Question 1

If the price of a movie download falls, the rental rate of DVDs ________ and the equilibrium quantity of DVDs rented ________.

Accepted Answer

A)  rises; decreases 
B)  rises; increases 
C)  falls; decreases 
D)  falls; increases 
A)  rises; decreases 
B)  rises; increases 
C)  falls; decreases 
D)  falls; increases

Question 2

What is the effect on the price and quantity of a product if the demand decreases and the supply simultaneously increases?

Accepted Answer

The equilibrium price unambiguously fall

Question 3

If the price of a hot dog is $2 and the price of a hamburger is $4, then the

Accepted Answer

A)  relative price of a hot dog is 1/2 of a hamburger per hot dog. 
B)  money price of a hot dog is 2 hamburgers per hot dog. 
C)  relative price of a hamburger is 1/2 of a hot dog per hamburger. 
D)  money price of a hamburger is 2 hot dogs per hamburger. 
A)  relative price of a hot dog is 1/2 of a hamburger per hot dog. 
B)  money price of a hot dog is 2 hamburgers per hot dog. 
C)  relative price of a hamburger is 1/2 of a hot dog per hamburger. 
D)  money price of a hamburger is 2 hot dogs per hamburger.

Question 4

A severe drought has damaged this year's lettuce crop. The initial effect on the lettuce market is a

Accepted Answer

A)  decrease in the demand for lettuce. 
B)  decrease in the supply of lettuce. 
C)  decrease in both the demand and supply of lettuce. 
D)  rightward movement along the demand curve for lettuce. 
A)  decrease in the demand for lettuce. 
B)  decrease in the supply of lettuce. 
C)  decrease in both the demand and supply of lettuce. 
D)  rightward movement along the demand curve for lettuce.

Question 5

An increase in the demand for computers and a decrease in the number of sellers of computers will definitely ________.

Accepted Answer

A)  increase the number of computers bought 
B)  increase the price of a computer 
C)  increase the price of a computer and the number of computers bought 
D)  not change the price of a computer and increase the number of computers bought 
A)  increase the number of computers bought 
B)  increase the price of a computer 
C)  increase the price of a computer and the number of computers bought 
D)  not change the price of a computer and increase the number of computers bought

Question 6

Cable television companies must pay increased charges by the networks for the programs the cable companies carry. As a result, the price of cable television rises. Thus

Accepted Answer

A)  the demand curve for cable television service shifts rightward. 
B)  the demand curve for cable television service shifts leftward. 
C)  there is a movement down the demand curve for cable television to a higher quantity demanded. 
D)  there is a movement up the demand curve for cable television to a smaller quantity demanded. 
A)  the demand curve for cable television service shifts rightward. 
B)  the demand curve for cable television service shifts leftward. 
C)  there is a movement down the demand curve for cable television to a higher quantity demanded. 
D)  there is a movement up the demand curve for cable television to a smaller quantity demanded.

Question 7

Homer changes jobs and his new job pays him a higher income. Before he changed jobs, Homer purchased 3 pounds of tuna and 2 pounds of chicken. After he changed jobs, Homer now purchases 2 pounds of tuna and 3 pounds of chicken. For Homer

Accepted Answer

A)  tuna is a normal good and chicken is an inferior good. 
B)  tuna is an inferior good and chicken is a normal good. 
C)  both tuna and chicken are normal goods. 
D)  both tuna and chicken are inferior goods. 
A)  tuna is a normal good and chicken is an inferior good. 
B)  tuna is an inferior good and chicken is a normal good. 
C)  both tuna and chicken are normal goods. 
D)  both tuna and chicken are inferior goods.

Question 8

As the price of a pound of peanuts falls, the

Accepted Answer

A)  demand for peanuts increases. 
B)  demand for peanuts decreases. 
C)  quantity of peanuts demanded increases. 
D)  Both answers A and C are correct. 
A)  demand for peanuts increases. 
B)  demand for peanuts decreases. 
C)  quantity of peanuts demanded increases. 
D)  Both answers A and C are correct.

Question 9

Because of increasing marginal cost, most supply curves

Accepted Answer

A)  are horizontal. 
B)  are vertical. 
C)  have a negative slope. 
D)  have a positive slope. 
A)  are horizontal. 
B)  are vertical. 
C)  have a negative slope. 
D)  have a positive slope.

