Question 1

Which of the following would be most likely to increase the demand for downtown parking in a large city?

Accepted Answer

A) improved bus service to the downtown area 
B) lower downtown parking fees 
C) more downtown parking lots 
D) more freeways leading to the downtown area 
E) a major employer moves to the suburbs 
A) improved bus service to the downtown area 
B) lower downtown parking fees 
C) more downtown parking lots 
D) more freeways leading to the downtown area 
E) a major employer moves to the suburbs

Question 2

The difference between normal and inferior goods is that

Accepted Answer

A) normal goods are of better quality than inferior goods 
B) an increase in price will shift the demand curve for a normal good rightward and the demand curve for an inferior good leftward 
C) if the price of a normal good increases,individuals who buy it are poorer; for inferior goods,the opposite is true 
D) an inferior good is something that will not be demanded until quantities of the normal good have been exhausted 
E) an increase in income will shift the demand curve for a normal good rightward and the demand curve for an inferior good leftward 
A) normal goods are of better quality than inferior goods 
B) an increase in price will shift the demand curve for a normal good rightward and the demand curve for an inferior good leftward 
C) if the price of a normal good increases,individuals who buy it are poorer; for inferior goods,the opposite is true 
D) an inferior good is something that will not be demanded until quantities of the normal good have been exhausted 
E) an increase in income will shift the demand curve for a normal good rightward and the demand curve for an inferior good leftward

Question 3

Which of the following events would increase the supply of tomatoes?

Accepted Answer

A) the introduction of mechanized tomato pickers,which raises the cost of production 
B) an increase in wages for the tomato pickers 
C) a decrease in the cost of fertilizer for the tomato plants 
D) unseasonably hot,dry weather in the tomato-growing regions of the nation 
E) a decrease in the price of pasta products 
A) the introduction of mechanized tomato pickers,which raises the cost of production 
B) an increase in wages for the tomato pickers 
C) a decrease in the cost of fertilizer for the tomato plants 
D) unseasonably hot,dry weather in the tomato-growing regions of the nation 
E) a decrease in the price of pasta products

Question 4

Exhibit 4-15  
-Refer to exhibit 4-15.The discovery that breast milk offers greater health protection to babies than baby formula will cause which of the following to happen?

Accepted Answer

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

Question 5

The income effect refers to the impact of a change in

Accepted Answer

A) income on the price of a good 
B) the general price level caused by a change in the price of another good 
C) the price of a good on real income 
D) the price of a substitute for the good under consideration 
E) demand when income changes 
A) income on the price of a good 
B) the general price level caused by a change in the price of another good 
C) the price of a good on real income 
D) the price of a substitute for the good under consideration 
E) demand when income changes

Question 6

Which of the following could shift the demand for a good to the right?

Accepted Answer

A) a decrease in income,if the good is a normal good 
B) an increase in the price of a complementary good 
C) a decrease in the good's price,if the good is normal 
D) an increase in the good's price,if the good is inferior 
E) an expectation of a future price increase 
A) a decrease in income,if the good is a normal good 
B) an increase in the price of a complementary good 
C) a decrease in the good's price,if the good is normal 
D) an increase in the good's price,if the good is inferior 
E) an expectation of a future price increase

Question 7

A price ceiling set below the equilibrium price will result in a shortage.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is correct when a price floor is set above the equilibrium price?

Accepted Answer

A) quantity supplied is less than quantity demanded at the set price 
B) quantity supplied is equal to quantity demanded at the set price 
C) at the set price there will be a shortage 
D) The market price is greater than the price floor 
E) quantity supplied exceeds quantity demanded at the set price 
A) quantity supplied is less than quantity demanded at the set price 
B) quantity supplied is equal to quantity demanded at the set price 
C) at the set price there will be a shortage 
D) The market price is greater than the price floor 
E) quantity supplied exceeds quantity demanded at the set price

Question 9

Exhibit 4-15  
-Refer to exhibit 4-15.The development of more efficient production technologies for baby formula will cause which of the following to happen?

Accepted Answer

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

Question 10

Which of the following causes the supply of leather jackets to decrease?

Accepted Answer

A) an increase in the price of leather jackets 
B) an increase in the price of leather 
C) a decrease in the price of zippers 
D) an increase in the number of motorcycles 
E) a decrease in consumer income 
A) an increase in the price of leather jackets 
B) an increase in the price of leather 
C) a decrease in the price of zippers 
D) an increase in the number of motorcycles 
E) a decrease in consumer income

Question 11

The market supply curve of a particular product indicates the total quantities

Accepted Answer

A) that are actually sold during a given time period 
B) that buyers are willing to purchase at alternative prices 
C) that sellers are willing and able to offer at alternative prices 
D) that sellers are willing to offer for sale 
E) of complements offered for sale 
A) that are actually sold during a given time period 
B) that buyers are willing to purchase at alternative prices 
C) that sellers are willing and able to offer at alternative prices 
D) that sellers are willing to offer for sale 
E) of complements offered for sale

Question 12

Jennifer learns that the price of CDs will be going up 10 percent next week.She usually buys three CDs per week.What happens to Jennifer's demand for CDs this week?

Accepted Answer

A) It does not change because only quantity demanded changes when price changes. 
B) It increases because the price will be lower next week. 
C) It decreases because the price will be higher next week. 
D) It increases because the price will be higher next week. 
E) It decreases because the price will be lower next week. 
A) It does not change because only quantity demanded changes when price changes. 
B) It increases because the price will be lower next week. 
C) It decreases because the price will be higher next week. 
D) It increases because the price will be higher next week. 
E) It decreases because the price will be lower next week.

