Question 1

In the market for bananas, the price is $2.00 a bunch. An increase in the supply of bananas decreases the price of bananas and ________.

Accepted Answer

A)  the quantity supplied increases because the price falls 
B)  increases the demand for bananas 
C)  increases the quantity of bananas demanded 
D)  creates a shortage of bananas 
A)  the quantity supplied increases because the price falls 
B)  increases the demand for bananas 
C)  increases the quantity of bananas demanded 
D)  creates a shortage of bananas

Question 2

The money price of a pizza is $12 per pizza and the money price of a taco is $2 per taco. The relative price of a pizza is

Accepted Answer

A)  $12 per pizza. 
B)  $24 per pizza. 
C)  6 tacos per pizza. 
D)  1/6 pizza per taco. 
A)  $12 per pizza. 
B)  $24 per pizza. 
C)  6 tacos per pizza. 
D)  1/6 pizza per taco.

Question 3

An economist says: "The supply curve has two interpretations." What does the economist mean?

Accepted Answer

The first interpretation is that the sup

Question 4

In early 2009 the price of computer memory chips rose. In a demand and supply model, shifts in what curve(s)could have brought about the higher price?

Accepted Answer

The higher price could have been brought

Question 5

-Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. Which of the following could result in a movement to point d?

Accepted Answer

A)  a decrease in income 
B)  an increase in the relative price of a soft drink 
C)  a decrease in the relative price of a soft drink 
D)  a decrease in the price of bottled water 
A)  a decrease in income 
B)  an increase in the relative price of a soft drink 
C)  a decrease in the relative price of a soft drink 
D)  a decrease in the price of bottled water

Question 6

A complement is a good

Accepted Answer

A)  of lower quality than another good. 
B)  used in conjunction with another good. 
C)  used instead of another good. 
D)  of higher quality than another good. 
A)  of lower quality than another good. 
B)  used in conjunction with another good. 
C)  used instead of another good. 
D)  of higher quality than another good.

Question 7

A demand curve is also a willingness-and-ability-to-pay curve.

Accepted Answer

A) True 
 B)False

Question 8

Using the data in the above table, at the price of $80 a phone, a

Accepted Answer

A)  shortage of 25 thousand cellular telephones occurs. 
B)  surplus of 80 thousand cellular telephones occurs. 
C)  surplus of 25 thousand cellular telephones occurs. 
D)  shortage of 55 thousand cellular telephones occurs. 
A)  shortage of 25 thousand cellular telephones occurs. 
B)  surplus of 80 thousand cellular telephones occurs. 
C)  surplus of 25 thousand cellular telephones occurs. 
D)  shortage of 55 thousand cellular telephones occurs.

Question 9

What is the effect on the price and quantity of wooden desks of a rise in the price of wood?

Accepted Answer

A)  The equilibrium quantity of wooden desks increases and the equilibrium price falls. 
B)  The equilibrium quantity of wooden desks increases and the equilibrium price rises. 
C)  The equilibrium quantity of wooden desks decreases and the equilibrium price falls. 
D)  The equilibrium quantity of wooden desks decreases and the equilibrium price rises. 
A)  The equilibrium quantity of wooden desks increases and the equilibrium price falls. 
B)  The equilibrium quantity of wooden desks increases and the equilibrium price rises. 
C)  The equilibrium quantity of wooden desks decreases and the equilibrium price falls. 
D)  The equilibrium quantity of wooden desks decreases and the equilibrium price rises.

Question 10

An unusually warm winter shifts the

Accepted Answer

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

Question 11

Which of the following will NOT shift the supply curve for pick-up trucks?

Accepted Answer

A)  a technological advance 
B)  an increase in the price of a resource used to produce pick-up trucks 
C)  a change in the number of firms supplying pick-up trucks 
D)  a change in the price of pick-up trucks 
A)  a technological advance 
B)  an increase in the price of a resource used to produce pick-up trucks 
C)  a change in the number of firms supplying pick-up trucks 
D)  a change in the price of pick-up trucks

Question 12

Producers of tablet computers will be able to lower the wage rate that they pay to their workers. You are asked to predict the effects on the supply of tablet computers, and the price of a tablet computer. You predict that the supply curve shifts

Accepted Answer

A)  rightward, and the price is constant. 
B)  leftward, and the price is constant. 
C)  rightward, and the price falls. 
D)  leftward, and the price rises. 
A)  rightward, and the price is constant. 
B)  leftward, and the price is constant. 
C)  rightward, and the price falls. 
D)  leftward, and the price rises.

Question 13

The relative price of a good is

Accepted Answer

A)  an opportunity cost. 
B)  equal to the money price of a good. 
C)  equal to the price of that good divided by the quantity demanded of the good. 
D)  what you get paid for babysitting your cousin. 
A)  an opportunity cost. 
B)  equal to the money price of a good. 
C)  equal to the price of that good divided by the quantity demanded of the good. 
D)  what you get paid for babysitting your cousin.

Question 14

A relative price is

Accepted Answer

A)  the number of dollars that must be given up in exchange for the good. 
B)  also called the money price. 
C)  not an opportunity cost. 
D)  the ratio of one price to another price. 
A)  the number of dollars that must be given up in exchange for the good. 
B)  also called the money price. 
C)  not an opportunity cost. 
D)  the ratio of one price to another price.

