Question 1

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

Accepted Answer

A) a decrease in the price of materials used to make CDs 
B) a rise in the cost of labor used to make CDs 
C) an increase in the price of audio cassettes 
D) a decrease in the number of suppliers 
E) an increase in the price of CDs 
A) a decrease in the price of materials used to make CDs 
B) a rise in the cost of labor used to make CDs 
C) an increase in the price of audio cassettes 
D) a decrease in the number of suppliers 
E) an increase in the price of CDs A

Question 2

Which of the following will not shift the demand curve for movie tickets?

Accepted Answer

A) a change in the cost of babysitting services 
B) a change in the price of movie tickets 
C) a change in the quality of television programs 
D) a change in the income of movie-goers 
E) a change in the number of consumers 
A) a change in the cost of babysitting services 
B) a change in the price of movie tickets 
C) a change in the quality of television programs 
D) a change in the income of movie-goers 
E) a change in the number of consumers B

Question 3

Exhibit 4-1   Consider Exhibit 4-1.Which of the following best represents a decrease in demand?

Accepted Answer

A) the movement from A to D 
B) the movement from C to E 
C) the movement from A to B 
D) the movement from F to E 
E) the movement from D to B 
A) the movement from A to D 
B) the movement from C to E 
C) the movement from A to B 
D) the movement from F to E 
E) the movement from D to B D

Question 4

A price ceiling set below the equilibrium price will result in a shortage.

Accepted Answer

A) True 
 B)False

Question 5

If people believe that prices are going to be higher in the future then they are today, they will

Accepted Answer

A) wait until the future to purchase the things they wand 
B) decrease their demand now 
C) increase their demand now 
D) increase their supply now 
E) save more today so they have the income to buy more in the future 
A) wait until the future to purchase the things they wand 
B) decrease their demand now 
C) increase their demand now 
D) increase their supply now 
E) save more today so they have the income to buy more in the future

Question 6

Exhibit 4-1   Consider Exhibit 4-1.Which of the following best represents an decrease in demand?

Accepted Answer

A) the movement from D to C 
B) the movement from C to E 
C) the movement from A to B 
D) the movement from F to E 
E) the movement from D to B 
A) the movement from D to C 
B) the movement from C to E 
C) the movement from A to B 
D) the movement from F to E 
E) the movement from D to B

Question 7

Which of the following will cause the demand curve for gasoline to shift leftward?

Accepted Answer

A) a decrease in the price of gasoline 
B) an increase in the price of gasoline 
C) a leftward shift of the supply of gasoline 
D) a rightward shift of the supply of cars 
E) a decrease in the price of bicycles 
A) a decrease in the price of gasoline 
B) an increase in the price of gasoline 
C) a leftward shift of the supply of gasoline 
D) a rightward shift of the supply of cars 
E) a decrease in the price of bicycles

Question 8

Movements along a demand curve are called changes in

Accepted Answer

A) demand 
B) opportunity costs 
C) quantity demanded 
D) the substitution effect 
E) preferences 
A) demand 
B) opportunity costs 
C) quantity demanded 
D) the substitution effect 
E) preferences

Question 9

If the price of gasoline (a normal good)decreases, other things constant,

Accepted Answer

A) the demand for gasoline increases 
B) the demand for gasoline decreases 
C) the quantity demanded of gasoline increases 
D) the quantity demanded of gasoline decreases 
E) neither the demand for gasoline nor the quantity demanded of gasoline changes because everything is assumed constant along a demand curve 
A) the demand for gasoline increases 
B) the demand for gasoline decreases 
C) the quantity demanded of gasoline increases 
D) the quantity demanded of gasoline decreases 
E) neither the demand for gasoline nor the quantity demanded of gasoline changes because everything is assumed constant along a demand curve

Question 10

Studies show that the supply curve for oranges has shifted.Which of the following could not explain the shift of the supply curve?

Accepted Answer

A) Weather conditions have changed. 
B) The price of fertilizer has changed. 
C) The wage paid to orange pickers has changed. 
D) The price of oranges has changed. 
E) The demand for grapefruit has changed. 
A) Weather conditions have changed. 
B) The price of fertilizer has changed. 
C) The wage paid to orange pickers has changed. 
D) The price of oranges has changed. 
E) The demand for grapefruit has changed.