Question 13

If the price of vanilla ice cream decreases,it is likely that

Accepted Answer

A) demand for vanilla ice cream will increase 
B) demand for vanilla ice cream will decrease 
C) demand for chocolate ice cream will increase 
D) demand for chocolate ice cream will decrease 
E) the quantity demanded of vanilla ice cream will decrease 
A) demand for vanilla ice cream will increase 
B) demand for vanilla ice cream will decrease 
C) demand for chocolate ice cream will increase 
D) demand for chocolate ice cream will decrease 
E) the quantity demanded of vanilla ice cream will decrease

Question 14

If demand decreases and supply increases,price will

Accepted Answer

A) always increase 
B) always decrease 
C) increase only if supply increases more than demand decreases 
D) increase only if supply increases less than demand decreases 
E) decrease only if supply increases more than demand decreases 
A) always increase 
B) always decrease 
C) increase only if supply increases more than demand decreases 
D) increase only if supply increases less than demand decreases 
E) decrease only if supply increases more than demand decreases

Question 15

Exhibit 4-2  
-Consider Exhibit 4-2.Which of the following represents an increase 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 16

Assume that supply increases slightly and demand increases greatly.Which of the following will happen?

Accepted Answer

A) equilibrium price will fall and equilibrium quantity will rise 
B) equilibrium price will rise and equilibrium quantity will fall 
C) equilibrium price will rise and equilibrium quantity will rise 
D) equilibrium price will fall and equilibrium quantity will fall 
E) neither equilibrium price nor equilibrium quantity will change 
A) equilibrium price will fall and equilibrium quantity will rise 
B) equilibrium price will rise and equilibrium quantity will fall 
C) equilibrium price will rise and equilibrium quantity will rise 
D) equilibrium price will fall and equilibrium quantity will fall 
E) neither equilibrium price nor equilibrium quantity will change

Question 17

If supply decreases along a given demand curve,

Accepted Answer

A) an excess quantity demanded will be created,increasing the equilibrium price and causing equilibrium quantity to fall 
B) an excess quantity supplied will be created,lowering the equilibrium price and causing equilibrium quantity to rise 
C) an excess quantity demanded will be created,raising the equilibrium price and quantity 
D) an excess quantity supplied will be created,lowering the equilibrium price and quantity 
E) price will fall,shifting the demand curve outward,raising the equilibrium quantity 
A) an excess quantity demanded will be created,increasing the equilibrium price and causing equilibrium quantity to fall 
B) an excess quantity supplied will be created,lowering the equilibrium price and causing equilibrium quantity to rise 
C) an excess quantity demanded will be created,raising the equilibrium price and quantity 
D) an excess quantity supplied will be created,lowering the equilibrium price and quantity 
E) price will fall,shifting the demand curve outward,raising the equilibrium quantity

Question 18

A demand curve usually has a

Accepted Answer

A) negative slope because price and quantity demanded are inversely related 
B) negative slope because as price rises,demand falls 
C) positive slope because price and quantity demanded are positively related 
D) positive slope because price and quantity demanded are inversely related 
E) slope of zero because there is no change along a demand curve when everything else is held constant 
A) negative slope because price and quantity demanded are inversely related 
B) negative slope because as price rises,demand falls 
C) positive slope because price and quantity demanded are positively related 
D) positive slope because price and quantity demanded are inversely related 
E) slope of zero because there is no change along a demand curve when everything else is held constant

Question 19

If the government imposes a ceiling price on apartment rents,we would expect to observe all of the following except one.Which is the exception?

Accepted Answer

A) an increase in the number of new apartment complexes being built 
B) long waiting lists for apartment seekers 
C) lower maintenance of existing apartments 
D) conversion of some apartment complexes to condos 
E) a shortage 
A) an increase in the number of new apartment complexes being built 
B) long waiting lists for apartment seekers 
C) lower maintenance of existing apartments 
D) conversion of some apartment complexes to condos 
E) a shortage

Question 20

An increase in the demand for peanut butter could be caused by a(n)

Accepted Answer

A) decrease in consumer income 
B) increase in the supply of peanut butter 
C) decrease in the price of bread 
D) drought in Georgia that destroyed 30 percent of the peanut crop 
E) decrease in the price of bologna 
A) decrease in consumer income 
B) increase in the supply of peanut butter 
C) decrease in the price of bread 
D) drought in Georgia that destroyed 30 percent of the peanut crop 
E) decrease in the price of bologna

Exam 4: Demand, supply, and Markets

Which of the following would be most likely to increase the demand for downtown parking in a large city?

The difference between normal and inferior goods is that

Which of the following events would increase the supply of tomatoes?

Exhibit 4-15 -Refer to exhibit 4-15.The discovery that breast milk offers greater health protection to babies than baby formula will cause which of the following to happen?

The income effect refers to the impact of a change in

Which of the following could shift the demand for a good to the right?

A price ceiling set below the equilibrium price will result in a shortage.

Which of the following is correct when a price floor is set above the equilibrium price?

Exhibit 4-15 -Refer to exhibit 4-15.The development of more efficient production technologies for baby formula will cause which of the following to happen?

Which of the following causes the supply of leather jackets to decrease?

The market supply curve of a particular product indicates the total quantities

Jennifer learns that the price of CDs will be going up 10 percent next week.She usually buys three CDs per week.What happens to Jennifer's demand for CDs this week?

If the price of vanilla ice cream decreases,it is likely that

If demand decreases and supply increases,price will

Exhibit 4-2 -Consider Exhibit 4-2.Which of the following represents an increase in the quantity supplied?

Assume that supply increases slightly and demand increases greatly.Which of the following will happen?

If supply decreases along a given demand curve,

A demand curve usually has a

If the government imposes a ceiling price on apartment rents,we would expect to observe all of the following except one.Which is the exception?

An increase in the demand for peanut butter could be caused by a(n)

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

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