Question 1

Quantity supplied refers to the amount of a good or service that a firm is willing and able to supply at a given price.

Accepted Answer

A) True 
 B)False

Question 2

Figure 3-1
 
-Refer to Figure 3-1.An increase in the expected future price of the product 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.

Question 3

Figure 3-4
 
-Refer to Figure 3-4.At a price of $10, how many units will be sold?

Accepted Answer

A) 200 
B) 400 
C) 600 
D) 800

Question 4

Vineyards can grow either red wine grapes or white wine grapes on their land.Which of the following would cause the supply of red wine grapes to decrease?

Accepted Answer

A) an increase in the price of white wine grapes 
B) a decrease in the price of white wine grapes 
C) an increase in the demand for red wine grapes 
D) an increase in the price of red wine

Question 5

A decrease in the demand for soft drinks due to changes in consumer tastes, accompanied by an increase in the supply of soft drinks as a result of reductions in input prices, will result in

Accepted Answer

A) a decrease in the equilibrium quantity of soft drinks and no change in the equilibrium price. 
B) a decrease in the equilibrium price of soft drinks and no change in the equilibrium quantity. 
C) a decrease in the equilibrium price of soft drinks; the equilibrium quantity may increase or decrease. 
D) an increase in the equilibrium quantity of soft drinks; the equilibrium price may increase or decrease.

Question 6

The popularity of digital cameras has enticed large discount stores like Wal-Mart and Costco to offer digital photo printing services.How does this affect the digital photo printing market?

Accepted Answer

A) The demand curve for digital photo printing services shifts to the right. 
B) The demand curve for digital photo printing services shifts to the left. 
C) The supply curve for digital photo printing services shifts to the right. 
D) The supply curve for digital photo printing services shifts to the left.

Question 7

Explain the difference between a normal good and an inferior good.

Accepted Answer

The answer of Explain the difference between a normal good...

Question 8

If a decrease in income leads to an increase in the demand for sardines, then sardines are

Accepted Answer

A) an inferior good. 
B) a neutral good. 
C) a necessity. 
D) a normal good.

Question 9

Figure 3-4
 
-Refer to Figure 3-4.If the price is $10,

Accepted Answer

A) there would be a surplus of 600 units. 
B) there would be a shortage of 600 units. 
C) there would be a surplus of 200 units. 
D) there would be a shortage of 200 units.

Question 10

The law of demand implies, holding everything else constant, that as the price of bagels increases,

Accepted Answer

A) the quantity of bagels demanded will decrease. 
B) the demand for bagels will decrease. 
C) the quantity of bagels demanded will increase. 
D) the demand for bagels will increase.

Question 11

In 1984, the National Minimum Drinking Age Act was passed, raising the legal age to consume alcoholic beverages in the United States to 21.In much of Europe, the legal age to consume alcohol is 18.If the legal drinking age in the United States was changed back to 18, how would this affect the market for alcoholic beverages? What would happen to the equilibrium price and quantity of alcoholic beverages?

Accepted Answer

The answer of In 1984, the National Minimum Drinking Age...

Question 12

How does the decreasing use of traditional cameras affect the market for traditional camera film?

Accepted Answer

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

Question 13

An increase in the number of firms in a market will cause the quantity of a good supplied to increase.

Accepted Answer

A) True 
 B)False

Question 14

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.

Question 15

When the price of a good falls, consumers buy a larger quantity because of the ________ effect and the ________ effect.

Accepted Answer

A) substitution; income 
B) normal; inferior 
C) substitute; complement; 
D) supply; demand

Question 16

A decrease in the equilibrium quantity 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 an increase in the number of firms producing the product.

Question 17

Figure 3-2
 
-Refer to Figure 3-2.An increase in the number of firms in the market would be represented by a movement from

Accepted Answer

A) A to B. 
B) B to A. 
C) S₁ to S₂. 
D) S₂ to S₁.

Question 18

A positive technological change will cause the supply of a good to increase.

Accepted Answer

A) True 
 B)False

Question 19

How does the increasing use of MP3 players affect the market for compact discs?

Accepted Answer

A) The demand curve for compact discs shifts to the right. 
B) The supply curve for compact discs shifts to the left. 
C) The supply curve for compact discs shifts to the right. 
D) The demand curve for compact discs shifts to the left.

Question 20

What is the ceteris paribus condition?

Accepted Answer

The answer of What is the ceteris paribus condition?...

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

Quantity supplied refers to the amount of a good or service that a firm is willing and able to supply at a given price.

Figure 3-1 -Refer to Figure 3-1.An increase in the expected future price of the product would be represented by a movement from

Figure 3-4 -Refer to Figure 3-4.At a price of $10, how many units will be sold?

Vineyards can grow either red wine grapes or white wine grapes on their land.Which of the following would cause the supply of red wine grapes to decrease?

A decrease in the demand for soft drinks due to changes in consumer tastes, accompanied by an increase in the supply of soft drinks as a result of reductions in input prices, will result in

The popularity of digital cameras has enticed large discount stores like Wal-Mart and Costco to offer digital photo printing services.How does this affect the digital photo printing market?

Explain the difference between a normal good and an inferior good.

If a decrease in income leads to an increase in the demand for sardines, then sardines are

Figure 3-4 -Refer to Figure 3-4.If the price is $10,

The law of demand implies, holding everything else constant, that as the price of bagels increases,

How does the decreasing use of traditional cameras affect the market for traditional camera film?

An increase in the number of firms in a market will cause the quantity of a good supplied to increase.

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

When the price of a good falls, consumers buy a larger quantity because of the effect and the effect.

A decrease in the equilibrium quantity for a product will result

Figure 3-2 -Refer to Figure 3-2.An increase in the number of firms in the market would be represented by a movement from

A positive technological change will cause the supply of a good to increase.

How does the increasing use of MP3 players affect the market for compact discs?

What is the ceteris paribus condition?