Question 11

If the market for beef cattle was initially in equilibrium, an increase in the price of the feed grains used to fatten cattle would cause

Accepted Answer

A) the demand for beef cattle to increase, driving the price of beef upward 
B) the supply of beef cattle to decline, driving the price of beef upward in the long run 
C) the supply of beef to increase, placing downward pressure on the price of beef in the long run 
D) both supply and demand to fall, leaving the price of beef virtually unchanged 
E) the supply of beef to increase, driving the price of beef down and increasing demand 
A) the demand for beef cattle to increase, driving the price of beef upward 
B) the supply of beef cattle to decline, driving the price of beef upward in the long run 
C) the supply of beef to increase, placing downward pressure on the price of beef in the long run 
D) both supply and demand to fall, leaving the price of beef virtually unchanged 
E) the supply of beef to increase, driving the price of beef down and increasing demand

Question 12

If there is a shortage in the market for automobiles, then

Accepted Answer

A) producers' inventories will rise 
B) the price should begin to rise 
C) the demand curve will shift to restore equilibrium in the market 
D) the supply curve will shift to restore equilibrium in the market 
E) the price is expected to fall 
A) producers' inventories will rise 
B) the price should begin to rise 
C) the demand curve will shift to restore equilibrium in the market 
D) the supply curve will shift to restore equilibrium in the market 
E) the price is expected to fall

Question 13

If a decrease in the price of a good causes a rightward shift of the demand curve for that good, then it is an inferior good.

Accepted Answer

A) True 
 B)False

Question 14

Assume that black beans and rice are staples in the diet of one particular family.How could you tell if these goods were complements, substitutes, or unrelated goods?

Accepted Answer

A) If the price of black beans rose and the consumption of rice remained the same, they would be substitutes. 
B) If the price of black beans rose and the consumption of rice increased, they would be substitutes. 
C) If the price of black beans rose and the consumption of rice decreased, they would be substitutes. 
D) If the price of black beans rose and the consumption of both goods remained the same, they would be complements. 
E) There is no way to determine whether these goods are complements, substitutes, or unrelated goods. 
A) If the price of black beans rose and the consumption of rice remained the same, they would be substitutes. 
B) If the price of black beans rose and the consumption of rice increased, they would be substitutes. 
C) If the price of black beans rose and the consumption of rice decreased, they would be substitutes. 
D) If the price of black beans rose and the consumption of both goods remained the same, they would be complements. 
E) There is no way to determine whether these goods are complements, substitutes, or unrelated goods.

Question 15

An increase in demand will cause a(n)

Accepted Answer

A) increase in supply 
B) decrease in supply 
C) decrease in quantity supplied 
D) increase in quantity supplied 
E) decrease in equilibrium price 
A) increase in supply 
B) decrease in supply 
C) decrease in quantity supplied 
D) increase in quantity supplied 
E) decrease in equilibrium price

Question 16

Studies show that the demand curve for peas has shifted.Which of the following explanations would you reject first?

Accepted Answer

A) The price of string beans has changed. 
B) The demand for corn has changed. 
C) The demand for string beans has changed. 
D) The income of consumers has changed. 
E) The price of peas has changed. 
A) The price of string beans has changed. 
B) The demand for corn has changed. 
C) The demand for string beans has changed. 
D) The income of consumers has changed. 
E) The price of peas has changed.

Question 17

Exhibit 4-1   Consider Exhibit 4-1.Which of the following best represents a decrease in quantity demanded?

