Question 1

Crude oil is a very important factor of production used in the production of gasoline.If the price of crude oil rises, we would expect the

Accepted Answer

A)  equilibrium quantity of gasoline to rise due to an increase in demand.
B)  equilibrium quantity of gasoline to fall due to an increase in supply.
C)  price of gasoline to rise due to an increase in demand.
D)  price of gasoline to fall due to an increase in demand.
E)  price of gasoline to rise due to a decrease in supply.F) C) and D)
G) D) and E)

Question 2

If the market for Twinkies is in equilibrium, then

Accepted Answer

A)  the quantity supplied equals the quantity demanded.
B)  producers would like to sell less at the current price.
C)  Twinkies must be a normal good.
D)  consumers would like to buy less at the current price.
E)  the supply of Twinkies will never increase and the demand for Twinkies will never decrease.F) B) and E)
G) C) and D)

Question 3

Consider the market for smartphones.Suppose the price of a smartphone falls.Explain the effect of this event on the quantity of smartphones demanded and on the demand for smartphones.

Accepted Answer

A)  The quantity of smartphones demanded is unchanged and the demand for smartphones increases.
B)  The quantity of smartphones demanded is unchanged and the demand for smartphones decreases.
C)  The quantity of smartphones demanded increases and the demand for smartphones also increases.
D)  The quantity of smartphones demanded decreases and the demand for smartphones is unchanged.
E)  The quantity of smartphones demanded increases and the demand for smartphones is unchanged.F) All of the above
G) C) and E)

Question 4

Some producers are chatting.Which one of the following quotations refers to a rightward shift of the supply curve?

Accepted Answer

A)  "Competitors are leaving the industry."
B)  "Our new, sophisticated equipment will enable us to undercut our competitors."
C)  "Raw material prices have sky- rocketed; we will have to pass the cost on to our customers."
D)  "Wage increases have forced us to raise our prices."
E)  "We anticipate a big increase in demand.Our product price should rise, so we are planning for an increase in output."F) D) and E)
G) A) and E)

Question 5

Use the figure below to answer the following questions.
  Figure 3.5.2
Original equilibrium at 1.
-Refer to Figure 3.5.2, which represents the market for beans.If the price of peas, a substitute for beans and a substitute in production, rises, what is the new beans equilibrium, ceteris paribus?

Accepted Answer

A)  2
B)  3
C)  9
D)  4
E)  7F) A) and B)
G) C) and D)

Question 6

Some producers are chatting.Which one of the following quotations refers to a leftward shift of the supply curve?

Accepted Answer

A)  "Wage increases have forced us to raise our prices."
B)  "Our new, sophisticated equipment will enable us to undercut our competitors."
C)  "Raw material prices have sky- rocketed; we will have to pass the cost on to our customers."
D)  "We anticipate a big increase in demand.Our product price should rise, so we are planning for an increase in output."
E)  Both A and CF) A) and B)
G) A) and C)

Question 7

How many sides does a market have?

Accepted Answer

A)  two sides - buyers and sellers
B)  one side - buyers
C)  one side - sellers
D)  two sides - domestic and foreign
E)  three sides - buyers, sellers, and the governmentF) A) and B)
G) B) and C)

Question 8

Suppose the price of a football is $40.00 and the price of a basketball is $20.00.The _______ of a football is _______

Accepted Answer

A)  relative price; 2 basketballs per football
B)  relative price; $10
C)  opportunity cost; $20.00
D)  opportunity cost; $2.00
E)  relative price; 1/2 basketball per footballF) All of the above
G) A) and E)

Question 9

The income effect influences food purchases because when the price of a certain food rises, other things remaining the same, _______ Consumers _______

Accepted Answer

A)  demand for that food increases; believe that the price may rise even further so they buy more now
B)  its relative price rises; purchase less of all foods because food is an inferior good
C)  demand for that food decreases; buy less of the food that has experienced the price rise and more of other foods
D)  the price rises relative to income; cannot afford to buy all the things they previously bought, so they normally buy less of the food that has experienced the price rise
E)  demand for that food increases; buy more food because food is a normal goodF) A) and D)
G) D) and E)

Question 10

All cereal producers have decided to add a new ingredient, the "crunch enhancer," to cereals.Crunch enhancer keeps cereals crisper longer in milk and, as a result, consumers decide they like cereal more than before.What happens to the supply and demand curves for cereal now that it costs more to produce and consumers like it better?

