Question 1

The "law of supply" states that,other things remaining the same,firms produce

Accepted Answer

A)  more of a good the less it costs to produce it. 
B)  less of a good the more it costs to produce it. 
C)  more of a good the higher its price. 
D)  less of a good as the required resources become scarcer.

Question 2

$$\begin{array} { | c | c | c |} 
\begin{array} { c } 
\hline \text { Price } \
\text { (dollars per } \
\text { pound of cat } \
\text { food) }
\end{array} & \begin{array} { c } 
\hline \text { Quantity } \
\text { demanded } \
\text { (tons of cat } \
\text { food per year) }
\end{array} & \begin{array} { c } 
\hline \text { Quantity } \
\text { supplied } \
\text { (tons of cat } \
\text { food per year) }
\end{array} \
\hline 1.00 & 52 & 15 \
\hline 1.50 & 46 & 26 \
\hline 2.00 & 43 & 34 \
\hline 2.50 & 40 & 30 \
\hline 3.00 & 35 & 44 \
\hline
\end{array}$$
-The above table gives the demand and supply schedules for cat food.If the price is $3.00 per pound of cat food,will there be a shortage,a surplus,or is this price the equilibrium price?
If there is a shortage,how much is the shortage?
If there is a surplus,how much is the surplus?
If $3.00 is the equilibrium price,what is the equilibrium quantity?

Accepted Answer

The answer of \[\begin{array} { | c | c |...

Question 3

The price of a good will fall if

Accepted Answer

A)  there is a surplus at the current price. 
B)  the current price is less than the equilibrium price. 
C)  the quantity demanded exceeds the quantity supplied. 
D)  the price of a complement in consumption falls.

Question 4

-The above figures show the market for oranges.Which figure shows the effect of great growing conditions that produce an above-average sized crop?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D

Question 5

A supply curve shows the relation between the quantity of a good supplied and

Accepted Answer

A)  income. Usually a supply curve has negative slope. 
B)  income. Usually a supply curve has positive slope. 
C)  the price of the good. Usually a supply curve has negative slope. 
D)  the price of the good. Usually a supply curve has positive slope.

Question 6

Suppose that the number of companies selling computer software decreases.How does this change affect the supply of computer software and the supply curve of computer software?

Accepted Answer

The answer of Suppose that the number of companies selling...

Question 7

The price of the steel used to produce car engines increases.How does this price hike affect the demand curve for cars?

Accepted Answer

A)  The demand curve shifts leftward. 
B)  The demand curve shifts rightward. 
C)  The demand curve does not shift. 
D)  There is not enough information to tell how the change shifts the demand curve for cars.

Question 8

Wants,as opposed to demands,

Accepted Answer

A)  are the unlimited desires of the consumer. 
B)  are the goods the consumer plans to acquire. 
C)  are the goods the consumer has acquired. 
D)  depend on the price.

Question 9

A change in which of the following alters buying plans for cars but does NOT shift the demand curve for cars?

Accepted Answer

A)  A 5 percent increase in people's income. 
B)  A 10 percent decrease in the price of car insurance. 
C)  A 20 percent increase in the price of a car. 
D)  An increased preference for walking rather than driving.

Question 10

Each point on the demand curve reflects

Accepted Answer

A)  all the wants of a given household. 
B)  the highest price consumers are willing and able to pay for that particular unit of a good. 
C)  the highest price sellers will accept for all units they are producing. 
D)  the lowest-cost technology available to produce a good.

Question 11

Which of the following is NOT one of the factors that influences the supply of a product?

Accepted Answer

A)  technology 
B)  income 
C)  number of suppliers 
D)  expected future prices

Question 12

-Which of the following shifts the supply curve for gasoline rightward?

Accepted Answer

A)  a situation in which the quantity 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)  an increase in the demand for gas-guzzling, sport utility vehicles

Question 13

When the price is less than the equilibrium price,

Accepted Answer

A)  there will be a shortage. 
B)  some consumers will be willing to pay a price higher than the prevailing price. 
C)  the price will be forced higher. 
D)  All of the above answers are correct.

Question 14

If the price of chocolate chip cookies falls,then

Accepted Answer

A)  the supply curve of chocolate chip cookies shifts rightward. 
B)  the supply curve of chocolate chip cookies shifts leftward. 
C)  there is a movement downward along the supply curve of chocolate chip cookies. 
D)  there is a movement upward along the supply curve of chocolate chip cookies.

Question 15

Beef and leather belts are complements in production.If people's concern about health shifts the demand curve for beef leftward,the result in the market for leather belts will be a

Accepted Answer

A)  lower equilibrium price for a leather belt because there is an increase in the supply of leather belts. 
B)  lower equilibrium price for a leather belt because there is a decrease in the supply of leather belts. 
C)  higher equilibrium price for a leather belt because there is a decrease in the supply of leather belts. 
D)  higher equilibrium price for a leather belt because there is an increase in the supply of leather belts.

Question 16

As the price of a pound of peanuts falls,the

Accepted Answer

A)  demand for peanuts increases. 
B)  demand for peanuts decreases. 
C)  quantity of peanuts demanded increases. 
D)  Both answers A and C are correct.

Question 17

When the price of an inferior good falls,the substitution effect leads to ________ in the quantity purchased and the income effect leads to ________ in the quantity purchased.

Accepted Answer

A)  an increase; an increase 
B)  an increase; a decrease 
C)  a decrease; an increase 
D)  a decrease; a decrease

Question 18

Homer changes jobs and his new job pays him a higher income.Before he changed jobs,Homer purchased 3 pounds of tuna and 2 pounds of chicken.After he changed jobs,Homer now purchases 2 pounds of tuna and 3 pounds of chicken.For Homer,

Accepted Answer

A)  tuna is a normal good and chicken is an inferior good. 
B)  tuna is an inferior good and chicken is a normal good. 
C)  both tuna and chicken are normal goods. 
D)  both tuna and chicken are inferior goods.

Question 19

If the price of a hot dog is $2 and the price of a hamburger is $4,then the

Accepted Answer

A)  relative price of a hot dog is 1/2 of a hamburger per hot dog. 
B)  money price of a hot dog is 2 hamburgers per hot dog. 
C)  relative price of a hamburger is 1/2 of a hot dog per hamburger. 
D)  money price of a hamburger is 2 hot dogs per hamburger.

Question 20

Suppose we observe that both the equilibrium price of film cameras and the equilibrium quantity of film cameras have fallen.Which of the following could be responsible for this?

Accepted Answer

A)  Consumers' preferences changed in favor of digital cameras. 
B)  Technological advances in film camera production. 
C)  Workers who make cameras received a pay raise. 
D)  The price of digital cameras increased.

Exam 3: Demand and Supply