Accepted Answer

A) the movement from A to D 
B) the movement from C to E 
C) the movement from A to B 
D) the movement from F to E 
E) the movement from B to D 
A) the movement from A to D 
B) the movement from C to E 
C) the movement from A to B 
D) the movement from F to E 
E) the movement from B to D

Question 18

A surplus occurs whenever

Accepted Answer

A) current price is greater than equilibrium price 
B) quantity supplied exceeds quantity demanded at the equilibrium price 
C) quantity demanded is greater than quantity supplied 
D) the problem of scarcity of a good is solved 
E) some buyers would be willing and able to pay even more for it than they have to at equilibrium 
A) current price is greater than equilibrium price 
B) quantity supplied exceeds quantity demanded at the equilibrium price 
C) quantity demanded is greater than quantity supplied 
D) the problem of scarcity of a good is solved 
E) some buyers would be willing and able to pay even more for it than they have to at equilibrium

Question 19

Exhibit 4-1   Consider Exhibit 4-1 which shows 3 demand curves for corn flakes.Which of the following would be most likely to shift the demand curve from D0 to D1?

Accepted Answer

A) a report that eating corn flakes reduces the risk of cancer 
B) an increase in consumer incomes if corn flakes is an inferior good 
C) a decrease in the price of oatmeal which many consumers consider to be a substitute for corn flakes 
D) an increase in the price milk which many consumers consider to be complement for corn flakes 
E) a decrease in the number of consumers 
A) a report that eating corn flakes reduces the risk of cancer 
B) an increase in consumer incomes if corn flakes is an inferior good 
C) a decrease in the price of oatmeal which many consumers consider to be a substitute for corn flakes 
D) an increase in the price milk which many consumers consider to be complement for corn flakes 
E) a decrease in the number of consumers

Question 20

A decrease in the supply of chocolate chips would usually result in a

Accepted Answer

A) higher equilibrium price and a lower equilibrium quantity 
B) lower equilibrium price and a lower equilibrium quantity 
C) lower equilibrium price and a higher equilibrium quantity 
D) higher equilibrium price and a higher equilibrium quantity 
E) decrease in the demand for chocolate chips 
A) higher equilibrium price and a lower equilibrium quantity 
B) lower equilibrium price and a lower equilibrium quantity 
C) lower equilibrium price and a higher equilibrium quantity 
D) higher equilibrium price and a higher equilibrium quantity 
E) decrease in the demand for chocolate chips

Exam 4: Demand, Supply, and Markets

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

Which of the following will not shift the demand curve for movie tickets?

Exhibit 4-1 Consider Exhibit 4-1.Which of the following best represents a decrease in demand?

A price ceiling set below the equilibrium price will result in a shortage.

If people believe that prices are going to be higher in the future then they are today, they will

Exhibit 4-1 Consider Exhibit 4-1.Which of the following best represents an decrease in demand?

Which of the following will cause the demand curve for gasoline to shift leftward?

Movements along a demand curve are called changes in

If the price of gasoline (a normal good)decreases, other things constant,

Studies show that the supply curve for oranges has shifted.Which of the following could not explain the shift of the supply curve?

If the market for beef cattle was initially in equilibrium, an increase in the price of the feed grains used to fatten cattle would cause

If there is a shortage in the market for automobiles, then

If a decrease in the price of a good causes a rightward shift of the demand curve for that good, then it is an inferior good.

Assume that black beans and rice are staples in the diet of one particular family.How could you tell if these goods were complements, substitutes, or unrelated goods?

An increase in demand will cause a(n)

Studies show that the demand curve for peas has shifted.Which of the following explanations would you reject first?

Exhibit 4-1 Consider Exhibit 4-1.Which of the following best represents a decrease in quantity demanded?

A surplus occurs whenever

Exhibit 4-1 Consider Exhibit 4-1 which shows 3 demand curves for corn flakes.Which of the following would be most likely to shift the demand curve from D0 to D1?

A decrease in the supply of chocolate chips would usually result in a

The Art and Science of Economic Analysis

Appendix--Understanding Graphs

Economic Tools and Economics Systems

Economic Decision Makers

Elasticity of Demand and Supply

Appendix--Price Elasticity and Tax Incidence

Consumer Choice and Demand

Appendix--Indifference Curves and Utility Maximization

Production and Cost in the Firm

A--Perfect Competition

B--Perfect Competition

A--Monopoly

B--Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Economic Development

Filters

Exhibit 4-1 Consider Exhibit 4-1 which shows 3 demand curves for corn flakes.Which of the following would be most likely to shift the demand curve from D₀ to D₁?