Question 15

For consumers, goods A and B are complementary goods. The cost of a resource used in the production of A decreases. As a result

Accepted Answer

A)  the equilibrium price of B will fall and the equilibrium price of A will rise. 
B)  the equilibrium price of B will rise and the equilibrium price of A will fall. 
C)  the equilibrium prices of both A and B will rise. 
D)  the equilibrium prices of both A and B will fall. 
A)  the equilibrium price of B will fall and the equilibrium price of A will rise. 
B)  the equilibrium price of B will rise and the equilibrium price of A will fall. 
C)  the equilibrium prices of both A and B will rise. 
D)  the equilibrium prices of both A and B will fall.

Question 16

Suppose a market begins in equilibrium. If supply increases, then at the original equilibrium price the quantity demanded is

Accepted Answer

A)  is less than the quantity supplied and a surplus results. 
B)  is less than the quantity supplied and a shortage results. 
C)  exceeds the quantity supplied and a surplus results. 
D)  exceeds the quantity supplied and a shortage results. 
A)  is less than the quantity supplied and a surplus results. 
B)  is less than the quantity supplied and a shortage results. 
C)  exceeds the quantity supplied and a surplus results. 
D)  exceeds the quantity supplied and a shortage results.

Question 17

As a result of an increase in the supply of a good, the equilibrium quantity ________ and the equilibrium price ________.

Accepted Answer

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

Question 18

Computers are a complement to computer software. Suppose the price of a computer falls. How does this fall in price affect the demand for computer software and the demand curve for computer software?

Accepted Answer

The fall in the price of a complement in

Question 19

A rise in the price of a good causes producers to supply more of the good. This statement 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 20

The supply curve indicates the minimum quantity that a producer would be willing to supply at alternative prices.

Accepted Answer

A) True 
 B)False

In the market for bananas, the price is $2.00 a bunch. An increase in the supply of bananas decreases the price of bananas and ________.

The money price of a pizza is $12 per pizza and the money price of a taco is $2 per taco. The relative price of a pizza is

An economist says: "The supply curve has two interpretations." What does the economist mean?

In early 2009 the price of computer memory chips rose. In a demand and supply model, shifts in what curve(s)could have brought about the higher price?

-Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. Which of the following could result in a movement to point d?

A complement is a good

A demand curve is also a willingness-and-ability-to-pay curve.

Using the data in the above table, at the price of $80 a phone, a

What is the effect on the price and quantity of wooden desks of a rise in the price of wood?

An unusually warm winter shifts the

Which of the following will NOT shift the supply curve for pick-up trucks?

Producers of tablet computers will be able to lower the wage rate that they pay to their workers. You are asked to predict the effects on the supply of tablet computers, and the price of a tablet computer. You predict that the supply curve shifts

The relative price of a good is

A relative price is

For consumers, goods A and B are complementary goods. The cost of a resource used in the production of A decreases. As a result

Suppose a market begins in equilibrium. If supply increases, then at the original equilibrium price the quantity demanded is

As a result of an increase in the supply of a good, the equilibrium quantity and the equilibrium price .

Computers are a complement to computer software. Suppose the price of a computer falls. How does this fall in price affect the demand for computer software and the demand curve for computer software?

A rise in the price of a good causes producers to supply more of the good. This statement illustrates

The supply curve indicates the minimum quantity that a producer would be willing to supply at alternative prices.

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

In the market for bananas, the price is $2.00 a bunch. An increase in the supply of bananas decreases the price of bananas and ________.

The money price of a pizza is $12 per pizza and the money price of a taco is $2 per taco. The relative price of a pizza is

An economist says: "The supply curve has two interpretations." What does the economist mean?

In early 2009 the price of computer memory chips rose. In a demand and supply model, shifts in what curve(s)could have brought about the higher price?

-Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. Which of the following could result in a movement to point d?

A complement is a good

A demand curve is also a willingness-and-ability-to-pay curve.

Using the data in the above table, at the price of $80 a phone, a

What is the effect on the price and quantity of wooden desks of a rise in the price of wood?

An unusually warm winter shifts the

Which of the following will NOT shift the supply curve for pick-up trucks?

Producers of tablet computers will be able to lower the wage rate that they pay to their workers. You are asked to predict the effects on the supply of tablet computers, and the price of a tablet computer. You predict that the supply curve shifts

The relative price of a good is

A relative price is

For consumers, goods A and B are complementary goods. The cost of a resource used in the production of A decreases. As a result

Suppose a market begins in equilibrium. If supply increases, then at the original equilibrium price the quantity demanded is

As a result of an increase in the supply of a good, the equilibrium quantity ________ and the equilibrium price ________.

Computers are a complement to computer software. Suppose the price of a computer falls. How does this fall in price affect the demand for computer software and the demand curve for computer software?

A rise in the price of a good causes producers to supply more of the good. This statement illustrates

The supply curve indicates the minimum quantity that a producer would be willing to supply at alternative prices.

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

As a result of an increase in the supply of a good, the equilibrium quantity and the equilibrium price .