Question 1

What leads to a decrease in the quantity demanded of a good or service?

Accepted Answer

The quantity demande

Question 2

Which of the following is consistent with the law of demand?

Accepted Answer

A)  An increase in the price of a DVD causes an increase in the quantity of DVDs demanded. 
B)  An increase in the price of a soda causes a decrease in the quantity of soda demanded. 
C)  A decrease in the price of a gallon of milk causes a decrease in the quantity of milk demanded. 
D)  A decrease in the price of juice causes no change in the quantity of juice demanded. 
A)  An increase in the price of a DVD causes an increase in the quantity of DVDs demanded. 
B)  An increase in the price of a soda causes a decrease in the quantity of soda demanded. 
C)  A decrease in the price of a gallon of milk causes a decrease in the quantity of milk demanded. 
D)  A decrease in the price of juice causes no change in the quantity of juice demanded.

Question 3

If more people buy hybrid cars that have high gas mileage, the equilibrium price of gasoline will ________ and the equilibrium quantity will ________.

Accepted Answer

A)  rise; increase 
B)  rise; decrease 
C)  fall; increase 
D)  fall; decrease 
A)  rise; increase 
B)  rise; decrease 
C)  fall; increase 
D)  fall; decrease

Question 4

"The recent hurricanes in Florida are bringing financial gain to California citrus growers. Due to extensive damage to the Florida citrus crop, California citrus products are commanding their highest prices ever." Which of the following statements best explains the economics of this quotation?

Accepted Answer

A)  The supply of Florida oranges decreased, causing their price to increase, which then increased the demand for substitute California oranges. 
B)  The supply of Florida oranges decreased, causing the supply of California oranges to increase and the price of California oranges to rise. 
C)  The demand for Florida oranges decreased because of the hurricanes, causing a greater demand for California oranges and an increase in the price of California oranges. 
D)  The demand for Florida oranges decreased, causing their prices to rise, therefore increasing the demand for California oranges. 
A)  The supply of Florida oranges decreased, causing their price to increase, which then increased the demand for substitute California oranges. 
B)  The supply of Florida oranges decreased, causing the supply of California oranges to increase and the price of California oranges to rise. 
C)  The demand for Florida oranges decreased because of the hurricanes, causing a greater demand for California oranges and an increase in the price of California oranges. 
D)  The demand for Florida oranges decreased, causing their prices to rise, therefore increasing the demand for California oranges.

Question 5

Suppose people buy more of good 1 when the price of good 2 falls. These goods are

Accepted Answer

A)  complements. 
B)  substitutes. 
C)  normal. 
D)  inferior. 
A)  complements. 
B)  substitutes. 
C)  normal. 
D)  inferior.

Question 6

Which of the following decreases the demand for an inferior good?

Accepted Answer

A)  an increase in income 
B)  a decrease in the price of a complement 
C)  a decrease in income 
D)  an increase in the price of a substitute 
A)  an increase in income 
B)  a decrease in the price of a complement 
C)  a decrease in income 
D)  an increase in the price of a substitute

Question 7

What is the difference between a normal good and an inferior good? Give an example of each.

Accepted Answer

A good is a normal good if an increase i

Question 8

-The diagram above illustrates the market for apartments in Victoria, British Columbia.
a)If the current rent is $300 per month, is there a shortage or surplus in the apartment market and how much is the shortage or surplus?
b)What is the equilibrium rent and quantity of apartments?

Accepted Answer

a)If the rent is $300 per mont

Question 9

Which of the following is TRUE?

Accepted Answer

A)  For an inferior good, when income increases, the demand curve shifts leftward. 
B)  The demand curve for a good shifts leftward when the price of a substitute rises. 
C)  If consumers expect the price of a good will rise in the future, the demand curve shifts leftward. 
D)  An increase in population shifts the demand curve for most goods leftward. 
A)  For an inferior good, when income increases, the demand curve shifts leftward. 
B)  The demand curve for a good shifts leftward when the price of a substitute rises. 
C)  If consumers expect the price of a good will rise in the future, the demand curve shifts leftward. 
D)  An increase in population shifts the demand curve for most goods leftward.

