Question 1

If an increase in the price of Good A causes an increase in the demand for Good B, Goods A and B are said to be substitutes.

Accepted Answer

A) True 
 B)False

Question 2

Based on widespread reaction to the threat of the H1N1 virus, the likely effect on the demand curve for hand sanitizers would be

Accepted Answer

A) ​a shift of the demand curve to the right. 
B) ​a movement downward along the demand curve to the right. 
C) ​a shift of the demand curve to the left. 
D) ​a movement upward along the demand curve to the left. 
A) ​a shift of the demand curve to the right. 
B) ​a movement downward along the demand curve to the right. 
C) ​a shift of the demand curve to the left. 
D) ​a movement upward along the demand curve to the left.

Question 3

Which of the following would be least likely to affect the supply of automobiles?

Accepted Answer

A) ​higher prices for steel and other resources used in producing automobiles 
B) ​a successful physical fitness plan encouraging Americans to walk rather than drive to their destinations 
C) ​a technological improvement reducing the production costs of automobiles 
D) ​increased wages for members of the United Auto Workers union 
A) ​higher prices for steel and other resources used in producing automobiles 
B) ​a successful physical fitness plan encouraging Americans to walk rather than drive to their destinations 
C) ​a technological improvement reducing the production costs of automobiles 
D) ​increased wages for members of the United Auto Workers union

Question 4

Each of the following is a determinant of demand except

Accepted Answer

A) ​tastes. 
B) ​production technology. 
C) ​expectations. 
D) ​the prices of related goods. 
A) ​tastes. 
B) ​production technology. 
C) ​expectations. 
D) ​the prices of related goods.

Question 5

Which of the following would increase the supply of childcare services?

Accepted Answer

A) ​An increase number of childcare facilities 
B) ​An increase in the cost of certification for workers in this field 
C) ​An increase in the price of childcare 
D) ​none of the above 
A) ​An increase number of childcare facilities 
B) ​An increase in the cost of certification for workers in this field 
C) ​An increase in the price of childcare 
D) ​none of the above

Question 6

A movement along the supply curve might be caused by a change in

Accepted Answer

A) ​technology. 
B) ​supplier's input prices. 
C) ​expectations about future prices. 
D) ​the price of the good or service that is being supplied. 
A) ​technology. 
B) ​supplier's input prices. 
C) ​expectations about future prices. 
D) ​the price of the good or service that is being supplied.

Question 7

Which of the following will not increase the demand for iced tea?

Accepted Answer

A) ​an increase in advertising that makes drinking iced tea more appealing 
B) ​an increase in the price of iced coffee, a substitute product 
C) ​an increase in the income of consumers (assume that iced tea is a normal good) 
D) ​a decrease in the price of iced tea 
A) ​an increase in advertising that makes drinking iced tea more appealing 
B) ​an increase in the price of iced coffee, a substitute product 
C) ​an increase in the income of consumers (assume that iced tea is a normal good) 
D) ​a decrease in the price of iced tea

Question 8

A decrease in quantity demanded

Accepted Answer

A) ​illustrated by a movement downward and to the right along a demand curve. 
B) ​illustrated by a movement upward and to the left along a demand curve. 
C) ​shifts the demand curve to the left. 
D) ​shifts the demand curve to the right. 
A) ​illustrated by a movement downward and to the right along a demand curve. 
B) ​illustrated by a movement upward and to the left along a demand curve. 
C) ​shifts the demand curve to the left. 
D) ​shifts the demand curve to the right.

Question 9

A change in which of the following variables does not cause a change in demand?

Accepted Answer

A) ​prices of unrelated goods 
B) ​incomes of demanders 
C) ​the number of demanders 
D) ​tastes of demanders 
A) ​prices of unrelated goods 
B) ​incomes of demanders 
C) ​the number of demanders 
D) ​tastes of demanders

Question 10

The federal government's "Cash For Clunkers" program provided consumers up to $4,500 towards new, environmentally friendly automobiles when trading in a less fuel efficient vehicle. Discuss the effect of this move on the industry's demand curve.

Accepted Answer

The "Cash For Clunkers" program made con

Question 11

Downward shifts are

Accepted Answer

A) ​increases in both demand and supply. 
B) ​decreases in both demand and supply. 
C) ​increases in demand and decreases in supply. 
D) ​increases in supply and decreases in demand. 
A) ​increases in both demand and supply. 
B) ​decreases in both demand and supply. 
C) ​increases in demand and decreases in supply. 
D) ​increases in supply and decreases in demand.

Question 12

The difference between a change in quantity supplied and a change in supply is that a change in:

Accepted Answer

A) ​quantity supplied is caused by a change in a good's own, current price, while a change in supply is caused by a change in some other variable, such as input prices, prices of related goods, expectations, or taxes. 
B) ​supply is caused by a change in a good's own, current price, while a change in the quantity supplied is caused by a change in some other variable, such as input prices, prices of related goods, expectations, or taxes. 
C) ​quantity supplied is a change in the amount people want to sell, while a change in supply is a change in the amount they actually sell. 
D) ​supply and a change in the quantity supplied are the same thing. 
A) ​quantity supplied is caused by a change in a good's own, current price, while a change in supply is caused by a change in some other variable, such as input prices, prices of related goods, expectations, or taxes. 
B) ​supply is caused by a change in a good's own, current price, while a change in the quantity supplied is caused by a change in some other variable, such as input prices, prices of related goods, expectations, or taxes. 
C) ​quantity supplied is a change in the amount people want to sell, while a change in supply is a change in the amount they actually sell. 
D) ​supply and a change in the quantity supplied are the same thing.

