Question 1

In the market for bananas, the price is $2.00 a bunch. An increase in the supply of bananas decreases the price of bananas and ________.

Accepted Answer

A)  the quantity supplied increases because the price falls 
B)  increases the demand for bananas 
C)  increases the quantity of bananas demanded 
D)  creates a shortage of bananas 
A)  the quantity supplied increases because the price falls 
B)  increases the demand for bananas 
C)  increases the quantity of bananas demanded 
D)  creates a shortage of bananas C

Question 2

To say that "supply increases" for any reason, means there is a

Accepted Answer

A)  movement rightward along a supply curve. 
B)  movement leftward along a supply curve. 
C)  shift rightward in the supply curve. 
D)  shift leftward in the supply curve. 
A)  movement rightward along a supply curve. 
B)  movement leftward along a supply curve. 
C)  shift rightward in the supply curve. 
D)  shift leftward in the supply curve. C

Question 3

Because of increasing marginal cost, most supply curves

Accepted Answer

A)  are horizontal. 
B)  are vertical. 
C)  have a negative slope. 
D)  have a positive slope. 
A)  are horizontal. 
B)  are vertical. 
C)  have a negative slope. 
D)  have a positive slope. D

Question 4

A rise in the price of a good causes producers to supply more of the good. This statement illustrates

Accepted Answer

A)  the law of supply. 
B)  the law of demand. 
C)  a change in supply. 
D)  the nature of an inferior good. 
A)  the law of supply. 
B)  the law of demand. 
C)  a change in supply. 
D)  the nature of an inferior good.

Question 5

In 2006, the base price of a Hummer SUV was about $30,000. By 2008, as gasoline prices increased,

Accepted Answer

A)  the demand curve for Hummers shifted leftward and Hummer prices decreased. 
B)  the demand curve for Hummers shifted rightward and Hummer prices increased. 
C)  there was a movement down along the Hummer demand curve. 
D)  there was a movement up along the Hummer supply curve. 
A)  the demand curve for Hummers shifted leftward and Hummer prices decreased. 
B)  the demand curve for Hummers shifted rightward and Hummer prices increased. 
C)  there was a movement down along the Hummer demand curve. 
D)  there was a movement up along the Hummer supply curve.

Question 6

The Market for Wapanzo Beans
Quantity Demanded Price Quantity Supplied
(millions of pounds (dollars per (millions of pounds
per year) pound) per year)  
-Refer to the table above. Suppose that in normal years demand is represented by Case 2 and supply is represented by Case B. If there is exceptionally good growing weather in the wapanzo bean growing region then supply will ________ and demand will ________.

Accepted Answer

A)  become case C; become case 1 
B)  become case C; stay at case 2 
C)  become case C; become case 3 
D)  stay at case B; become case 1 
A)  become case C; become case 1 
B)  become case C; stay at case 2 
C)  become case C; become case 3 
D)  stay at case B; become case 1

Question 7

If the money price of hats rises and no other prices change, the I. relative price of a hat rises.
II) opportunity cost of a hat rises.

Accepted Answer

A)  only I 
B)  both I and II 
C)  only II 
D)  neither I nor II 
A)  only I 
B)  both I and II 
C)  only II 
D)  neither I nor II

Question 8

A fall in the price of wheat fertilizer ________ the equilibrium price of wheat and ________ the equilibrium quantity of wheat.

Accepted Answer

A)  raise; increase 
B)  raise; decrease 
C)  lower; increase 
D)  lower; decrease 
A)  raise; increase 
B)  raise; decrease 
C)  lower; increase 
D)  lower; decrease

Question 9

An increase in the number of fast-food restaurants

Accepted Answer

A)  raises the price of fast-food meals. 
B)  increases the demand for fast-food meals. 
C)  increases the supply of fast-food meals. 
D)  increases the demand for substitutes for fast-food meals. 
A)  raises the price of fast-food meals. 
B)  increases the demand for fast-food meals. 
C)  increases the supply of fast-food meals. 
D)  increases the demand for substitutes for fast-food meals.

Question 10

Consider gardening books. What will happen to the market for these books as gardening becomes more popular and simultaneously printing costs increase?