Question 10

-How does an unusually warm winter affect the equilibrium price and quantity of gloves?

Accepted Answer

A)  It raises both the price and the quantity. 
B)  It raises the price and decreases the quantity. 
C)  It lowers the price and increases the quantity. 
D)  It lowers both the price and the quantity. 
A)  It raises both the price and the quantity. 
B)  It raises the price and decreases the quantity. 
C)  It lowers the price and increases the quantity. 
D)  It lowers both the price and the quantity.

Question 11

The "law of demand" states that, other thing remaining the same, the higher

Accepted Answer

A)  the price of a good, the lower is the demand for this good. 
B)  consumers' incomes, the greater is the demand. 
C)  the price of a good, the higher is the quantity demanded. 
D)  the price of a good, the smaller is the quantity demanded. 
A)  the price of a good, the lower is the demand for this good. 
B)  consumers' incomes, the greater is the demand. 
C)  the price of a good, the higher is the quantity demanded. 
D)  the price of a good, the smaller is the quantity demanded.

Question 12

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in income if fruit snacks are a normal good?

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 13

-The above figures show the market for hamburger meat. Which figure(s)shows the effect of an increase in the price of a hamburger bun, a complement for hamburger meat?

Accepted Answer

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

Question 14

-The figure above shows the demand for fruit snacks. Which movement reflects how consumers would react to an increase in the price of a fruit snack that is expected to occur in the future?

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 15

Apples are a normal good, so if the price of an apple increases from 50¢ to 60¢, the quantity of apples demanded decrease because of

Accepted Answer

A)  the substitution effect only. 
B)  the income effect only. 
C)  a change in income. 
D)  the substitution and income effects. 
A)  the substitution effect only. 
B)  the income effect only. 
C)  a change in income. 
D)  the substitution and income effects.

Question 16

-At a price of $10 in the above figure, there is

Accepted Answer

A)  a surplus of 200 units. 
B)  a shortage of 200 units. 
C)  a surplus of 400 units. 
D)  a shortage of 400 units. 
A)  a surplus of 200 units. 
B)  a shortage of 200 units. 
C)  a surplus of 400 units. 
D)  a shortage of 400 units.

Question 17

If the U.S. Surgeon General announced that increased grapefruit juice consumption could help prevent heart attacks, what would happen to the equilibrium price and quantity of grapefruit juice?

Accepted Answer

A)  Price and quantity both increase. 
B)  Price and quantity both decrease. 
C)  Price increases but quantity decreases. 
D)  Price decreases but quantity increases. 
A)  Price and quantity both increase. 
B)  Price and quantity both decrease. 
C)  Price increases but quantity decreases. 
D)  Price decreases but quantity increases.

Question 18

You can buy a season ticket to the Metropolitan Opera for $800. A season ticket plan to see the New York Knicks is $1600. Which of the following is a CORRECT statement?

Accepted Answer

A)  The money price of opera tickets is 1/2 of a Knicks ticket per opera ticket. 
B)  The opportunity cost of a Knicks ticket is 2 opera tickets per Knicks ticket. 
C)  The relative price of an opera ticket is $800. 
D)  the money price of a Knicks ticket is 2 opera tickets per Knicks ticket. 
A)  The money price of opera tickets is 1/2 of a Knicks ticket per opera ticket. 
B)  The opportunity cost of a Knicks ticket is 2 opera tickets per Knicks ticket. 
C)  The relative price of an opera ticket is $800. 
D)  the money price of a Knicks ticket is 2 opera tickets per Knicks ticket.

Question 19

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

Accepted Answer

A)  an increase 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)  an increase 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 20

Demands differ from wants because

Accepted Answer

A)  demands are unlimited, whereas wants are limited by income. 
B)  wants require a plan to acquire a good but demands require no such plan. 
C)  wants imply a decision about which demands to satisfy, while demands involve no specific plan to acquire the good. 
D)  demands reflect a decision about which wants to satisfy and a plan to buy the good, while wants are unlimited and involve no specific plan to acquire the good. 
A)  demands are unlimited, whereas wants are limited by income. 
B)  wants require a plan to acquire a good but demands require no such plan. 
C)  wants imply a decision about which demands to satisfy, while demands involve no specific plan to acquire the good. 
D)  demands reflect a decision about which wants to satisfy and a plan to buy the good, while wants are unlimited and involve no specific plan to acquire the good.