Question 10

-The above figure shows the market for pizza. Which figure shows the effect of an increase in the price of the tomato sauce used to produce pizza?

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 11

Good A and good B are substitutes in production. The demand for good A decreases, which lowers the price of good A. The decrease in the price of good A

Accepted Answer

A)  decreases the supply of good B. 
B)  increases the supply of good B. 
C)  decreases the demand for good B. 
D)  increases the demand for good B. 
A)  decreases the supply of good B. 
B)  increases the supply of good B. 
C)  decreases the demand for good B. 
D)  increases the demand for good B.

Question 12

-In the above figure, if the price is $8 then there is a

Accepted Answer

A)  surplus of 100. 
B)  surplus of 200. 
C)  shortage of 100. 
D)  shortage of 200. 
A)  surplus of 100. 
B)  surplus of 200. 
C)  shortage of 100. 
D)  shortage of 200.

Question 13

When the price of an inferior good falls, the substitution effect leads to ________ in the quantity purchased and the income effect leads to ________ in the quantity purchased.

Accepted Answer

A)  an increase; an increase 
B)  an increase; a decrease 
C)  a decrease; an increase 
D)  a decrease; a decrease 
A)  an increase; an increase 
B)  an increase; a decrease 
C)  a decrease; an increase 
D)  a decrease; a decrease

Question 14

Suppose the equilibrium price of a gallon of gasoline drops from $3.00 to $2.85 and the equilibrium quantity increases from 365 millions of gallons per week to 372 millions of gallons per week. These changes can be the result of

Accepted Answer

A)  an increase in supply. 
B)  an increase in demand. 
C)  a decrease in supply. 
D)  a decrease in demand. 
A)  an increase in supply. 
B)  an increase in demand. 
C)  a decrease in supply. 
D)  a decrease in demand.

Question 15

If a decrease in the price of gasoline increases the demand for large cars, then

Accepted Answer

A)  gasoline and large cars are substitutes in consumption. 
B)  gasoline and large cars are complements in consumption. 
C)  gasoline is an inferior good. 
D)  large cars are an inferior good. 
A)  gasoline and large cars are substitutes in consumption. 
B)  gasoline and large cars are complements in consumption. 
C)  gasoline is an inferior good. 
D)  large cars are an inferior good.

Question 16

Some sales managers are talking shop. Which of the following quotations refers to a movement along the demand curve?

Accepted Answer

A)  "Since our competitors raised their prices our sales have doubled." 
B)  "It has been an unusually mild winter; our sales of wool scarves are down from last year." 
C)  "We decided to cut our prices, and the increase in our sales has been remarkable." 
D)  none of the above 
A)  "Since our competitors raised their prices our sales have doubled." 
B)  "It has been an unusually mild winter; our sales of wool scarves are down from last year." 
C)  "We decided to cut our prices, and the increase in our sales has been remarkable." 
D)  none of the above

Question 17

If the demand for hamburgers decreases, the equilibrium price

Accepted Answer

A)  rises and the equilibrium quantity increases. 
B)  falls and the equilibrium quantity increases. 
C)  rises and the equilibrium quantity decreases. 
D)  falls and the equilibrium quantity decreases. 
A)  rises and the equilibrium quantity increases. 
B)  falls and the equilibrium quantity increases. 
C)  rises and the equilibrium quantity decreases. 
D)  falls and the equilibrium quantity decreases.

Question 18

An increase in the number of consumers

Accepted Answer

A)  results only in a movement along the demand curve. 
B)  shifts the supply curve leftward. 
C)  shifts the demand curve rightward. 
D)  Both answers B and C are correct. 
A)  results only in a movement along the demand curve. 
B)  shifts the supply curve leftward. 
C)  shifts the demand curve rightward. 
D)  Both answers B and C are correct.

Question 19

When the price is less than the equilibrium price

Accepted Answer

A)  there will be a shortage. 
B)  some consumers will be willing to pay a price higher than the prevailing price. 
C)  the price will be forced higher. 
D)  All of the above answers are correct. 
A)  there will be a shortage. 
B)  some consumers will be willing to pay a price higher than the prevailing price. 
C)  the price will be forced higher. 
D)  All of the above answers are correct.

