Question 1

If the number of suppliers of good Y increases,then

Accepted Answer

A) a movement up along the supply curve of good Y will occur. 
B) a movement down along the supply curve of good Y will occur. 
C) the supply curve of good Y shifts rightward. 
D) the supply curve of good Y shifts leftward. 
E) the supply curve of good Y will remain unchanged. 
A) a movement up along the supply curve of good Y will occur. 
B) a movement down along the supply curve of good Y will occur. 
C) the supply curve of good Y shifts rightward. 
D) the supply curve of good Y shifts leftward. 
E) the supply curve of good Y will remain unchanged. C

Question 2

Which one of the following correctly describes how price adjustment eliminates a shortage?

Accepted Answer

A) As the price rises,the quantity demanded decreases and the quantity supplied increases. 
B) As the price rises,the quantity demanded increases and the quantity supplied decreases. 
C) As the price falls,the quantity demanded decreases and the quantity supplied increases. 
D) As the price falls,the quantity demanded increases and the quantity supplied decreases. 
E) As the price falls,the quantity demanded increases and the quantity supplied increases. 
A) As the price rises,the quantity demanded decreases and the quantity supplied increases. 
B) As the price rises,the quantity demanded increases and the quantity supplied decreases. 
C) As the price falls,the quantity demanded decreases and the quantity supplied increases. 
D) As the price falls,the quantity demanded increases and the quantity supplied decreases. 
E) As the price falls,the quantity demanded increases and the quantity supplied increases. A

Question 3

Which of the following will definitely result in an increase in the equilibrium price?

Accepted Answer

A) an increase in both demand and supply 
B) a decrease in both demand and supply 
C) an increase in demand combined with a decrease in supply 
D) a decrease in demand combined with an increase in supply 
E) an increase in supply combined with a decrease in demand 
A) an increase in both demand and supply 
B) a decrease in both demand and supply 
C) an increase in demand combined with a decrease in supply 
D) a decrease in demand combined with an increase in supply 
E) an increase in supply combined with a decrease in demand C

Question 4

If demand increases and supply decreases,then the

Accepted Answer

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

Question 5

Suppose the price of a football is $20.00 and the price of a basketball is $10.00.The ________ of a football is ________.

Accepted Answer

A) relative price;2 basketballs per football 
B) relative price;1/2 basketball per football 
C) opportunity cost;$15.00 
D) opportunity cost;$10.00 
E) relative price;$10 
A) relative price;2 basketballs per football 
B) relative price;1/2 basketball per football 
C) opportunity cost;$15.00 
D) opportunity cost;$10.00 
E) relative price;$10

Question 6

An increase in the price of ground beef

Accepted Answer

A) increases the demand for chicken,a substitute for ground beef. 
B) increases the demand for hamburger buns,a complement of ground beef. 
C) increases the quantity demanded of ground beef. 
D) decreases the quantity demanded of ground beef. 
E) both A and D. 
A) increases the demand for chicken,a substitute for ground beef. 
B) increases the demand for hamburger buns,a complement of ground beef. 
C) increases the quantity demanded of ground beef. 
D) decreases the quantity demanded of ground beef. 
E) both A and D.

Question 7

The fact that a fall in the price of a good results in a decrease in the quantity of the good supplied 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. 
E) technological improvement. 
A) the law of supply. 
B) the law of demand. 
C) a change in supply. 
D) the nature of an inferior good. 
E) technological improvement.

Question 8

Use the figure below to answer the following questions.
   Figure 3.5.1
-Initially,the demand curve for good A is D2 in Figure 3.5.1.If income increases and A is a normal good,we would expect to see a movement from point A to point

Accepted Answer

A) B. 
B) C. 
C) D. 
D) E. 
E) C and back to point A. 
A) B. 
B) C. 
C) D. 
D) E. 
E) C and back to point A.

Question 9

If we observe a fall in the equilibrium price of good A,we know that either the demand for A has

Accepted Answer

A) increased or the supply of A has decreased or both. 
B) increased or the supply of A has increased or both. 
C) decreased or the supply of A has increased or both. 
D) decreased or the supply of A has decreased or both. 
E) none of the above. 
A) increased or the supply of A has decreased or both. 
B) increased or the supply of A has increased or both. 
C) decreased or the supply of A has increased or both. 
D) decreased or the supply of A has decreased or both. 
E) none of the above.

Question 10

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 rises,what is the new beans equilibrium,ceteris paribus?

Accepted Answer

A) 8 
B) 3 
C) 9 
D) 5 
E) 6 
A) 8 
B) 3 
C) 9 
D) 5 
E) 6

Question 11

Refer to the table below for the following question.
Table 3.4.2
 $$\begin{array} { c c c } 
\hline\begin{array} { c } 
\text { Price } \
\text { (dollarsper bottle) }
\end{array} & \begin{array} { c } 
\text { Quantity demanded } \
\text { (bottles per week) }
\end{array} & \begin{array} { c } 
\text { Quantity supplied } \
\text { (bottlesper week) }
\end{array} \
\hline 2 & 180 & 60 \
6 & 140 & 100 \
10 & 100 & 140 \
14 & 60 & 180 \
18 & 20 & 220 \
\hline
\end{array}$$
-Refer to Table 3.4.2.The table shows the demand and supply schedules for shampoo.If the price is $6 a bottle,there is a ________ of shampoo.So the price of a bottle of shampoo ________,the quantity demanded ________ and the quantity supplied ________.The market moves to equilibrium.