What leads to a decrease in the quantity demanded of a good or service?

Which of the following is consistent with the law of demand?

If more people buy hybrid cars that have high gas mileage, the equilibrium price of gasoline will and the equilibrium quantity will .

"The recent hurricanes in Florida are bringing financial gain to California citrus growers. Due to extensive damage to the Florida citrus crop, California citrus products are commanding their highest prices ever." Which of the following statements best explains the economics of this quotation?

Suppose people buy more of good 1 when the price of good 2 falls. These goods are

Which of the following decreases the demand for an inferior good?

What is the difference between a normal good and an inferior good? Give an example of each.

-The diagram above illustrates the market for apartments in Victoria, British Columbia. a)If the current rent is $300 per month, is there a shortage or surplus in the apartment market and how much is the shortage or surplus? b)What is the equilibrium rent and quantity of apartments?

Which of the following is TRUE?

-How does an unusually warm winter affect the equilibrium price and quantity of gloves?

The "law of demand" states that, other thing remaining the same, the higher

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in income if fruit snacks are a normal good?

-The above figures show the market for hamburger meat. Which figure(s)shows the effect of an increase in the price of a hamburger bun, a complement for hamburger meat?

-The figure above shows the demand for fruit snacks. Which movement reflects how consumers would react to an increase in the price of a fruit snack that is expected to occur in the future?

Apples are a normal good, so if the price of an apple increases from 50¢ to 60¢, the quantity of apples demanded decrease because of

-At a price of $10 in the above figure, there is

If the U.S. Surgeon General announced that increased grapefruit juice consumption could help prevent heart attacks, what would happen to the equilibrium price and quantity of grapefruit juice?

You can buy a season ticket to the Metropolitan Opera for $800. A season ticket plan to see the New York Knicks is $1600. Which of the following is a CORRECT statement?

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

Demands differ from wants because

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

What leads to a decrease in the quantity demanded of a good or service?

Which of the following is consistent with the law of demand?

If more people buy hybrid cars that have high gas mileage, the equilibrium price of gasoline will ________ and the equilibrium quantity will ________.

"The recent hurricanes in Florida are bringing financial gain to California citrus growers. Due to extensive damage to the Florida citrus crop, California citrus products are commanding their highest prices ever." Which of the following statements best explains the economics of this quotation?

Suppose people buy more of good 1 when the price of good 2 falls. These goods are

Which of the following decreases the demand for an inferior good?

What is the difference between a normal good and an inferior good? Give an example of each.

-The diagram above illustrates the market for apartments in Victoria, British Columbia. a)If the current rent is $300 per month, is there a shortage or surplus in the apartment market and how much is the shortage or surplus? b)What is the equilibrium rent and quantity of apartments?

Which of the following is TRUE?

-How does an unusually warm winter affect the equilibrium price and quantity of gloves?

The "law of demand" states that, other thing remaining the same, the higher

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in income if fruit snacks are a normal good?

-The above figures show the market for hamburger meat. Which figure(s)shows the effect of an increase in the price of a hamburger bun, a complement for hamburger meat?

-The figure above shows the demand for fruit snacks. Which movement reflects how consumers would react to an increase in the price of a fruit snack that is expected to occur in the future?

Apples are a normal good, so if the price of an apple increases from 50¢ to 60¢, the quantity of apples demanded decrease because of

-At a price of $10 in the above figure, there is

If the U.S. Surgeon General announced that increased grapefruit juice consumption could help prevent heart attacks, what would happen to the equilibrium price and quantity of grapefruit juice?

You can buy a season ticket to the Metropolitan Opera for $800. A season ticket plan to see the New York Knicks is $1600. Which of the following is a CORRECT statement?

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

Demands differ from wants because

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

If more people buy hybrid cars that have high gas mileage, the equilibrium price of gasoline will and the equilibrium quantity will .