Question 1

If the demand for digital cameras increases when consumers' incomes rise,then digital cameras are

Accepted Answer

A)  a normal good. 
B)  an inferior good. 
C)  a substitute for camcorders. 
D)  a complement to camcorders. 
E)  made using advanced technology.

Question 2

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.

Question 3

Which of the following increases the supply of gasoline?

Accepted Answer

A)  a situation where the quantity of gasoline demanded exceeds the quantity supplied 
B)  an increase in the price of gasoline 
C)  a decrease in the price of a resource used to produce gasoline, such as crude oil 
D)  a decrease in the demand for gas-guzzling, sport utility vehicles 
E)  an increase in income if gas-guzzling, sport utility vehicles are a normal good

Question 4

Millions of people from Mexico have migrated to the United States.This has reduced the supply of labor in Mexico and increased the supply of labor in the United States.Assume that the demand for labor in Mexico and the United States is unchanged.Then wages in the United States ________ and wages in Mexico ________.

Accepted Answer

A)  fall; rise 
B)  rise; rise 
C)  rise; do not change 
D)  fall; fall 
E)  do not change; fall

Question 5

Hot dogs and hot dog buns are complements.If the price of a hot dog falls,then

Accepted Answer

A)  the demand for hot dogs will increase. 
B)  the demand for hot dog buns will decrease. 
C)  the quantity demanded of hotdogs will decrease. 
D)  the demand for hot dog buns will increase. 
E)  the quantity demanded of hot dog buns will increase.

Question 6

-Using the data in the table above,the equilibrium quantity and equilibrium price for a cellular telephone is

Accepted Answer

A)  50,000 and $100. 
B)  80,000 and $80. 
C)  60,000 and $50. 
D)  40,000 and $20. 
E)  100,000 and $20.

Question 7

If the demand and supply both increase equally,then the equilibrium price ________ and the equilibrium quantity ________.

Accepted Answer

A)  increases; increase 
B)  increases; does not change 
C)  does not change; increases 
D)  increases; decreases 
E)  decreases; does not change

Question 8

Candy makers accurately anticipate the increase in demand for candy for Halloween so that the supply of candy and demand for candy increase the same amount.As a result,the price of candy ________ and the quantity of candy ________.

Accepted Answer

A)  rises; does not change 
B)  falls; increases 
C)  does not change; increases 
D)  does not change; does not change 
E)  rises; increases

Question 9

If good weather conditions result in a larger than normal crop of peaches,then the

Accepted Answer

A)  equilibrium price of peaches rises and the equilibrium quantity of peaches increases. 
B)  equilibrium price of peaches falls and the equilibrium quantity of peaches increases. 
C)  demand curve for peaches shifts leftward. 
D)  increase in the supply of peaches induces a greater demand for peaches, so that the equilibrium price rises and the equilibrium quantity increases. 
E)  equilibrium price of peaches falls and the equilibrium quantity of peaches decreases.

Question 10

-New technology for producing plywood is developed.Which of the figures above best illustrates this change?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  Figure A and Figure D

Question 11

Suppose the equilibrium quantity of movie tickets is 1000.If the demand curve shifts ________,the equilibrium quantity of movie tickets will ________.

Accepted Answer

A)  rightward; increase 
B)  rightward; decrease 
C)  leftward; increase 
D)  rightward; not change 
E)  leftward; not change

Question 12

When there is a shortage of parking spaces at your college,the

Accepted Answer

A)  demand for parking spaces is greater than the supply. 
B)  supply of parking spaces is greater than the demand. 
C)  quantity of parking spaces supplied is greater than the quantity of parking spaces demanded. 
D)  quantity of parking spaces demanded is greater than the quantity of parking spaces supplied. 
E)  Both answers A and D are correct.

Question 13

List the factors that change supply and shift the supply curve.Tell what happens to supply and the supply curve when there is an increase in the factor.

Accepted Answer

The answer of List the factors that change supply and...

Question 14

Milk can be used to produce cheese or butter.If the price of a pound of butter rises,what happens to the supply of cheese?

Accepted Answer

A)  The supply of cheese increases. 
B)  The supply of cheese decreases. 
C)  The supply of cheese stays the same and there is no change in the quantity supplied of cheese. 
D)  The supply of cheese stays the same and there is a decrease in the quantity supplied of cheese. 
E)  The supply of cheese could increase, decrease, or stay the same depending on what happens to the supply of butter.

Question 15

If a freeze destroys oranges before they are harvested,the equilibrium price of an orange ________ and the equilibrium quantity ________.

Accepted Answer

A)  rises; increases 
B)  rises; decreases 
C)  falls; increases 
D)  falls; decreases 
E)  does not change; decreases

Question 16

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.

Question 17

"Other things remaining the same,if the price of a good rises,the quantity supplied of that good increases." This sentence describes a

Accepted Answer

A)  shift of a supply curve. 
B)  shift of the price curve. 
C)  movement along a supply curve. 
D)  movement along the price curve. 
E)  movement along the quantity curve.

Question 18

An increase in the productivity of producing jeans results in

Accepted Answer

A)  the quantity of jeans supplied increasing. 
B)  the supply of jeans increasing. 
C)  buyers demanding more jeans because they are now more efficiently produced. 
D)  buyers demanding fewer jeans because their price will fall, which signals lower quality. 
E)  some change but the impact on the supply of jeans is impossible to predict.

Question 19

Suppose that the price of flour used to produce bagels increases.Hence the equilibrium price of a bagel ________ and the equilibrium quantity ________.

Accepted Answer

A)  rises; increases 
B)  rises; decreases 
C)  falls; increases 
D)  falls; decreases 
E)  does not change; does not change

Question 20

When does a shortage occur?

Accepted Answer

The answer of When does a shortage occur?...

Exam 4: Demand and Supply