Accepted Answer

A)  The supply curve shifts rightward and the demand curve remains unchanged.
B)  The supply curve shifts leftward and the demand curve remains unchanged.
C)  The supply and demand curves both shift rightward.
D)  The supply curve shifts leftward and the demand curve shifts rightward.
E)  Neither curve changes but a movement occurs up along the demand curve and a movement occurs up along the supply curve.F) C) and E)
G) A) and B)

Question 11

Which of the following "other things" are not held constant along a demand curve?

Accepted Answer

A)  preferences
B)  prices of related goods
C)  income
D)  the price of the good itself
E)  expected future income and creditF) A) and E)
G) A) and B)

Question 12

When a shortage occurs, there is a tendency for the

Accepted Answer

A)  quantity supplied to decrease.
B)  price to remain unchanged.
C)  price to fall.
D)  quantity demanded to increase.
E)  price to rise.F) B) and E)
G) A) and B)

Question 13

If A is an inferior good and consumer income rises, the demand for A

Accepted Answer

A)  decreases and the equilibrium price falls, but the equilibrium quantity increases.
B)  increases and the equilibrium price rises, but the equilibrium quantity decreases.
C)  decreases, and the equilibrium price and the equilibrium quantity decrease.
D)  decreases, the equilibrium price rises, and the equilibrium quantity decreases.
E)  increases, and the equilibrium price and the equilibrium quantity increase.F) C) and E)
G) A) and D)

Question 14

Use the table below to answer the following questions.
Table 3.5.3 
-Refer to Table 3.5.3.Suppose that the price of a designer sport t- shirt is $6.The market has _______ leading to _______ .

Accepted Answer

A)  an equilibrium; no change in the price
B)  a surplus; a rise in the price
C)  a shortage; a fall in the price
D)  a shortage; a rise in the price
E)  a surplus; a fall in the priceF) C) and D)
G) None of the above

Question 15

Use the table below to answer the following questions.
Price dollars per unit) 
Table 3.4.1
Quantity Demanded
  Quantity Supplied units) 
-Refer to Table 3.4.1.A shortage occurs if

Accepted Answer

A)  the price is $4 a unit.
B)  the price is $7 a unit.
C)  the price is $5 a unit.
D)  the price is below $4 a unit.
E)  the price is $6 a unit.F) B) and D)
G) D) and E)

Question 16

Which market is an example of a market for factors of production?

Accepted Answer

A)  furniture market
B)  foreign exchange market
C)  automobile market
D)  computer programmer market
E)  apple marketF) D) and E)
G) A) and B)

Question 17

If demand decreases and supply increases, then the

Accepted Answer

A)  effect on both equilibrium price and quantity is unknown.
B)  equilibrium price rises, but the effect on the equilibrium quantity is unknown.
C)  equilibrium quantity decreases, but the effect on the equilibrium price is unknown.
D)  equilibrium quantity increases, but the effect on the equilibrium price is unknown.
E)  equilibrium price falls, but the effect on the equilibrium quantity is unknown.F) A) and B)
G) A) and C)

Question 18

A decrease in the quantity supplied is shown by a

Accepted Answer

A)  rightward shift of the demand curve.
B)  rightward shift of the supply curve.
C)  movement up along the supply curve.
D)  movement down along the supply curve.
E)  leftward shift of the supply curve.F) B) and C)
G) B) and D)

Question 19

Which one of the following would lead to an increase in the demand for hamburgers?

Accepted Answer

A)  a rise in the price of French fries, a complement of hamburgers
B)  a decrease in population
C)  a news report that hamburgers can cause skin diseases
D)  a new fad hamburger diet
E)  a decrease in consumer income if hamburgers are a normal goodF) A) and D)
G) A) and B)

Question 20

A rise in the price of a good

Accepted Answer

A)  decreases the supply of the good.
B)  creates a movement down along the demand curve.
C)  increases the supply of the good.
D)  creates a movement up along the supply curve.
E)  decreases demand for the good.F) A) and E)
G) A) and B)

Exam 3: Demand and Supply

Consider the market for smartphones.Suppose the price of a smartphone falls.Explain the effect of this event on the quantity of smartphones demanded and on the demand for smartphones.

Correct Answer
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How many sides does a market have?

Correct Answer
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If the market for Twinkies is in equilibrium, then

Correct Answer
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If demand decreases and supply increases, then the

Correct Answer
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Use the table below to answer the following questions. Price dollars per unit) Table 3.4.1 Quantity Demanded Quantity Supplied units) -Refer to Table 3.4.1.A shortage occurs if

Correct Answer
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Which one of the following would lead to an increase in the demand for hamburgers?