Question 13

According to the law of supply:

Accepted Answer

A) ​there is an inverse relationship between price and quantity demanded. 
B) ​there is a direct relationship between price and quantity demanded. 
C) ​there is an inverse relationship between price and the quantity supplied. 
D) ​there is a direct relationship between price and the quantity supplied. 
A) ​there is an inverse relationship between price and quantity demanded. 
B) ​there is a direct relationship between price and quantity demanded. 
C) ​there is an inverse relationship between price and the quantity supplied. 
D) ​there is a direct relationship between price and the quantity supplied.

Question 14

If bad weather destroyed half of the current coffee crop, ceteris paribus, it would:

Accepted Answer

A) ​increase the demand for coffee. 
B) ​decrease the demand for coffee. 
C) ​increase the demand for tea. 
D) ​decrease the demand for tea. 
A) ​increase the demand for coffee. 
B) ​decrease the demand for coffee. 
C) ​increase the demand for tea. 
D) ​decrease the demand for tea.

Question 15

If a surplus exists in a market, then we know that the actual price is

Accepted Answer

A) ​above the equilibrium price, and quantity supplied is greater than quantity demanded. 
B) ​above the equilibrium price, and quantity demanded is greater than quantity supplied. 
C) ​below the equilibrium price, and quantity demanded is greater than quantity supplied. 
D) ​below the equilibrium price, and quantity supplied is greater than quantity demanded. 
A) ​above the equilibrium price, and quantity supplied is greater than quantity demanded. 
B) ​above the equilibrium price, and quantity demanded is greater than quantity supplied. 
C) ​below the equilibrium price, and quantity demanded is greater than quantity supplied. 
D) ​below the equilibrium price, and quantity supplied is greater than quantity demanded.

Question 16

You lose your job and, as a result, you buy fewer iTunes music downloads. This shows that you consider iTunes music downloads to be a(n)

Accepted Answer

A) ​luxury good. 
B) ​inferior good. 
C) ​normal good. 
D) ​complementary good. 
A) ​luxury good. 
B) ​inferior good. 
C) ​normal good. 
D) ​complementary good.

Question 17

Which of the following scenarios would prompt producers to supply less now than they otherwise would have?

Accepted Answer

A) ​Producers expecting a higher price in the future 
B) ​Producers expecting prices to remain unchanged 
C) ​Producers expecting a lower price in the future 
D) ​Producers expecting prices to be volatile 
A) ​Producers expecting a higher price in the future 
B) ​Producers expecting prices to remain unchanged 
C) ​Producers expecting a lower price in the future 
D) ​Producers expecting prices to be volatile

Question 18

Beach resorts raise their prices during the summer months and yet more people book rooms at those times. Is this a violation of the law of demand?

Accepted Answer

No. During summer months, the demand for

Question 19

​Exhibit 4-4  
-Refer to Exhibit 4-4. A change from Point A to Point B represents a(n):

Accepted Answer

A) ​increase in demand. 
B) ​decrease in demand. 
C) ​decrease in quantity demanded. 
D) ​increase in quantity demanded. 
A) ​increase in demand. 
B) ​decrease in demand. 
C) ​decrease in quantity demanded. 
D) ​increase in quantity demanded.

Question 20

Which of the following would reduce the supply of computers?

Accepted Answer

A) ​higher wage rates for the workers that assemble the computers 
B) ​a technological improvement that lowers the cost of producing the computers 
C) ​a reduction in the price of computer chips used to produce the computers 
D) ​All of the above would reduce the supply of computers. 
A) ​higher wage rates for the workers that assemble the computers 
B) ​a technological improvement that lowers the cost of producing the computers 
C) ​a reduction in the price of computer chips used to produce the computers 
D) ​All of the above would reduce the supply of computers.

Exam 4: Demand, Supply, and Market Equilibrium

If an increase in the price of Good A causes an increase in the demand for Good B, Goods A and B are said to be substitutes.

Based on widespread reaction to the threat of the H1N1 virus, the likely effect on the demand curve for hand sanitizers would be

Which of the following would be least likely to affect the supply of automobiles?

Each of the following is a determinant of demand except

Which of the following would increase the supply of childcare services?

A movement along the supply curve might be caused by a change in

Which of the following will not increase the demand for iced tea?

A decrease in quantity demanded

A change in which of the following variables does not cause a change in demand?

The federal government's "Cash For Clunkers" program provided consumers up to $4,500 towards new, environmentally friendly automobiles when trading in a less fuel efficient vehicle. Discuss the effect of this move on the industry's demand curve.

Downward shifts are

The difference between a change in quantity supplied and a change in supply is that a change in:

According to the law of supply:

If bad weather destroyed half of the current coffee crop, ceteris paribus, it would:

If a surplus exists in a market, then we know that the actual price is

You lose your job and, as a result, you buy fewer iTunes music downloads. This shows that you consider iTunes music downloads to be a(n)

Which of the following scenarios would prompt producers to supply less now than they otherwise would have?

Beach resorts raise their prices during the summer months and yet more people book rooms at those times. Is this a violation of the law of demand?

​Exhibit 4-4 -Refer to Exhibit 4-4. A change from Point A to Point B represents a(n):

Which of the following would reduce the supply of computers?

The Role and Method of Economics

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Market in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Filters

Exhibit 4-4 -Refer to Exhibit 4-4. A change from Point A to Point B represents a(n):