Question 20

Jeep Cherokees are a normal good. If people's incomes increase, the direct result will be

Accepted Answer

A)  an increase in the supply of the vehicles. 
B)  a decrease in the demand for the vehicles. 
C)  an increase in the demand for the vehicles. 
D)  Both answers A and C are correct. 
A)  an increase in the supply of the vehicles. 
B)  a decrease in the demand for the vehicles. 
C)  an increase in the demand for the vehicles. 
D)  Both answers A and C are correct.

If the price of a movie download falls, the rental rate of DVDs and the equilibrium quantity of DVDs rented .

What is the effect on the price and quantity of a product if the demand decreases and the supply simultaneously increases?

If the price of a hot dog is $2 and the price of a hamburger is $4, then the

A severe drought has damaged this year's lettuce crop. The initial effect on the lettuce market is a

An increase in the demand for computers and a decrease in the number of sellers of computers will definitely ________.

Cable television companies must pay increased charges by the networks for the programs the cable companies carry. As a result, the price of cable television rises. Thus

Homer changes jobs and his new job pays him a higher income. Before he changed jobs, Homer purchased 3 pounds of tuna and 2 pounds of chicken. After he changed jobs, Homer now purchases 2 pounds of tuna and 3 pounds of chicken. For Homer

As the price of a pound of peanuts falls, the

Because of increasing marginal cost, most supply curves

-The above figure shows the market for pizza. Which figure shows the effect of an increase in the price of the tomato sauce used to produce pizza?

Good A and good B are substitutes in production. The demand for good A decreases, which lowers the price of good A. The decrease in the price of good A

-In the above figure, if the price is $8 then there is a

When the price of an inferior good falls, the substitution effect leads to in the quantity purchased and the income effect leads to in the quantity purchased.

Suppose the equilibrium price of a gallon of gasoline drops from $3.00 to $2.85 and the equilibrium quantity increases from 365 millions of gallons per week to 372 millions of gallons per week. These changes can be the result of

If a decrease in the price of gasoline increases the demand for large cars, then

Some sales managers are talking shop. Which of the following quotations refers to a movement along the demand curve?

If the demand for hamburgers decreases, the equilibrium price

An increase in the number of consumers

When the price is less than the equilibrium price

Jeep Cherokees are a normal good. If people's incomes increase, the direct result will be

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

If the price of a movie download falls, the rental rate of DVDs ________ and the equilibrium quantity of DVDs rented ________.

What is the effect on the price and quantity of a product if the demand decreases and the supply simultaneously increases?

If the price of a hot dog is $2 and the price of a hamburger is $4, then the

A severe drought has damaged this year's lettuce crop. The initial effect on the lettuce market is a

An increase in the demand for computers and a decrease in the number of sellers of computers will definitely ________.

Cable television companies must pay increased charges by the networks for the programs the cable companies carry. As a result, the price of cable television rises. Thus

Homer changes jobs and his new job pays him a higher income. Before he changed jobs, Homer purchased 3 pounds of tuna and 2 pounds of chicken. After he changed jobs, Homer now purchases 2 pounds of tuna and 3 pounds of chicken. For Homer

As the price of a pound of peanuts falls, the

Because of increasing marginal cost, most supply curves

-The above figure shows the market for pizza. Which figure shows the effect of an increase in the price of the tomato sauce used to produce pizza?

Good A and good B are substitutes in production. The demand for good A decreases, which lowers the price of good A. The decrease in the price of good A

-In the above figure, if the price is $8 then there is a

When the price of an inferior good falls, the substitution effect leads to ________ in the quantity purchased and the income effect leads to ________ in the quantity purchased.

Suppose the equilibrium price of a gallon of gasoline drops from $3.00 to $2.85 and the equilibrium quantity increases from 365 millions of gallons per week to 372 millions of gallons per week. These changes can be the result of

If a decrease in the price of gasoline increases the demand for large cars, then

Some sales managers are talking shop. Which of the following quotations refers to a movement along the demand curve?

If the demand for hamburgers decreases, the equilibrium price

An increase in the number of consumers

When the price is less than the equilibrium price

Jeep Cherokees are a normal good. If people's incomes increase, the direct result will be

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 the price of a movie download falls, the rental rate of DVDs and the equilibrium quantity of DVDs rented .

When the price of an inferior good falls, the substitution effect leads to in the quantity purchased and the income effect leads to in the quantity purchased.