Correct Answer
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Use the table below to answer the following questions. Table 3.5.3 -Refer to Table 3.5.3.Suppose that the price of a designer sport t- shirt is $6.The market has _ leading to _ .

Correct Answer
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Correct Answer
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Crude oil is a very important factor of production used in the production of gasoline.If the price of crude oil rises, we would expect the

Correct Answer
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Some producers are chatting.Which one of the following quotations refers to a rightward shift of the supply curve?

Correct Answer
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When a shortage occurs, there is a tendency for the

Correct Answer
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A decrease in the quantity supplied is shown by a

Correct Answer
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Use the figure below to answer the following questions. Figure 3.5.2 Original equilibrium at 1. -Refer to Figure 3.5.2, which represents the market for beans.If the price of peas, a substitute for beans and a substitute in production, rises, what is the new beans equilibrium, ceteris paribus?

Correct Answer
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Which of the following "other things" are not held constant along a demand curve?

Correct Answer
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Which market is an example of a market for factors of production?

Correct Answer
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A rise in the price of a good

Correct Answer
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Suppose the price of a football is $40.00 and the price of a basketball is $20.00.The _ of a football is _

Correct Answer
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The income effect influences food purchases because when the price of a certain food rises, other things remaining the same, _ Consumers _

Correct Answer
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Some producers are chatting.Which one of the following quotations refers to a leftward shift of the supply curve?

Correct Answer
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If A is an inferior good and consumer income rises, the demand for A

Correct Answer
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Exam 3: Demand and Supply

Consider the market for smartphones.Suppose the price of a smartphone falls.Explain the effect of this event on the quantity of smartphones demanded and on the demand for smartphones.

Correct AnswerverifiedShow Answer

How many sides does a market have?

Correct AnswerverifiedShow Answer

If the market for Twinkies is in equilibrium, then

Correct AnswerverifiedShow Answer

If demand decreases and supply increases, then the

Correct AnswerverifiedShow Answer

Use the table below to answer the following questions. Price dollars per unit) Table 3.4.1 Quantity Demanded Quantity Supplied units) -Refer to Table 3.4.1.A shortage occurs if

Correct AnswerverifiedShow Answer

Which one of the following would lead to an increase in the demand for hamburgers?

Correct AnswerverifiedShow Answer

Use the table below to answer the following questions. Table 3.5.3 -Refer to Table 3.5.3.Suppose that the price of a designer sport t- shirt is $6.The market has _______ leading to _______ .

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Crude oil is a very important factor of production used in the production of gasoline.If the price of crude oil rises, we would expect the

Correct AnswerverifiedShow Answer

Some producers are chatting.Which one of the following quotations refers to a rightward shift of the supply curve?

Correct AnswerverifiedShow Answer

When a shortage occurs, there is a tendency for the

Correct AnswerverifiedShow Answer

A decrease in the quantity supplied is shown by a

Correct AnswerverifiedShow Answer

Use the figure below to answer the following questions. Figure 3.5.2 Original equilibrium at 1. -Refer to Figure 3.5.2, which represents the market for beans.If the price of peas, a substitute for beans and a substitute in production, rises, what is the new beans equilibrium, ceteris paribus?

Correct AnswerverifiedShow Answer

Which of the following "other things" are not held constant along a demand curve?

Correct AnswerverifiedShow Answer

Which market is an example of a market for factors of production?

Correct AnswerverifiedShow Answer

A rise in the price of a good

Correct AnswerverifiedShow Answer

Suppose the price of a football is $40.00 and the price of a basketball is $20.00.The _______ of a football is _______

Correct AnswerverifiedShow Answer

The income effect influences food purchases because when the price of a certain food rises, other things remaining the same, _______ Consumers _______

Correct AnswerverifiedShow Answer

Some producers are chatting.Which one of the following quotations refers to a leftward shift of the supply curve?

Correct AnswerverifiedShow Answer

If A is an inferior good and consumer income rises, the demand for A

Correct AnswerverifiedShow Answer

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Use the table below to answer the following questions. Table 3.5.3 -Refer to Table 3.5.3.Suppose that the price of a designer sport t- shirt is $6.The market has _ leading to _ .

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Suppose the price of a football is $40.00 and the price of a basketball is $20.00.The _ of a football is _

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The income effect influences food purchases because when the price of a certain food rises, other things remaining the same, _ Consumers _

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