Question 1

Which of the following would shift the supply curve for a product to the right?

Accepted Answer

A) an increase in the price of a resource used in the good's production 
B) the expectation of a higher price in the near future 
C) an increase in the price of the product 
D) an increase in the price of an alternative good 
E) an improvement in the technology for producing the good 
A) an increase in the price of a resource used in the good's production 
B) the expectation of a higher price in the near future 
C) an increase in the price of the product 
D) an increase in the price of an alternative good 
E) an improvement in the technology for producing the good

Question 2

Exhibit 4-2  
-Consider Exhibit 4-2 which shows 3 supply curves for milk.Which of the following would shift the supply curve for milk from S1 to S2?

Accepted Answer

A) an increase in the price cattle feed 
B) the expectation of a higher price in the near future 
C) an increase in the price of milk 
D) an increase in the price of beef 
E) a decrease in the number of dairy farmers 
A) an increase in the price cattle feed 
B) the expectation of a higher price in the near future 
C) an increase in the price of milk 
D) an increase in the price of beef 
E) a decrease in the number of dairy farmers

Question 3

Supply curves generally slope upward because of all of the following reasons except one.Which is the exception?

Accepted Answer

A) Producers are willing to offer more of a good at higher prices. 
B) A higher price attracts resources from less-valued uses. 
C) Producers must be compensated for the rising opportunity cost of additional output. 
D) Producers have a greater incentive to sell more as the price increases. 
E) The price of a good usually must fall to induce an increase in quantity supplied. 
A) Producers are willing to offer more of a good at higher prices. 
B) A higher price attracts resources from less-valued uses. 
C) Producers must be compensated for the rising opportunity cost of additional output. 
D) Producers have a greater incentive to sell more as the price increases. 
E) The price of a good usually must fall to induce an increase in quantity supplied.

Question 4

If demand increases and supply decreases,

Accepted Answer

A) equilibrium price will fall and equilibrium quantity will rise 
B) equilibrium price and quantity will both rise 
C) equilibrium quantity will rise; equilibrium price will either rise or fall 
D) equilibrium price will fall; equilibrium quantity will either rise or fall 
E) equilibrium price will rise; equilibrium quantity will either rise,fall,or remain unchanged 
A) equilibrium price will fall and equilibrium quantity will rise 
B) equilibrium price and quantity will both rise 
C) equilibrium quantity will rise; equilibrium price will either rise or fall 
D) equilibrium price will fall; equilibrium quantity will either rise or fall 
E) equilibrium price will rise; equilibrium quantity will either rise,fall,or remain unchanged

Question 5

Two goods are considered substitutes only if a(n)

Accepted Answer

A) decrease in the demand for one leads to a decrease in the supply of the other 
B) increase in the demand for one leads to a decrease in the supply of the other 
C) increase in the price of one leads to an increase in the demand for the other 
D) decrease in the price of one leads to an increase in the demand for the other 
E) decrease in the supply of one leads producers to switch to production of the other 
A) decrease in the demand for one leads to a decrease in the supply of the other 
B) increase in the demand for one leads to a decrease in the supply of the other 
C) increase in the price of one leads to an increase in the demand for the other 
D) decrease in the price of one leads to an increase in the demand for the other 
E) decrease in the supply of one leads producers to switch to production of the other

Question 6

Movements along a demand curve are called changes in

Accepted Answer

A) demand 
B) opportunity costs 
C) quantity demanded 
D) the substitution effect 
E) preferences 
A) demand 
B) opportunity costs 
C) quantity demanded 
D) the substitution effect 
E) preferences

Question 7

The law of demand states that

Accepted Answer

A) there is a positive relationship between price and quantity demanded 
B) price is the only factor that influences the quantity that people are willing and able to buy 
C) price and quantity demanded are inversely related 
D) the demand curve shifts whenever the price of a good changes 
E) by producing a product,firms create a demand for it 
A) there is a positive relationship between price and quantity demanded 
B) price is the only factor that influences the quantity that people are willing and able to buy 
C) price and quantity demanded are inversely related 
D) the demand curve shifts whenever the price of a good changes 
E) by producing a product,firms create a demand for it

Question 8

Exhibit 4-14  
-Refer to exhibit 4-14.A decrease in the price of baby formula would cause which of the following to happen?

