Question 1

If consumers buy a large number of plug-in electric cars, the equilibrium price of electricity will ________ and the equilibrium quantity of electricity will ________.

Accepted Answer

A)  rise; increase 
B)  rise; decrease 
C)  fall; increase 
D)  fall; decrease 
E)  not change; increase

Question 2

The market demand curve for mangos is

Accepted Answer

A)  the same as the demand curve of one buyer in a market with many buyers. 
B)  upward sloping because rich people can afford more mangos than poor people can buy. 
C)  the horizontal sum of the individual demand curves of all the buyers. 
D)  the vertical sum of the individual demand curves of all the buyers. 
E)  the horizontal average of the individual demand curves of all the buyers.

Question 3

If there is a surplus of a good, the quantity demanded is ________ the quantity supplied and the price will ________.

Accepted Answer

A)  less than; rise 
B)  less than; fall 
C)  greater than; rise 
D)  greater than; fall 
E)  equal to; fall

Question 4

-In the figure above, a price of $35 per dozen roses results in

Accepted Answer

A)  a shortage. 
B)  equilibrium. 
C)  a surplus. 
D)  upward pressure on the price of roses. 
E)  an eventual rightward shift of the demand curve and/or leftward shift of the supply curve.

Question 5

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

Question 6

If both producers and consumers believe that a product's price will rise in the future, then at the present, demand ________ and supply ________.

Accepted Answer

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

Question 7

When the demand curve shifts rightward and the market moves to a new equilibrium, then the

Accepted Answer

A)  supply increases. 
B)  supply decreases. 
C)  quantity supplied increases. 
D)  quantity supplied decreases. 
E)  price falls to restore the equilibrium.

Question 8

The quantity supplied of a good or service is the

Accepted Answer

A)  list of all quantities at different prices, as illustrated by a supply schedule and a supply curve. 
B)  list of all quantities at different prices, as illustrated by a demand schedule and a demand curve. 
C)  one quantity produced at a variety of prices. 
D)  quantity produced at one price.

Question 9

If the demand for used cars decreases after the price of a new car falls, used cars and new cars are

Accepted Answer

A)  inferior goods. 
B)  substitute goods. 
C)  complementary goods. 
D)  normal goods. 
E)  The questions errs because it is the quantity of used cars, NOT the demand for used cars, that will change when the price of a new car falls.

Question 10

The number of buyers of sport utility vehicles, SUV, decreases sharply.So the

Accepted Answer

A)  demand curve for SUVs shifts leftward. 
B)  demand curve for SUVs shifts rightward. 
C)  demand curve for SUVs does not shift nor is there a movement along then demand curve. 
D)  demand curve for SUVs does not shift but there is a movement downward along it. 
E)  the supply curve for SUVs shifts rightward.

Question 11

Car insurance and cars are complements.If the price of car insurance increases, the

Accepted Answer

A)  demand for cars decreases. 
B)  demand for cars increases. 
C)  quantity of cars demanded decreases. 
D)  quantity of cars demanded increases. 
E)  More information is needed to determine if the demand increases or decreases.

Question 12

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 13

-In the figure above, a price of $15 per dozen roses results in

Accepted Answer

A)  equilibrium. 
B)  a shortage. 
C)  a surplus. 
D)  downward pressure on the price of roses. 
E)  an eventual leftward shift of the demand curve and/or rightward shift of the supply curve.

Question 14

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 15

A surplus of cardboard boxes means that

Accepted Answer

A)  at the current price of a cardboard box, the quantity demanded exceeds the quantity supplied. 
B)  at the current price of a cardboard box, the quantity demanded is less than the quantity supplied. 
C)  the current price of a cardboard box is less than the equilibrium price. 
D)  at the current price of a cardboard box, the quantity demanded equals the quantity supplied and the price will fall to restore the equilibrium.. 
E)  More information is needed to determine if the price of cardboard boxes is higher than, lower than, or equal to the equilibrium price.

Question 16

If an early frost destroys most of the apple crop, the equilibrium price of an apple ________ and the equilibrium quantity ________.

Accepted Answer

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

Question 17

Computer chips are a normal good.Suppose the economy slips into a recession so that income falls.As a result, the demand for computer chips ________ so that the price of a computer chip ________.

Accepted Answer

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

Question 18

Consider the market for peanut butter.If there is a decrease in the price of deli turkey slices (a substitute in consumption for peanut butter) along with a decrease in the price of peanut brittle (a substitute in production for peanut butter), the

Accepted Answer

A)  equilibrium price of peanut butter definitely falls. 
B)  equilibrium quantity of peanut definitely decreases. 
C)  equilibrium price of peanut butter might rise or fall. 
D)  equilibrium quantity of peanut butter definitely increases. 
E)  equilibrium price of peanut butter definitely rises.

Question 19

The law of demand refers to how

Accepted Answer

A)  demand changes when people's incomes change. 
B)  demand changes when the prices of substitutes and complements change. 
C)  the quantity demanded changes when the price of the good changes. 
D)  the price of the good changes when people's demand for the good changes. 
E)  the quantity demanded changes when the demand for the good changes.

Question 20

$\begin{array}{ccc}
\begin{array}{c}
\text { Price } \
\text { (dollars per } \
\text { cellular phone) }
\end{array} & \begin{array}{c}
\text { Quantity } \
\text { demanded } \
\text { (thousands) }
\end{array} & \begin{array}{c}
\text { Quantity } \
\text { supplied } \
\text { (thousands) }
\end{array} \
\hline 100 & 50 & 100 \
80 & 55 & 80 \
50 & 60 & 60 \
20 & 100 & 40
\end{array}$
-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.

Exam 4: Demand and Supply

If consumers buy a large number of plug-in electric cars, the equilibrium price of electricity will and the equilibrium quantity of electricity will .

The market demand curve for mangos is

If there is a surplus of a good, the quantity demanded is the quantity supplied and the price will .

-In the figure above, a price of $35 per dozen roses results in

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.

If both producers and consumers believe that a product's price will rise in the future, then at the present, demand and supply .

When the demand curve shifts rightward and the market moves to a new equilibrium, then the

The quantity supplied of a good or service is the

If the demand for used cars decreases after the price of a new car falls, used cars and new cars are

The number of buyers of sport utility vehicles, SUV, decreases sharply.So the

Car insurance and cars are complements.If the price of car insurance increases, the

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?

-In the figure above, a price of $15 per dozen roses results in

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 .

A surplus of cardboard boxes means that

If an early frost destroys most of the apple crop, the equilibrium price of an apple and the equilibrium quantity .

Computer chips are a normal good.Suppose the economy slips into a recession so that income falls.As a result, the demand for computer chips so that the price of a computer chip .

Consider the market for peanut butter.If there is a decrease in the price of deli turkey slices (a substitute in consumption for peanut butter) along with a decrease in the price of peanut brittle (a substitute in production for peanut butter) , the

The law of demand refers to how