Question 1

Table 3-1
 
-Refer to Table 3-1.The table above shows the demand schedules for loose-leaf tea of two individuals (Sunil and Mia)and the rest of the market.If the price of loose-leaf tea rises from $3 to $4,the market quantity demanded would

Accepted Answer

A) decrease by 32 lbs. 
B) increase by 64 lbs. 
C) increase by 32 lbs. 
D) decrease by 64 lbs.

Question 2

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 3

In a perfectly competitive market,there are ________ buyers and ________ sellers.

Accepted Answer

A) many;few 
B) few;many 
C) many;many 
D) few;few

Question 4

If an increase in income leads to in an increase in the demand for peanut butter,then peanut butter is

Accepted Answer

A) a neutral good. 
B) a normal good. 
C) a necessity. 
D) a complement.

Question 5

Indicate whether each of the following situations would shift the supply curve to the left,to the right,or not at all.
a.An increase in the number of firms in the market
b.An increase in the current price of the product
c.A decrease in productivity
d.An increase in the expected future price of a product
e.A decrease in the price of an input

Accepted Answer

The answer of Indicate whether each of the following situations...

Question 6

The market for tablet computers has grown rapidly over the past few years,due in part to the overwhelming success of the Apple iPad.Following the successful launch of the iPad in 2010,companies such as Toshiba,Samsung,Dell,and Amazon have all introduced products to compete with the iPad.The tablet computers introduced to compete with the iPad would be considered

Accepted Answer

A) complements to the iPad. 
B) substitutes for the iPad. 
C) inferior goods compared to the iPad. 
D) normal goods compared to the iPad.

Question 7

Which of the following would shift the supply curve for MP3 players to the right?

Accepted Answer

A) an increase in the price of a substitute in production 
B) an increase in consumer income (assuming that all MP3 players are normal goods) 
C) a decrease in the number of firms that produce MP3 players 
D) a decrease in the price of an input used to produce MP3 players

Question 8

Figure 3-2 
-Refer to Figure 3-2.An increase in the price of substitutes in production 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 9

If consumers believe the price of iPads will decrease in the future,this will cause the demand for iPads to decrease now.

Accepted Answer

A) True 
 B)False

Question 10

Figure 3-3 
-Refer to Figure 3-3.The figure above shows the supply and demand curves for two markets: the market for original Picasso paintings and the market for designer jeans.Which graph most likely represents which market?

Accepted Answer

A) Graph B represents the market for original Picasso paintings and Graph A represents the market for designer jeans. 
B) Graph A represents the market for original Picasso paintings and Graph B represents the market for designer jeans. 
C) Graph A represents both the market for original Picasso paintings and designer jeans. 
D) Graph B represents both the market for original Picasso paintings and designer jeans.

Question 11

If a firm expects that the price of its product will be higher in the future than it is today

Accepted Answer

A) the firm will go out of business. 
B) the firm has an incentive to increase supply now and decrease supply in the future. 
C) the firm has an incentive to decrease quantity supplied now and increase quantity supplied in the future. 
D) the firm has an incentive to decrease supply now and increase supply in the future.

Question 12

What is the ceteris paribus condition?

Accepted Answer

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

Question 13

Which of the following would cause a decrease in the supply of milk?

Accepted Answer

A) an increase in the price of cookies (assuming that milk and cookies are complements) 
B) a decrease in the price of milk 
C) an increase the price of a product that producers sell instead of milk 
D) an increase in the number of firms that produce milk

Question 14

Scarcity is defined as the situation that exists when the quantity demanded for a good is greater than the quantity supplied.

Accepted Answer

A) True 
 B)False

Question 15

Figure 3-7 
-Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for Fruitopia,a soft drink.Which panel describes what happens in the market for Fruitopia when the price of Snapple,a substitute product,decreases?

Accepted Answer

A) Panel (a) 
B) Panel (b) 
C) Panel (c) 
D) Panel (d)

Question 16

Figure 3-8 
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D1 and S1 (point A).If there is an increase in the wages of apple workers and an increase in the price of oranges,a substitute for apples,the equilibrium could move to which point?

Accepted Answer

A) none of the points shown 
B) B 
C) C 
D) E

Question 17

Which of the following will shift the demand curve for a good?

Accepted Answer

A) a change in the technology used to produce the good 
B) an increase in the price of the good 
C) a decrease in the price of a complementary good 
D) a decrease in the price of the good

Question 18

Figure 3-1 
-Refer to Figure 3-1.If the product represented is an inferior good,an increase in income 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 19

If the price of grapefruit rises,the substitution effect due to the price change will cause

Accepted Answer

A) a decrease in the demand for grapefruit. 
B) a decrease in the demand for oranges,a substitute for grapefruit. 
C) a decrease in the quantity demanded of grapefruit. 
D) a decrease in the quantity supplied of grapefruit.

Question 20

In June,buyers of titanium expect that the price of titanium will fall in July.What happens in the titanium market in June,holding everything else constant?

Accepted Answer

A) The demand curve shifts to the right. 
B) The quantity demanded increases. 
C) The quantity demanded decreases 
D) The demand curve shifts to the left.

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

Table 3-1 -Refer to Table 3-1.The table above shows the demand schedules for loose-leaf tea of two individuals (Sunil and Mia) and the rest of the market.If the price of loose-leaf tea rises from $3 to $4,the market quantity demanded would

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?

In a perfectly competitive market,there are buyers and sellers.