Accepted Answer

A) a movement from a to b on demand curve D1 
B) demand shift from D1 to D2 
C) movement from c to d on demand curve D2 
D) demand shift from D2 to D1 
E) either a or b 
A) a movement from a to b on demand curve D1 
B) demand shift from D1 to D2 
C) movement from c to d on demand curve D2 
D) demand shift from D2 to D1 
E) either a or b

Question 9

Exhibit 4-15  
-Refer to exhibit 4-15.An increase in the price of baby formula will cause which of the following to occur?

Accepted Answer

A) a movement from a to b on supply curve S1 
B) supply shift from S2 to S1 
C) a movement from d to c on supply curve S2 
D) supply shift from S1 to S2 
E) a movement from b to a on supply curve S1 
A) a movement from a to b on supply curve S1 
B) supply shift from S2 to S1 
C) a movement from d to c on supply curve S2 
D) supply shift from S1 to S2 
E) a movement from b to a on supply curve S1

Question 10

Exhibit 4-11  
-Refer to the supply curve in Exhibit 4-11.If the price increases from P to P',quantity supplied will

Accepted Answer

A) increase 
B) The answer can only be determined with numbers to analyze. 
C) stay the same 
D) drop to zero 
E) decrease 
A) increase 
B) The answer can only be determined with numbers to analyze. 
C) stay the same 
D) drop to zero 
E) decrease

Question 11

Exhibit 4-2  
-Consider Exhibit 4-2.Which of the following represents a decrease in supply?

Accepted Answer

A) a movement from C to D 
B) a movement from D to B 
C) a movement from C to F 
D) a movement from F to E 
E) none of the above represents an increase in the quantity supplied 
A) a movement from C to D 
B) a movement from D to B 
C) a movement from C to F 
D) a movement from F to E 
E) none of the above represents an increase in the quantity supplied

Question 12

Exhibit 4-1  
-Consider Exhibit 4-1 which shows 3 demand curves for corn flakes.Which of the following would be most likely to shift the demand curve from D0 to D1?

Accepted Answer

A) a report that eating corn flakes reduces the risk of cancer 
B) an increase in consumer incomes if corn flakes is an inferior good 
C) a decrease in the price of oatmeal which many consumers consider to be a substitute for corn flakes 
D) an increase in the price milk which many consumers consider to be complement for corn flakes 
E) a decrease in the number of consumers 
A) a report that eating corn flakes reduces the risk of cancer 
B) an increase in consumer incomes if corn flakes is an inferior good 
C) a decrease in the price of oatmeal which many consumers consider to be a substitute for corn flakes 
D) an increase in the price milk which many consumers consider to be complement for corn flakes 
E) a decrease in the number of consumers

Question 13

A decrease in supply will cause a(n)

Accepted Answer

A) increase in demand 
B) decrease in demand 
C) increase in quantity demanded 
D) decrease in quantity demanded 
E) decrease in equilibrium price 
A) increase in demand 
B) decrease in demand 
C) increase in quantity demanded 
D) decrease in quantity demanded 
E) decrease in equilibrium price

Question 14

If both supply and demand increase,then the change in equilibrium quantity is indeterminate.

Accepted Answer

A) True 
 B)False

Question 15

If the price of potato chips increases,other things constant,demand for potato-chip dip will

Accepted Answer

A) not change; only quantity demanded will change 
B) increase because the goods are substitutes 
C) decrease because the goods are substitutes 
D) decrease because the goods are complements 
E) increase because the goods are complements 
A) not change; only quantity demanded will change 
B) increase because the goods are substitutes 
C) decrease because the goods are substitutes 
D) decrease because the goods are complements 
E) increase because the goods are complements

Question 16

Exhibit 4-2  
-Consider Exhibit 4-2.Which of the following represents a decrease in the quantity supplied?

Accepted Answer

A) a movement from C to D 
B) a movement from C to B 
C) a movement from E to D 
D) a movement from F to E 
E) none of the above represents an increase in the quantity supplied 
A) a movement from C to D 
B) a movement from C to B 
C) a movement from E to D 
D) a movement from F to E 
E) none of the above represents an increase in the quantity supplied

Question 17

Studies show that the supply curve for oranges has shifted.Which of the following could not explain the shift of the supply curve?

