because the question suggests a violation of the "law of supply" 
A)  a fall in income if used cars are an inferior good 
B)  an increase in the wage rate paid to used car salespeople 
C)  neither of the above because the question suggests a violation of the "law of demand" 
D)  neither of the above because the question suggests a violation of the "law of supply"

Question 7

In 2014, the price of peanuts was rising, which led peanut butter sellers and peanut butter buyers to expect the price of peanut butter would rise in the future. In the current market for peanut butter, the price rises and the quantity increases. This set of results means that

Accepted Answer

A)  demand increased by more than supply decreased. 
B)  supply decreased by more than demand increased. 
C)  demand increased by more than supply increased. 
D)  supply decreased by more than demand decreased. 
A)  demand increased by more than supply decreased. 
B)  supply decreased by more than demand increased. 
C)  demand increased by more than supply increased. 
D)  supply decreased by more than demand decreased.

Question 8

-Based on the above figure, which of the following is TRUE?

Accepted Answer

A)  At a price of $6, quantity demanded is equal to quantity supplied. 
B)  At a price of $4, quantity demanded is greater than quantity supplied. 
C)  At a price of $8, quantity demanded is less than quantity supplied. 
D)  All of the above answers are correct. 
A)  At a price of $6, quantity demanded is equal to quantity supplied. 
B)  At a price of $4, quantity demanded is greater than quantity supplied. 
C)  At a price of $8, quantity demanded is less than quantity supplied. 
D)  All of the above answers are correct.

Question 9

Which of the following statements is CORRECT?

Accepted Answer

A)  When both demand and supply increase, the quantity decreases and the price might rise, fall, or remain the same. 
B)  When both demand and supply increase, the price rises and the quantity might increase, decrease, or remain the same. 
C)  When both demand and supply decrease, the quantity increases and the price might rise, fall, or remain the same. 
D)  When both demand and supply decrease, the quantity decreases and the price might rise, fall, or remain the same. 
A)  When both demand and supply increase, the quantity decreases and the price might rise, fall, or remain the same. 
B)  When both demand and supply increase, the price rises and the quantity might increase, decrease, or remain the same. 
C)  When both demand and supply decrease, the quantity increases and the price might rise, fall, or remain the same. 
D)  When both demand and supply decrease, the quantity decreases and the price might rise, fall, or remain the same.

Question 10

-In the figure, the equilibrium price is initially $3 per bushel of wheat. If suppliers come to expect that the price of a bushel of wheat will rise in the future, but buyers do not, the current equilibrium price will

Accepted Answer

A)  rise. 
B)  not change. 
C)  fall. 
D)  Perhaps rise, fall, or stay the same, depending on whether there are more demanders or suppliers in the market. 
A)  rise. 
B)  not change. 
C)  fall. 
D)  Perhaps rise, fall, or stay the same, depending on whether there are more demanders or suppliers in the market.

Question 11

A fall in the price of a good causes producers to reduce the quantity of the good they are willing to produce. This fact illustrates

Accepted Answer

A)  the law of supply. 
B)  the law of demand. 
C)  a change in supply. 
D)  the nature of an inferior good. 
A)  the law of supply. 
B)  the law of demand. 
C)  a change in supply. 
D)  the nature of an inferior good.

Question 12

-In the above figure, if D? is the original demand curve for a normal good and income decreases, which price and quantity might result?

Accepted Answer

A)  point a, with price P? and quantity Q? 
B)  point b, with price P? and quantity Q? 
C)  point c, with price P? and quantity Q? 
D)  point d, with price P? and quantity Q? 
A)  point a, with price P? and quantity Q? 
B)  point b, with price P? and quantity Q? 
C)  point c, with price P? and quantity Q? 
D)  point d, with price P? and quantity Q?

Question 13

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in the price of a substitute for fruit snacks?

Accepted Answer

A)  from point a to point e 
B)  from point a to point b 
C)  from point a to point c 
D)  from point a to point d 
A)  from point a to point e 
B)  from point a to point b 
C)  from point a to point c 
D)  from point a to point d

Question 14

-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 15

-The above figure shows the market for hamburger. Which panel shows the effect of a drought in "cattle country"?

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 16

Suppose that the number of companies selling computer software decreases. How does this change affect the supply of computer software and the supply curve of computer software?

Accepted Answer

A decrease in the number of sellers decr

Question 17

The price of a DVD rental is $1.50 and the price of a downloaded movie is $1.00. If the price of a DVD rental increases by $0.50, the relative price a downloaded movie

Accepted Answer

A)  rises. 
B)  falls. 
C)  does not change. 
D)  might change but more information is needed. 
A)  rises. 
B)  falls. 
C)  does not change. 
D)  might change but more information is needed.

