Question 1

Suppose that when the price of strawberries decreases,Simone increases her purchase of whipped cream.To Simone

Accepted Answer

A) strawberries and whipped cream are complements. 
B) strawberries and whipped cream and substitutes. 
C) strawberries and whipped cream are normal goods. 
D) strawberries are a normal good and whipped cream is an inferior good. 
A) strawberries and whipped cream are complements. 
B) strawberries and whipped cream and substitutes. 
C) strawberries and whipped cream are normal goods. 
D) strawberries are a normal good and whipped cream is an inferior good.

Question 2

An inferior good is a good for which the quantity demanded decreases as the price increases,holding everything else constant.

Accepted Answer

A) True 
 B)False

Question 3

The cost of raising beef cattle has risen at the same time as consumer preference for beef has fallen.In the market for beef,this would be represented by the equilibrium price ________ and the equilibrium quantity ________.

Accepted Answer

A) increasing;increasing or decreasing 
B) increasing or decreasing;decreasing 
C) decreasing;increasing or decreasing 
D) increasing or decreasing;increasing 
A) increasing;increasing or decreasing 
B) increasing or decreasing;decreasing 
C) decreasing;increasing or decreasing 
D) increasing or decreasing;increasing

Question 4

All else equal,the decrease in the price of complementary products for the Apple Watch,such as Sensoria's wearable technology,would

Accepted Answer

A) shift the supply curve for the Apple Watch to the right. 
B) shift the supply curve for the Apple Watch to the left. 
C) shift the demand curve for the Apple Watch to the right. 
D) shift the demand curve for the Apple Watch to the left. 
A) shift the supply curve for the Apple Watch to the right. 
B) shift the supply curve for the Apple Watch to the left. 
C) shift the demand curve for the Apple Watch to the right. 
D) shift the demand curve for the Apple Watch to the left.

Question 5

How does the decreasing use of DVD players affect the market for prerecorded DVDs?

Accepted Answer

A) The demand curve for prerecorded DVDs shifts to the right. 
B) The quantity of prerecorded DVDs demanded decreases. 
C) The quantity of prerecorded DVDs demanded increases. 
D) The demand curve for prerecorded DVDs shifts to the left. 
A) The demand curve for prerecorded DVDs shifts to the right. 
B) The quantity of prerecorded DVDs demanded decreases. 
C) The quantity of prerecorded DVDs demanded increases. 
D) The demand curve for prerecorded DVDs shifts to the left.

Question 6

All else equal,as the price of a product falls,the quantity supplied decreases.

Accepted Answer

A) True 
 B)False

Question 7

What would happen in the market for laser eye surgery if insurance companies started to cover a portion of the price of voluntary procedures?

Accepted Answer

A) Demand will increase,but this will not shift the supply curve. 
B) Supply will increase,but this will not shift the demand curve. 
C) Demand and supply will both increase. 
D) Demand will increase and supply will decrease. 
A) Demand will increase,but this will not shift the supply curve. 
B) Supply will increase,but this will not shift the demand curve. 
C) Demand and supply will both increase. 
D) Demand will increase and supply will decrease.

Question 8

Even when the demand for one good is high,the price of the good is also affected by supply.The textbook illustrates this by comparing the price of two items that were auctioned on the same day.Which of the following describes the results of the auction?

Accepted Answer

A) A letter written by Abraham Lincoln sold for a higher price than a letter written by John Wilkes Booth. 
B) A letter written by Abraham Lincoln was sold for a higher price than a letter written by Adam Smith. 
C) A letter written by John Wilkes Booth sold for a higher price than a letter written by Lee Harvey Oswald. 
D) A letter written by John Wilkes Booth sold for a higher price than a letter written by Abraham Lincoln. 
A) A letter written by Abraham Lincoln sold for a higher price than a letter written by John Wilkes Booth. 
B) A letter written by Abraham Lincoln was sold for a higher price than a letter written by Adam Smith. 
C) A letter written by John Wilkes Booth sold for a higher price than a letter written by Lee Harvey Oswald. 
D) A letter written by John Wilkes Booth sold for a higher price than a letter written by Abraham Lincoln.

Question 9

Draw a demand curve and label it D1.On the graph,illustrate an increase in demand and a decrease in demand,and label the curves D2 and D3,respectively.Starting on demand curve D1,explain the shift that would result from each of the following events:
a.an increase in income and the good is a normal good
b.an increase in income and the good is an inferior good
c.a decrease in the price of a substitute good
d.a decrease in the price of a complementary good
e.an increase in the taste for the good
f.a decrease in population
g.an increase in the expected future price of the good

Accepted Answer

@#IMG-DLM& a,d,e,and g would increase de

Question 10

Suppose that when the price of hamburgers increases,the Ruiz family increases their purchases of hot dogs.To the Ruiz family

Accepted Answer

A) hamburgers and hot dogs are complements. 
B) hamburgers and hot dogs are inferior goods. 
C) hamburgers and hot dogs are normal goods. 
D) hamburgers and hot dogs are substitutes. 
A) hamburgers and hot dogs are complements. 
B) hamburgers and hot dogs are inferior goods. 
C) hamburgers and hot dogs are normal goods. 
D) hamburgers and hot dogs are substitutes.

Question 11

Assume that the price for swimming pool maintenance services has risen and sales of these services have fallen.One can conclude that

Accepted Answer

A) the law of supply has been violated. 
B) the demand for swimming pool maintenance services has increased. 
C) the supply of swimming pool maintenance services has decreased. 
D) swimming pool maintenance services are becoming more technologically advanced. 
A) the law of supply has been violated. 
B) the demand for swimming pool maintenance services has increased. 
C) the supply of swimming pool maintenance services has decreased. 
D) swimming pool maintenance services are becoming more technologically advanced.