Accepted Answer

A) Weather conditions have changed. 
B) The price of fertilizer has changed. 
C) The wage paid to orange pickers has changed. 
D) The price of oranges has changed. 
E) The demand for grapefruit has changed. 
A) Weather conditions have changed. 
B) The price of fertilizer has changed. 
C) The wage paid to orange pickers has changed. 
D) The price of oranges has changed. 
E) The demand for grapefruit has changed.

Question 18

If good B is a complement to good A,then a rise in the price of B

Accepted Answer

A) increases the quantity demanded of A 
B) decreases the demand for A 
C) increases the demand for A 
D) decreases the quantity demanded of A 
E) will cause the demand for B to increase 
A) increases the quantity demanded of A 
B) decreases the demand for A 
C) increases the demand for A 
D) decreases the quantity demanded of A 
E) will cause the demand for B to increase

Question 19

The law of demand says that the lower the price of a good,other things constant,

Accepted Answer

A) the smaller the demand for that good 
B) the larger the demand for that good 
C) the smaller the quantity demanded of that good 
D) the larger the quantity demanded of that good 
E) the smaller the real income of consumers and the lower the quantity demanded of that good 
A) the smaller the demand for that good 
B) the larger the demand for that good 
C) the smaller the quantity demanded of that good 
D) the larger the quantity demanded of that good 
E) the smaller the real income of consumers and the lower the quantity demanded of that good

Question 20

The market for chewing gum is competitive with a current price of 50 cents per pack and a quantity of 100,000 packs per day.Which of the following events would lead to a new equilibrium price of 75 cents and a new equilibrium quantity of 125,000?

Accepted Answer

A) an increase in the price of other kinds of candy 
B) an increase in the price of the ingredients used to make chewing gum 
C) an agreement by workers in the chewing gum industry to work for lower wages 
D) a decrease in the number of young people in the population 
E) a decrease in income 
A) an increase in the price of other kinds of candy 
B) an increase in the price of the ingredients used to make chewing gum 
C) an agreement by workers in the chewing gum industry to work for lower wages 
D) a decrease in the number of young people in the population 
E) a decrease in income

Exam 4: Demand, supply, and Markets

Which of the following would shift the supply curve for a product to the right?

Exhibit 4-2 -Consider Exhibit 4-2 which shows 3 supply curves for milk.Which of the following would shift the supply curve for milk from S1 to S2?

Supply curves generally slope upward because of all of the following reasons except one.Which is the exception?

If demand increases and supply decreases,

Two goods are considered substitutes only if a(n)

Movements along a demand curve are called changes in

The law of demand states that

Exhibit 4-14 -Refer to exhibit 4-14.A decrease in the price of baby formula would cause which of the following to happen?

Exhibit 4-15 -Refer to exhibit 4-15.An increase in the price of baby formula will cause which of the following to occur?

Exhibit 4-11 -Refer to the supply curve in Exhibit 4-11.If the price increases from P to P',quantity supplied will

Exhibit 4-2 -Consider Exhibit 4-2.Which of the following represents a decrease in supply?

Exhibit 4-1 -Consider Exhibit 4-1 which shows 3 demand curves for corn flakes.Which of the following would be most likely to shift the demand curve from D0 to D1?

A decrease in supply will cause a(n)

If both supply and demand increase,then the change in equilibrium quantity is indeterminate.

If the price of potato chips increases,other things constant,demand for potato-chip dip will

Exhibit 4-2 -Consider Exhibit 4-2.Which of the following represents a decrease in the quantity supplied?

Studies show that the supply curve for oranges has shifted.Which of the following could not explain the shift of the supply curve?

If good B is a complement to good A,then a rise in the price of B

The law of demand says that the lower the price of a good,other things constant,

The market for chewing gum is competitive with a current price of 50 cents per pack and a quantity of 100,000 packs per day.Which of the following events would lead to a new equilibrium price of 75 cents and a new equilibrium quantity of 125,000?

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Aggregate Demand

Baggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

Externalities and the Environment

International Finance

Economic Development

understanding Graphs

National Income Accounts

The Algebra of Demand-Side Equilibrium

Filters

Exhibit 4-2 -Consider Exhibit 4-2 which shows 3 supply curves for milk.Which of the following would shift the supply curve for milk from S₁ to S₂?

Exhibit 4-1 -Consider Exhibit 4-1 which shows 3 demand curves for corn flakes.Which of the following would be most likely to shift the demand curve from D₀ to D₁?