Accepted Answer

A) shortage;rises;decreases;increases 
B) shortage;falls;decreases;increases 
C) surplus;rises;increases;decreases 
D) surplus;falls;increases;decreases 
E) shortage;rises;increases;decreases 
A) shortage;rises;decreases;increases 
B) shortage;falls;decreases;increases 
C) surplus;rises;increases;decreases 
D) surplus;falls;increases;decreases 
E) shortage;rises;increases;decreases

Question 12

Use the figure below to answer the following questions.
Table 3.5.2
Demand and Supply Schedules for Cups of Coffee each day at CoolU
 $$\begin{array} { c c c } 
\hline\begin{array} { c } 
\text { Price } \
\text { (dollarsper cup) }
\end{array} & \begin{array} { c } 
\text { Quantity Demanded } \
\text { (cups of coffeeper } \
\text { day) }
\end{array} & \begin{array} { c } 
\text { Quantity Supplied } \
\text { (cups of coffeeper } \
\text { day) }
\end{array} \
\hline 0.70 & 1,200 & 0 \
0.80 & 1,100 & 200 \
0.90 & 1,000 & 400 \
1.00 & 900 & 600 \
1.10 & 800 & 800 \
1.20 & 700 & 1,000 \
1.30 & 600 & 1,200 \
1.40 & 500 & 1,400 \
1.50 & 400 & 1,600 \
\hline
\end{array}$$
-Refer to Table 3.5.2.Professor Hyper publishes a new study,showing that coffee raises the test performance of students.Students double their demand for coffee.This change would be represented as a

Accepted Answer

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

Question 13

"As domestic car prices have increased,consumers have found foreign cars to be a better bargain.Consequently,domestic car sales have fallen and foreign car sales have risen." Based on this information alone,there has been a

Accepted Answer

A) shift in the demand curves for both domestic and foreign cars. 
B) shift in the supply curves for both domestic and foreign cars. 
C) movement along the demand curves for both domestic and foreign cars. 
D) movement along the demand curve for domestic cars and a shift of the demand curve for foreign cars. 
E) shift of the demand curve for domestic cars and a movement along the demand curve for foreign cars. 
A) shift in the demand curves for both domestic and foreign cars. 
B) shift in the supply curves for both domestic and foreign cars. 
C) movement along the demand curves for both domestic and foreign cars. 
D) movement along the demand curve for domestic cars and a shift of the demand curve for foreign cars. 
E) shift of the demand curve for domestic cars and a movement along the demand curve for foreign cars.

Question 14

A technological improvement in the production of good A

Accepted Answer

A) decreases the supply of A. 
B) increases the demand for A. 
C) decreases the equilibrium price of A and decreases the equilibrium quantity. 
D) decreases the quantity demanded of A. 
E) increases the supply of A. 
A) decreases the supply of A. 
B) increases the demand for A. 
C) decreases the equilibrium price of A and decreases the equilibrium quantity. 
D) decreases the quantity demanded of A. 
E) increases the supply of A.

Question 15

The y- axis intercept of the supply curve is 40 and the slope is 6.The equation of the supply curve is ________.

Accepted Answer

A) P = 3 + 40QS 
B) P = 40 + 6QS 
C) P = 40 - 6QS 
D) QS = 40 + 6P 
E) QS = 40 - 6P 
A) P = 3 + 40QS 
B) P = 40 + 6QS 
C) P = 40 - 6QS 
D) QS = 40 + 6P 
E) QS = 40 - 6P

Question 16

The y- axis intercept of the demand curve is 60 and the slope is - 8.The equation of the demand curve is ________.

Accepted Answer

A) P = 8 - 60QD 
B) P = 60 - 8QD 
C) QD = 60 - 8P 
D) P = 60 + 8QD 
E) QD = 60 + 8P 
A) P = 8 - 60QD 
B) P = 60 - 8QD 
C) QD = 60 - 8P 
D) P = 60 + 8QD 
E) QD = 60 + 8P

Question 17

Which one of the following will definitely lower the equilibrium price?

Accepted Answer

A) an increase in both demand and supply 
B) a decrease in both demand and supply 
C) an increase in demand combined with a decrease in supply 
D) a decrease in demand combined with an increase in supply 
E) a decrease in supply combined with an increase in demand 
A) an increase in both demand and supply 
B) a decrease in both demand and supply 
C) an increase in demand combined with a decrease in supply 
D) a decrease in demand combined with an increase in supply 
E) a decrease in supply combined with an increase in demand

Question 18

The demand curve is P = 700 - 20QD.The supply curve is P = 300 + 20QS.At market equilibrium,the equilibrium quantity is ________ and the equilibrium price is ________.

Accepted Answer

A) 10;500 
B) 500;10 
C) 0.10;20 
D) 20;0.10 
E) 400;40 
A) 10;500 
B) 500;10 
C) 0.10;20 
D) 20;0.10 
E) 400;40

Question 19

A relative price is

Accepted Answer

A) the ratio of one price to another. 
B) an opportunity cost. 
C) a quantity of a "basket" of goods and services forgone. 
D) determined by demand and supply. 
E) all of the above. 
A) the ratio of one price to another. 
B) an opportunity cost. 
C) a quantity of a "basket" of goods and services forgone. 
D) determined by demand and supply. 
E) all of the above.

Question 20

Use the information below to answer the following questions.
Fact 3.5.1
The market for coffee is initially in equilibrium.Pepsi is a substitute for coffee;cream is a complement of coffee.Consider the market for coffee.Assume that all ceteris paribus assumptions continue to hold except for the event listed.
-Refer to Fact 3.5.1.The price of cream falls.Simultaneously,there is an increase in the wages of farm workers who harvest coffee beans.The equilibrium quantity of coffee

Accepted Answer

A) increases. 
B) decreases. 
C) remains the same. 
D) increases or decreases depending on the slope of the supply and demand curves. 
E) increases,decreases,or remains the same depending on the relative shifts of the supply and demand curves. 
A) increases. 
B) decreases. 
C) remains the same. 
D) increases or decreases depending on the slope of the supply and demand curves. 
E) increases,decreases,or remains the same depending on the relative shifts of the supply and demand curves.

If the number of suppliers of good Y increases,then

Which one of the following correctly describes how price adjustment eliminates a shortage?

Which of the following will definitely result in an increase in the equilibrium price?

If demand increases and supply decreases,then the

Suppose the price of a football is $20.00 and the price of a basketball is $10.00.The of a football is .

An increase in the price of ground beef

The fact that a fall in the price of a good results in a decrease in the quantity of the good supplied illustrates

Use the figure below to answer the following questions. Figure 3.5.1 -Initially,the demand curve for good A is D₂ in Figure 3.5.1.If income increases and A is a normal good,we would expect to see a movement from point A to point

If we observe a fall in the equilibrium price of good A,we know that either the demand for A has

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 rises,what is the new beans equilibrium,ceteris paribus?

"As domestic car prices have increased,consumers have found foreign cars to be a better bargain.Consequently,domestic car sales have fallen and foreign car sales have risen." Based on this information alone,there has been a

A technological improvement in the production of good A

The y- axis intercept of the supply curve is 40 and the slope is 6.The equation of the supply curve is ________.

The y- axis intercept of the demand curve is 60 and the slope is - 8.The equation of the demand curve is ________.

Which one of the following will definitely lower the equilibrium price?

The demand curve is P = 700 - 20Q_D.The supply curve is P = 300 + 20Q_S.At market equilibrium,the equilibrium quantity is and the equilibrium price is .

A relative price is

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

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Exam 3: Demand and Supply

If the number of suppliers of good Y increases,then

Which one of the following correctly describes how price adjustment eliminates a shortage?

Which of the following will definitely result in an increase in the equilibrium price?

If demand increases and supply decreases,then the

Suppose the price of a football is $20.00 and the price of a basketball is $10.00.The ________ of a football is ________.

An increase in the price of ground beef

The fact that a fall in the price of a good results in a decrease in the quantity of the good supplied illustrates

Use the figure below to answer the following questions. Figure 3.5.1 -Initially,the demand curve for good A is D2 in Figure 3.5.1.If income increases and A is a normal good,we would expect to see a movement from point A to point

If we observe a fall in the equilibrium price of good A,we know that either the demand for A has

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 rises,what is the new beans equilibrium,ceteris paribus?

"As domestic car prices have increased,consumers have found foreign cars to be a better bargain.Consequently,domestic car sales have fallen and foreign car sales have risen." Based on this information alone,there has been a

A technological improvement in the production of good A

The y- axis intercept of the supply curve is 40 and the slope is 6.The equation of the supply curve is ________.

The y- axis intercept of the demand curve is 60 and the slope is - 8.The equation of the demand curve is ________.

Which one of the following will definitely lower the equilibrium price?

The demand curve is P = 700 - 20QD.The supply curve is P = 300 + 20QS.At market equilibrium,the equilibrium quantity is ________ and the equilibrium price is ________.

A relative price is

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

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Suppose the price of a football is $20.00 and the price of a basketball is $10.00.The of a football is .

Use the figure below to answer the following questions. Figure 3.5.1 -Initially,the demand curve for good A is D₂ in Figure 3.5.1.If income increases and A is a normal good,we would expect to see a movement from point A to point

The demand curve is P = 700 - 20Q_D.The supply curve is P = 300 + 20Q_S.At market equilibrium,the equilibrium quantity is and the equilibrium price is .