Question 18

If the price of lumber rises, then, in the market for sawdust

Accepted Answer

A)  the supply curve of sawdust shifts leftward. 
B)  the supply curve of sawdust shifts rightward. 
C)  there is a movement downward along the supply curve for sawdust. 
D)  there is a movement upward along the supply curve for sawdust. 
A)  the supply curve of sawdust shifts leftward. 
B)  the supply curve of sawdust shifts rightward. 
C)  there is a movement downward along the supply curve for sawdust. 
D)  there is a movement upward along the supply curve for sawdust.

Question 19

When the price of a good falls, the income effect for a normal good implies that people buy

Accepted Answer

A)  less of that good because the relative price of the good has fallen. 
B)  more of that good because the relative price of the good has risen. 
C)  less of that good because they cannot afford to buy all the things they previously bought. 
D)  more of that good because they can afford to buy more of all the things they previously bought. 
A)  less of that good because the relative price of the good has fallen. 
B)  more of that good because the relative price of the good has risen. 
C)  less of that good because they cannot afford to buy all the things they previously bought. 
D)  more of that good because they can afford to buy more of all the things they previously bought.

Question 20

-The above figures show the market for oranges. Which figure(s)shows the effect of existing orange growers increasing the size of their orange groves?

Accepted Answer

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

A decrease in the price of bowling shifts the

Producers of DVDs are able to lower the wage rate that they pay to their workers. You predict that the

The opportunity cost of good A in terms of good B is equal to the

What is the difference between a money price and a relative price? When the demand and supply model predicts that the price of coffee will rise, is the model predicting that the money price rises or the relative price rises?

A normal good is a good for which demand

Which of the following raises the equilibrium price and increases the equilibrium quantity of used cars?

In 2014, the price of peanuts was rising, which led peanut butter sellers and peanut butter buyers to expect the price of peanut butter would rise in the future. In the current market for peanut butter, the price rises and the quantity increases. This set of results means that

-Based on the above figure, which of the following is TRUE?

Which of the following statements is CORRECT?

-In the figure, the equilibrium price is initially $3 per bushel of wheat. If suppliers come to expect that the price of a bushel of wheat will rise in the future, but buyers do not, the current equilibrium price will

A fall in the price of a good causes producers to reduce the quantity of the good they are willing to produce. This fact illustrates

-In the above figure, if D? is the original demand curve for a normal good and income decreases, which price and quantity might result?

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in the price of a substitute for fruit snacks?

-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 above figure shows the market for hamburger. Which panel shows the effect of a drought in "cattle country"?

Suppose that the number of companies selling computer software decreases. How does this change affect the supply of computer software and the supply curve of computer software?

The price of a DVD rental is $1.50 and the price of a downloaded movie is $1.00. If the price of a DVD rental increases by $0.50, the relative price a downloaded movie

If the price of lumber rises, then, in the market for sawdust

When the price of a good falls, the income effect for a normal good implies that people buy

-The above figures show the market for oranges. Which figure(s)shows the effect of existing orange growers increasing the size of their orange groves?

What Is Economics?

The Economic Problem

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 3: Demand and Supply

A decrease in the price of bowling shifts the

Producers of DVDs are able to lower the wage rate that they pay to their workers. You predict that the

The opportunity cost of good A in terms of good B is equal to the

What is the difference between a money price and a relative price? When the demand and supply model predicts that the price of coffee will rise, is the model predicting that the money price rises or the relative price rises?

A normal good is a good for which demand

Which of the following raises the equilibrium price and increases the equilibrium quantity of used cars?

In 2014, the price of peanuts was rising, which led peanut butter sellers and peanut butter buyers to expect the price of peanut butter would rise in the future. In the current market for peanut butter, the price rises and the quantity increases. This set of results means that

-Based on the above figure, which of the following is TRUE?

Which of the following statements is CORRECT?

-In the figure, the equilibrium price is initially $3 per bushel of wheat. If suppliers come to expect that the price of a bushel of wheat will rise in the future, but buyers do not, the current equilibrium price will

A fall in the price of a good causes producers to reduce the quantity of the good they are willing to produce. This fact illustrates

-In the above figure, if D? is the original demand curve for a normal good and income decreases, which price and quantity might result?

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in the price of a substitute for fruit snacks?

-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 above figure shows the market for hamburger. Which panel shows the effect of a drought in "cattle country"?

Suppose that the number of companies selling computer software decreases. How does this change affect the supply of computer software and the supply curve of computer software?

The price of a DVD rental is $1.50 and the price of a downloaded movie is $1.00. If the price of a DVD rental increases by $0.50, the relative price a downloaded movie

If the price of lumber rises, then, in the market for sawdust

When the price of a good falls, the income effect for a normal good implies that people buy

-The above figures show the market for oranges. Which figure(s)shows the effect of existing orange growers increasing the size of their orange groves?

What Is Economics?

The Economic Problem

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters