Question 1

-The table above shows the situation in the gasoline market in Tulsa,Oklahoma.If the price of a gallon of gasoline is $3.62,then

Accepted Answer

A)  there is a surplus of gasoline in Tulsa. 
B)  there is a shortage of gasoline in Tulsa. 
C)  the gasoline market in Tulsa is in equilibrium. 
D)  Without more information we cannot determine if there is a surplus, a shortage, or an equilibrium in the gasoline market in Tulsa. 
E)  There is neither a surplus nor a shortage, but the market is NOT in equilibrium. 
A)  there is a surplus of gasoline in Tulsa. 
B)  there is a shortage of gasoline in Tulsa. 
C)  the gasoline market in Tulsa is in equilibrium. 
D)  Without more information we cannot determine if there is a surplus, a shortage, or an equilibrium in the gasoline market in Tulsa. 
E)  There is neither a surplus nor a shortage, but the market is NOT in equilibrium.

Question 2

-The above figures show the market for HD televisions.If the price of the LCD screens used to produce these televisions falls,which figure shows the effect of this change in price?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  None of the figures represent this change. 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  None of the figures represent this change.

Question 3

If the price is below the equilibrium price,

Accepted Answer

A)  there is a surplus. 
B)  there is a shortage. 
C)  the supply curve will shift rightward. 
D)  the supply curve will shift leftward. 
E)  the demand curve will shift leftward. 
A)  there is a surplus. 
B)  there is a shortage. 
C)  the supply curve will shift rightward. 
D)  the supply curve will shift leftward. 
E)  the demand curve will shift leftward.

Question 4

A demand schedule shows

Accepted Answer

A)  the quantities that people plan to buy in all possible circumstances. 
B)  the quantities that people plan to buy at each different price when all other influences on buying plans remain the same. 
C)  the quantities that people would plan to buy if they could afford them at each different price when all other influences on buying plans remain the same. 
D)  the quantities that people plan to buy at each different income when all other influences on buying plans remain the same. 
E)  the quantities that people plan to buy at each different price as long as producers are willing to supply that quantity. 
A)  the quantities that people plan to buy in all possible circumstances. 
B)  the quantities that people plan to buy at each different price when all other influences on buying plans remain the same. 
C)  the quantities that people would plan to buy if they could afford them at each different price when all other influences on buying plans remain the same. 
D)  the quantities that people plan to buy at each different income when all other influences on buying plans remain the same. 
E)  the quantities that people plan to buy at each different price as long as producers are willing to supply that quantity.

Question 5

-The above table gives the demand and supply schedules for cat food.If the supply increases by 20 tons at every price,what is the new equilibrium price and quantity?

Accepted Answer

The equilibrium price is $1.50 per pound

Question 6

Suppose the current price of a pound of steak is $6 per pound and the equilibrium price is $9 per pound.What takes place?

Accepted Answer

A)  There is a shortage, so the price falls and quantity demanded increases. 
B)  There is a surplus, so the price falls and quantity demanded increases. 
C)  There is a shortage, so the price rises and quantity demanded decreases. 
D)  There is a shortage, so the price rises and quantity demanded increases. 
E)  There is a shortage, so the price falls and quantity demanded decreases. 
A)  There is a shortage, so the price falls and quantity demanded increases. 
B)  There is a surplus, so the price falls and quantity demanded increases. 
C)  There is a shortage, so the price rises and quantity demanded decreases. 
D)  There is a shortage, so the price rises and quantity demanded increases. 
E)  There is a shortage, so the price falls and quantity demanded decreases.

Question 7

The impact of an increase in the price of a particular good is illustrated as a

Accepted Answer

A)  leftward shift in its demand curve. 
B)  rightward shift in its demand curve. 
C)  movement upward and to the left along its demand curve. 
D)  movement downward and to the right along its demand curve. 
E)  rightward shift in its demand curve and a movement upward and to the left along its demand curve. 
A)  leftward shift in its demand curve. 
B)  rightward shift in its demand curve. 
C)  movement upward and to the left along its demand curve. 
D)  movement downward and to the right along its demand curve. 
E)  rightward shift in its demand curve and a movement upward and to the left along its demand curve.

Question 8

-The above figure shows the market for laptops.Which of the following causes a movement from A to B?

Accepted Answer

A)  a decrease in the number of laptop manufactures and sellers 
B)  an increase in the productivity of the workers manufacturing laptops 
C)  an increase in the cost of hard drives 
D)  an increase in the price of laptops 
E)  a decrease in the price of laptops 
A)  a decrease in the number of laptop manufactures and sellers 
B)  an increase in the productivity of the workers manufacturing laptops 
C)  an increase in the cost of hard drives 
D)  an increase in the price of laptops 
E)  a decrease in the price of laptops

Question 9

-The graph illustrates the supply of sweaters.Which of the following events will increase the supply of sweaters?

Accepted Answer

A)  a rise in the price of a sweater 
B)  a rise in the wage rate paid to the workers who make sweaters 
C)  a rise in the expected future price of a sweater 
D)  an increase in the number of sellers of sweaters 
E)  an increase in income if sweaters are a normal good 
A)  a rise in the price of a sweater 
B)  a rise in the wage rate paid to the workers who make sweaters 
C)  a rise in the expected future price of a sweater 
D)  an increase in the number of sellers of sweaters 
E)  an increase in income if sweaters are a normal good

Question 10

-The table above shows the situation in the gasoline market in Tulsa,Oklahoma.If the price of a gallon of gasoline is $3.73,then

Accepted Answer

A)  there is a surplus of gasoline in Tulsa. 
B)  there is a shortage of gasoline in Tulsa. 
C)  the gasoline market in Tulsa is in equilibrium. 
D)  Without more information we cannot determine if there is a surplus, a shortage, or an equilibrium in the gasoline market in Tulsa. 
E)  There is neither a surplus nor a shortage, but the market is NOT in equilibrium. 
A)  there is a surplus of gasoline in Tulsa. 
B)  there is a shortage of gasoline in Tulsa. 
C)  the gasoline market in Tulsa is in equilibrium. 
D)  Without more information we cannot determine if there is a surplus, a shortage, or an equilibrium in the gasoline market in Tulsa. 
E)  There is neither a surplus nor a shortage, but the market is NOT in equilibrium.

Question 11

When demand increases and supply decreases by the same amount,the equilibrium quantity ________ and the equilibrium price ________.

Accepted Answer

A)  decreases; rises 
B)  decreases; falls 
C)  decreases; does not change 
D)  decreases; might rise, fall, or not change 
E)  does not change; might rise, fall, or not change 
A)  decreases; rises 
B)  decreases; falls 
C)  decreases; does not change 
D)  decreases; might rise, fall, or not change 
E)  does not change; might rise, fall, or not change

Question 12

Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers.The equilibrium quantity of beef will

Accepted Answer

A)  decrease. 
B)  perhaps increase, decrease, or stay the same, but more information is needed to determine which it does. 
C)  stay the same. 
D)  increase. 
E)  definitely either stay the same or decrease. 
A)  decrease. 
B)  perhaps increase, decrease, or stay the same, but more information is needed to determine which it does. 
C)  stay the same. 
D)  increase. 
E)  definitely either stay the same or decrease.

Question 13

One reason supply curves have an upward slope is because

Accepted Answer

A)  increased supply will require increased technology. 
B)  people will pay a higher price when less is supplied. 
C)  a higher price brings a greater profit, so firms want to sell more of that good. 
D)  to have more of the good supplied requires more firms to open. 
E)  None of the above answers is correct because supply curves have a downward slope. 
A)  increased supply will require increased technology. 
B)  people will pay a higher price when less is supplied. 
C)  a higher price brings a greater profit, so firms want to sell more of that good. 
D)  to have more of the good supplied requires more firms to open. 
E)  None of the above answers is correct because supply curves have a downward slope.

Question 14

Kiwis and strawberries are substitutes for consumers.An increase in the price of a kiwi coupled with an increase in the number of strawberry growers ________ the equilibrium price of a pound of strawberries and ________ the equilibrium quantity of strawberries.

Accepted Answer

A)  raises; increases 
B)  probably changes, but more information is needed to determine if it rises or falls; increases 
C)  raises; probably changes, but more information is needed to determine if it increases or decreases 
D)  lowers; probably changes, but more information is needed to determine if it increases or decreases 
E)  lowers; increases 
A)  raises; increases 
B)  probably changes, but more information is needed to determine if it rises or falls; increases 
C)  raises; probably changes, but more information is needed to determine if it increases or decreases 
D)  lowers; probably changes, but more information is needed to determine if it increases or decreases 
E)  lowers; increases

Question 15

What is the effect on the price and quantity of a product if both the demand and supply simultaneously increase?

Accepted Answer

The equilibrium quantity unambiguously i

Question 16

Over the next few years more and more people prefer to ride on scooters.Which of the figures above best illustrates how this change affects the demand curve for scooters?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  None of the above answers is correct because the change in tastes will affect the supply curve not the demand curve. 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  None of the above answers is correct because the change in tastes will affect the supply curve not the demand curve.

Question 17

The initial equilibrium price in the market for Web pages is $200 per page and 1000 Web pages are created in a month.Many new Web design firms now enter the market.As a result,

Accepted Answer

A)  the supply of Web pages increases and the price falls. 
B)  the supply curve of Web pages shifts leftward and the price falls. 
C)  the demand for Web pages increases and the price rises. 
D)  the supply of web pages increase and the price falls, which then increases the demand for Web pages and the demand curve shifts rightward. 
E)  the demand for Web pages increases and the price falls. 
A)  the supply of Web pages increases and the price falls. 
B)  the supply curve of Web pages shifts leftward and the price falls. 
C)  the demand for Web pages increases and the price rises. 
D)  the supply of web pages increase and the price falls, which then increases the demand for Web pages and the demand curve shifts rightward. 
E)  the demand for Web pages increases and the price falls.

Question 18

-Pizza is a normal good.In the above figure,the shift in the demand curve from D to D? can be the result of

Accepted Answer

A)  a decrease in the price of soda, a complement to pizza. 
B)  an increase in the price of hamburgers, a substitute for pizza. 
C)  a decrease in income. 
D)  a study that shows that pizza is a very healthy food. 
E)  an increase in the cost of producing pizza. 
A)  a decrease in the price of soda, a complement to pizza. 
B)  an increase in the price of hamburgers, a substitute for pizza. 
C)  a decrease in income. 
D)  a study that shows that pizza is a very healthy food. 
E)  an increase in the cost of producing pizza.

Question 19

-In the above figure,an increase in cost of the cheese used to produce pizza

Accepted Answer

A)  shifts the supply curve from S to S1. 
B)  shifts the supply curve from S to S2. 
C)  results in a movement from point a to point b. 
D)  results in a movement from point b to point a. 
E)  has no effect. 
A)  shifts the supply curve from S to S1. 
B)  shifts the supply curve from S to S2. 
C)  results in a movement from point a to point b. 
D)  results in a movement from point b to point a. 
E)  has no effect.

Question 20

Suppose improvements in technology cause the supply of natural gas to increase and at the same time the demand for natural gas increases.What are we sure of?

Accepted Answer

A)  Both equilibrium price and quantity increase. 
B)  Equilibrium price increases. 
C)  Equilibrium price decreases. 
D)  Equilibrium quantity increases. 
E)  Equilibrium quantity decreases. 
A)  Both equilibrium price and quantity increase. 
B)  Equilibrium price increases. 
C)  Equilibrium price decreases. 
D)  Equilibrium quantity increases. 
E)  Equilibrium quantity decreases.

-The table above shows the situation in the gasoline market in Tulsa,Oklahoma.If the price of a gallon of gasoline is $3.62,then

-The above figures show the market for HD televisions.If the price of the LCD screens used to produce these televisions falls,which figure shows the effect of this change in price?

If the price is below the equilibrium price,

A demand schedule shows

-The above table gives the demand and supply schedules for cat food.If the supply increases by 20 tons at every price,what is the new equilibrium price and quantity?

Suppose the current price of a pound of steak is $6 per pound and the equilibrium price is $9 per pound.What takes place?

The impact of an increase in the price of a particular good is illustrated as a

-The above figure shows the market for laptops.Which of the following causes a movement from A to B?

-The graph illustrates the supply of sweaters.Which of the following events will increase the supply of sweaters?

-The table above shows the situation in the gasoline market in Tulsa,Oklahoma.If the price of a gallon of gasoline is $3.73,then

When demand increases and supply decreases by the same amount,the equilibrium quantity and the equilibrium price .

Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers.The equilibrium quantity of beef will

One reason supply curves have an upward slope is because

Kiwis and strawberries are substitutes for consumers.An increase in the price of a kiwi coupled with an increase in the number of strawberry growers the equilibrium price of a pound of strawberries and the equilibrium quantity of strawberries.

What is the effect on the price and quantity of a product if both the demand and supply simultaneously increase?

Over the next few years more and more people prefer to ride on scooters.Which of the figures above best illustrates how this change affects the demand curve for scooters?

The initial equilibrium price in the market for Web pages is $200 per page and 1000 Web pages are created in a month.Many new Web design firms now enter the market.As a result,

-Pizza is a normal good.In the above figure,the shift in the demand curve from D to D? can be the result of

-In the above figure,an increase in cost of the cheese used to produce pizza

Suppose improvements in technology cause the supply of natural gas to increase and at the same time the demand for natural gas increases.What are we sure of?

Getting Started

The U.S.and Global Economies

The Economic Problem

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 4: Demand and Supply

-The table above shows the situation in the gasoline market in Tulsa,Oklahoma.If the price of a gallon of gasoline is $3.62,then

-The above figures show the market for HD televisions.If the price of the LCD screens used to produce these televisions falls,which figure shows the effect of this change in price?

If the price is below the equilibrium price,

A demand schedule shows

-The above table gives the demand and supply schedules for cat food.If the supply increases by 20 tons at every price,what is the new equilibrium price and quantity?

Suppose the current price of a pound of steak is $6 per pound and the equilibrium price is $9 per pound.What takes place?

The impact of an increase in the price of a particular good is illustrated as a

-The above figure shows the market for laptops.Which of the following causes a movement from A to B?

-The graph illustrates the supply of sweaters.Which of the following events will increase the supply of sweaters?

-The table above shows the situation in the gasoline market in Tulsa,Oklahoma.If the price of a gallon of gasoline is $3.73,then

When demand increases and supply decreases by the same amount,the equilibrium quantity ________ and the equilibrium price ________.

Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers.The equilibrium quantity of beef will

One reason supply curves have an upward slope is because

Kiwis and strawberries are substitutes for consumers.An increase in the price of a kiwi coupled with an increase in the number of strawberry growers ________ the equilibrium price of a pound of strawberries and ________ the equilibrium quantity of strawberries.

What is the effect on the price and quantity of a product if both the demand and supply simultaneously increase?

Over the next few years more and more people prefer to ride on scooters.Which of the figures above best illustrates how this change affects the demand curve for scooters?

The initial equilibrium price in the market for Web pages is $200 per page and 1000 Web pages are created in a month.Many new Web design firms now enter the market.As a result,

-Pizza is a normal good.In the above figure,the shift in the demand curve from D to D? can be the result of

-In the above figure,an increase in cost of the cheese used to produce pizza

Suppose improvements in technology cause the supply of natural gas to increase and at the same time the demand for natural gas increases.What are we sure of?

Getting Started

The U.S.and Global Economies

The Economic Problem

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

When demand increases and supply decreases by the same amount,the equilibrium quantity and the equilibrium price .

Kiwis and strawberries are substitutes for consumers.An increase in the price of a kiwi coupled with an increase in the number of strawberry growers the equilibrium price of a pound of strawberries and the equilibrium quantity of strawberries.