Question 12

Figure 3-1  
-Refer to Figure 3-1.An increase in population would be represented by a movement from

Accepted Answer

A) A to B. 
B) B to A. 
C) D1 to D2. 
D) D2 to D1. 
A) A to B. 
B) B to A. 
C) D1 to D2. 
D) D2 to D1.

Question 13

Figure 3-5  
-Refer to Figure 3-5.In a free market such as that depicted above,a shortage is eliminated by

Accepted Answer

A) a price increase,increasing the supply and decreasing the demand. 
B) a price decrease,decreasing the supply and increasing the demand. 
C) a price decrease,decreasing the quantity supplied and increasing the quantity demanded. 
D) a price increase,increasing the quantity supplied and decreasing the quantity demanded. 
A) a price increase,increasing the supply and decreasing the demand. 
B) a price decrease,decreasing the supply and increasing the demand. 
C) a price decrease,decreasing the quantity supplied and increasing the quantity demanded. 
D) a price increase,increasing the quantity supplied and decreasing the quantity demanded.

Question 14

A change in quantity supplied is represented by a movement along the supply curve.

Accepted Answer

A) True 
 B)False

Question 15

An decrease in quantity supplied is represented by a leftward shift of the supply curve.

Accepted Answer

A) True 
 B)False

Question 16

Figure 3-1  
-Refer to Figure 3-1.If the product represented is a normal good,a decrease in income would be represented by a movement from

Accepted Answer

A) A to B. 
B) B to A. 
C) D1 to D2. 
D) D2 to D1. 
A) A to B. 
B) B to A. 
C) D1 to D2. 
D) D2 to D1.

Question 17

What is the difference between a market equilibrium and a competitive market equilibrium?

Accepted Answer

A market equilibrium is a situ

Question 18

A decrease in the equilibrium price for a product will result

Accepted Answer

A) when the quantity demanded for the product exceeds the quantity supplied. 
B) when there is a decrease in supply and a decrease in demand for the product. 
C) when there is an increase in supply and a decrease in demand for the product. 
D) when there is a decrease in demand and a decrease in the number of firms producing the product. 
A) when the quantity demanded for the product exceeds the quantity supplied. 
B) when there is a decrease in supply and a decrease in demand for the product. 
C) when there is an increase in supply and a decrease in demand for the product. 
D) when there is a decrease in demand and a decrease in the number of firms producing the product.

Question 19

Figure 3-8  
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D1 and S1 (point A).If the price of oranges,a substitute for apples,decreases and the wages of apple workers increase,how will the equilibrium point change?

Accepted Answer

A) The equilibrium point will move from A to E. 
B) The equilibrium point will move from A to B. 
C) The equilibrium point will move from A to C. 
D) The equilibrium will first move from A to B,then return to A. 
A) The equilibrium point will move from A to E. 
B) The equilibrium point will move from A to B. 
C) The equilibrium point will move from A to C. 
D) The equilibrium will first move from A to B,then return to A.

Question 20

Which of the following has occurred as the millennial generation has come of age?

Accepted Answer

A) The demand for "fast casual" food has decreased in the U.S.market. 
B) The demand for golf equipment has increased in the U.S.market. 
C) The demand for traditional fast food has decreased in the U.S.market. 
D) all of the above 
A) The demand for "fast casual" food has decreased in the U.S.market. 
B) The demand for golf equipment has increased in the U.S.market. 
C) The demand for traditional fast food has decreased in the U.S.market. 
D) all of the above

Exam 3: Where Prices Come From: the Interaction of Demand and Supply

Suppose that when the price of strawberries decreases,Simone increases her purchase of whipped cream.To Simone

An inferior good is a good for which the quantity demanded decreases as the price increases,holding everything else constant.

The cost of raising beef cattle has risen at the same time as consumer preference for beef has fallen.In the market for beef,this would be represented by the equilibrium price ________ and the equilibrium quantity ________.

All else equal,the decrease in the price of complementary products for the Apple Watch,such as Sensoria's wearable technology,would

How does the decreasing use of DVD players affect the market for prerecorded DVDs?

All else equal,as the price of a product falls,the quantity supplied decreases.

What would happen in the market for laser eye surgery if insurance companies started to cover a portion of the price of voluntary procedures?

Even when the demand for one good is high,the price of the good is also affected by supply.The textbook illustrates this by comparing the price of two items that were auctioned on the same day.Which of the following describes the results of the auction?

Suppose that when the price of hamburgers increases,the Ruiz family increases their purchases of hot dogs.To the Ruiz family

Assume that the price for swimming pool maintenance services has risen and sales of these services have fallen.One can conclude that

Figure 3-1 -Refer to Figure 3-1.An increase in population would be represented by a movement from

Figure 3-5 -Refer to Figure 3-5.In a free market such as that depicted above,a shortage is eliminated by

A change in quantity supplied is represented by a movement along the supply curve.

An decrease in quantity supplied is represented by a leftward shift of the supply curve.

Figure 3-1 -Refer to Figure 3-1.If the product represented is a normal good,a decrease in income would be represented by a movement from

What is the difference between a market equilibrium and a competitive market equilibrium?

A decrease in the equilibrium price for a product will result

Which of the following has occurred as the millennial generation has come of age?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms,the Stock Market,and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, taxes, and the Distribution of Income

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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The cost of raising beef cattle has risen at the same time as consumer preference for beef has fallen.In the market for beef,this would be represented by the equilibrium price and the equilibrium quantity .