Accepted Answer

A)  The price of gardening books definitely increases. 
B)  The quantity of gardening books definitely increases. 
C)  The price of gardening books might increase or decrease. 
D)  The quantity of gardening books definitely stays the same. 
A)  The price of gardening books definitely increases. 
B)  The quantity of gardening books definitely increases. 
C)  The price of gardening books might increase or decrease. 
D)  The quantity of gardening books definitely stays the same.

Question 11

An economist says: "The supply curve has two interpretations." What does the economist mean?

Accepted Answer

The first interpretation is that the sup

Question 12

-In the above figure, if D2 is the original demand curve for a normal good and income decreases, which price and quantity might result?

Accepted Answer

A)  point a, with price P2 and quantity Q2 
B)  point b, with price P1 and quantity Q1 
C)  point c, with price P3 and quantity Q3 
D)  point d, with price P1 and quantity Q3 
A)  point a, with price P2 and quantity Q2 
B)  point b, with price P1 and quantity Q1 
C)  point c, with price P3 and quantity Q3 
D)  point d, with price P1 and quantity Q3

Question 13

Cupcakes and granola bars are substitutes in consumption. The price of a granola bar increases so the demand for

Accepted Answer

A)  granola bars will increase, that is, the demand curve will shift rightward. 
B)  cupcakes will increase, that is, the demand curve will shift rightward. 
C)  granola bars will decrease, that is, the demand curve will shift leftward. 
D)  cupcakes will decrease, that is, the demand curve will shift leftward. 
A)  granola bars will increase, that is, the demand curve will shift rightward. 
B)  cupcakes will increase, that is, the demand curve will shift rightward. 
C)  granola bars will decrease, that is, the demand curve will shift leftward. 
D)  cupcakes will decrease, that is, the demand curve will shift leftward.

Question 14

-A market research team has come up with the demand and supply schedules for pizza in Cheeseboro. These schedules are given in the table above. Use these data to analyze the situation in the market for pizza.
a) Draw a figure showing the demand curve for pizza and the supply curve of pizza. What are the equilibrium price and quantity?
b) Suppose the price is $10. Describe the situation in the market and explain how the price of pizza adjusts. Now suppose the price is $6. Describe the situation in the market and explain how the price of pizza adjusts.
c) The market research report also includes a prediction about the effect on the market for pizza in Cheeseboro of a recent news published in Cheeseboro Herald. The Herald reported that pizza has been discovered to help prevent heart diseases. Unfortunately, your dog chewed up the report and all you can read about the prediction is "quantity... by 150 at each price." What does the prediction say? Use your graph to show the predicted effects on the market for pizza. What are the predicted equilibrium price and quantity? How will the market adjust?

Accepted Answer

@#IMG-DLM& a) See the figure above. The equilibriu

Question 15

Sweatshirts and tee-shirts are complements in consumption and the price of a sweatshirt increases. As a result, the demand for

Accepted Answer

A)  sweatshirts will increase, that is, the demand curve will shift rightward. 
B)  tee-shirts will increase, that is, the demand curve will shift rightward. 
C)  sweatshirts will decrease, that is, the demand curve will shift leftward. 
D)  tee-shirts will decrease, that is, the demand curve will shift leftward. 
A)  sweatshirts will increase, that is, the demand curve will shift rightward. 
B)  tee-shirts will increase, that is, the demand curve will shift rightward. 
C)  sweatshirts will decrease, that is, the demand curve will shift leftward. 
D)  tee-shirts will decrease, that is, the demand curve will shift leftward.

Question 16

Consider the market for broccoli. If the price of a pound of broccoli increases, what happens to the supply of broccoli?

Accepted Answer

A)  The supply of broccoli decreases. 
B)  The supply of broccoli increases. 
C)  There will be no change in the supply of broccoli, but instead there is an increase in the quantity supplied of broccoli. 
D)  There will be no change in the supply of broccoli, but instead there is a decrease in the quantity supplied of broccoli. 
A)  The supply of broccoli decreases. 
B)  The supply of broccoli increases. 
C)  There will be no change in the supply of broccoli, but instead there is an increase in the quantity supplied of broccoli. 
D)  There will be no change in the supply of broccoli, but instead there is a decrease in the quantity supplied of broccoli.

Question 17

The quantity supplied of a good or service is the amount that

Accepted Answer

A)  producers wish they could sell at a higher price. 
B)  is actually bought during a given time period at a given price. 
C)  people are willing to buy during a given time period at a given price. 
D)  producers plan to sell during a given time period at a given price. 
A)  producers wish they could sell at a higher price. 
B)  is actually bought during a given time period at a given price. 
C)  people are willing to buy during a given time period at a given price. 
D)  producers plan to sell during a given time period at a given price.

Question 18

Consumers expect that the price of a gallon of gasoline will rise next week. As a result,

Accepted Answer

A)  today's supply of gasoline increases. 
B)  today's demand for gasoline increases. 
C)  the price of a gallon of gasoline falls today. 
D)  next week's supply of gasoline decreases. 
A)  today's supply of gasoline increases. 
B)  today's demand for gasoline increases. 
C)  the price of a gallon of gasoline falls today. 
D)  next week's supply of gasoline decreases.

Question 19

If both the demand and supply increase, the equilibrium quantity ________ and the equilibrium price ________.

Accepted Answer

A)  increases; falls 
B)  decreases; might rise, fall, or not change 
C)  decreases; rises 
D)  increases; might rise, fall, or not change 
A)  increases; falls 
B)  decreases; might rise, fall, or not change 
C)  decreases; rises 
D)  increases; might rise, fall, or not change

Question 20

Which of the following lists has variables that all shift a good's demand curve?

Accepted Answer

A)  price of the good, preferences, prices of substitution goods, income 
B)  income, preferences, number of buyers, price of complementary good 
C)  expectation of future price, price of the good, number of buyers, income 
D)  Both answers A and B are correct. 
A)  price of the good, preferences, prices of substitution goods, income 
B)  income, preferences, number of buyers, price of complementary good 
C)  expectation of future price, price of the good, number of buyers, income 
D)  Both answers A and B are correct.

Exam 3: Demand and Supply

In the market for bananas, the price is $2.00 a bunch. An increase in the supply of bananas decreases the price of bananas and ________.

To say that "supply increases" for any reason, means there is a

Because of increasing marginal cost, most supply curves

A rise in the price of a good causes producers to supply more of the good. This statement illustrates

In 2006, the base price of a Hummer SUV was about $30,000. By 2008, as gasoline prices increased,

If the money price of hats rises and no other prices change, the I. relative price of a hat rises. II) opportunity cost of a hat rises.

A fall in the price of wheat fertilizer ________ the equilibrium price of wheat and ________ the equilibrium quantity of wheat.

An increase in the number of fast-food restaurants

Consider gardening books. What will happen to the market for these books as gardening becomes more popular and simultaneously printing costs increase?

An economist says: "The supply curve has two interpretations." What does the economist mean?

-In the above figure, if D2 is the original demand curve for a normal good and income decreases, which price and quantity might result?

Cupcakes and granola bars are substitutes in consumption. The price of a granola bar increases so the demand for

Sweatshirts and tee-shirts are complements in consumption and the price of a sweatshirt increases. As a result, the demand for

Consider the market for broccoli. If the price of a pound of broccoli increases, what happens to the supply of broccoli?

The quantity supplied of a good or service is the amount that

Consumers expect that the price of a gallon of gasoline will rise next week. As a result,

If both the demand and supply increase, the equilibrium quantity ________ and the equilibrium price ________.

Which of the following lists has variables that all shift a good's demand curve?

What Is Economics

The Economic Problem

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices and Public Goods

Externalities and the Environment

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Extension A: Review

Extension B: Review

Extension C: Review

Extension D: Review

Extension E: Review

Extension F: Review

Filters

A fall in the price of wheat fertilizer the equilibrium price of wheat and the equilibrium quantity of wheat.

-In the above figure, if D₂ is the original demand curve for a normal good and income decreases, which price and quantity might result?

If both the demand and supply increase, the equilibrium quantity and the equilibrium price .