Question 1

The impact of an increase in the price of a particular good is illustrated as a

Accepted Answer

A)  movement downward and to the right along its demand curve. 
B)  rightward shift in its demand curve. 
C)  leftward shift in its demand curve. 
D)  rightward shift in its demand curve AND a movement upward and to the left along its demand curve. 
E)  movement upward and to the left along its demand curve. 
A)  movement downward and to the right along its demand curve. 
B)  rightward shift in its demand curve. 
C)  leftward shift in its demand curve. 
D)  rightward shift in its demand curve AND a movement upward and to the left along its demand curve. 
E)  movement upward and to the left along its demand curve. E

Question 2

If the price of tangerines increases, the price of oranges also rises because

Accepted Answer

A)  buyers' incomes must have decreased and oranges are an inferior good. 
B)  consumers consider the two goods complements and so sellers decrease the supply of oranges. 
C)  if the supply of tangerines decreases, then the supply of oranges also must decrease. 
D)  consumers consider the two goods substitutes and demand for oranges increases. 
E)  buyers must have expected a higher price for oranges and thus increased their demand for oranges. 
A)  buyers' incomes must have decreased and oranges are an inferior good. 
B)  consumers consider the two goods complements and so sellers decrease the supply of oranges. 
C)  if the supply of tangerines decreases, then the supply of oranges also must decrease. 
D)  consumers consider the two goods substitutes and demand for oranges increases. 
E)  buyers must have expected a higher price for oranges and thus increased their demand for oranges. D

Question 3

New technology for producing plywood is developed. Which of the figures above best illustrates this change?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  Figure A and Figure D 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  Figure A and Figure D D

Question 4

An increase in both the equilibrium price and quantity can be the result of

Accepted Answer

A)  a decrease in supply. 
B)  a decrease in demand. 
C)  an increase in supply. 
D)  an increase in demand. 
E)  None of the above answers is correct. 
A)  a decrease in supply. 
B)  a decrease in demand. 
C)  an increase in supply. 
D)  an increase in demand. 
E)  None of the above answers is correct.

Question 5

Two minute noodles are a staple food item for many university students. Two minute noodles are very inexpensive, easy to prepare, and can be combined easily with other foods. After students graduate, find employment and earn a higher income, they decrease their two minute noodle purchases significantly. In this case, two minute noodles are

Accepted Answer

A)  a substitute good. 
B)  a complement for higher-income people. 
C)  an inferior good. 
D)  a normal good. 
E)  None of the above answers is correct. 
A)  a substitute good. 
B)  a complement for higher-income people. 
C)  an inferior good. 
D)  a normal good. 
E)  None of the above answers is correct.

Question 6

There are five hundred buyers in the market for cheese. If we know each individual's demand curves, to find the market demand we must

Accepted Answer

A)  add the prices that each buyer will pay at every quantity. 
B)  add the quantities that each buyer will purchase at every price. 
C)  give up because there is no way to find the market demand. 
D)  average the price each buyer is willing to pay for each given quantity. 
E)  multiply the price times quantity for each buyer and then add the resulting products together. 
A)  add the prices that each buyer will pay at every quantity. 
B)  add the quantities that each buyer will purchase at every price. 
C)  give up because there is no way to find the market demand. 
D)  average the price each buyer is willing to pay for each given quantity. 
E)  multiply the price times quantity for each buyer and then add the resulting products together.

Question 7

Milk can be used to produce cheese or butter. If the price of a kilogram of butter rises, what happens to the supply of cheese?

Accepted Answer

A)  The supply of cheese could increase, decrease or stay the same depending on what happens to the supply of butter. 
B)  The supply of cheese stays the same, and there is no change in the quantity supplied of cheese. 
C)  The supply of cheese increases. 
D)  The supply of cheese decreases. 
E)  The supply of cheese stays the same, and there is a decrease in the quantity supplied of cheese. 
A)  The supply of cheese could increase, decrease or stay the same depending on what happens to the supply of butter. 
B)  The supply of cheese stays the same, and there is no change in the quantity supplied of cheese. 
C)  The supply of cheese increases. 
D)  The supply of cheese decreases. 
E)  The supply of cheese stays the same, and there is a decrease in the quantity supplied of cheese.

Question 8

In the above figure, an increase in productivity

Accepted Answer

A)  shifts the supply curve from S to S2. 
B)  results in a movement from point b to point a. 
C)  shifts the supply curve from S to S1. 
D)  results in a movement from point a to point b. 
E)  has no effect. 
A)  shifts the supply curve from S to S2. 
B)  results in a movement from point b to point a. 
C)  shifts the supply curve from S to S1. 
D)  results in a movement from point a to point b. 
E)  has no effect.

Question 9

If a market begins in equilibrium and then the demand curve shifts leftward, a

Accepted Answer

A)  shortage is created, which is eliminated by a rise in price. 
B)  surplus is created, which is eliminated by the supply curve shifting leftward. 
C)  surplus is created, which is eliminated by a rise in price. 
D)  shortage is created, which is eliminated by a fall in price. 
E)  surplus is created, which is eliminated by a fall in price. 
A)  shortage is created, which is eliminated by a rise in price. 
B)  surplus is created, which is eliminated by the supply curve shifting leftward. 
C)  surplus is created, which is eliminated by a rise in price. 
D)  shortage is created, which is eliminated by a fall in price. 
E)  surplus is created, which is eliminated by a fall in price.

Question 10

Which of the following results in a movement upward along the supply curve for movies in cinemas?

Accepted Answer

A)  A decrease in the price of downloaded movies. 
B)  An increase in the number of cinemas. 
C)  An increase in the price of movie tickets. 
D)  A decrease in the price of movie tickets. 
E)  A decrease in movie star salaries. 
A)  A decrease in the price of downloaded movies. 
B)  An increase in the number of cinemas. 
C)  An increase in the price of movie tickets. 
D)  A decrease in the price of movie tickets. 
E)  A decrease in movie star salaries.

Question 11

The figure above shows the market for iPhones. Which of the following shifts the demand curve from D0 to D1?

Accepted Answer

A)  An increase in people's incomes. 
B)  A requirement that all students at universities have an iPhone. 
C)  A decrease in the price of Zunes, a substitute for iPhones. 
D)  An increase in the price of iPhones. 
E)  A decrease in the price of iPhones. 
A)  An increase in people's incomes. 
B)  A requirement that all students at universities have an iPhone. 
C)  A decrease in the price of Zunes, a substitute for iPhones. 
D)  An increase in the price of iPhones. 
E)  A decrease in the price of iPhones.

Question 12

According to the figure above, which of the following events will increase the quantity demanded of bottled water?

Accepted Answer

A)  A rise in the price of a fitness club membership. 
B)  A fall in the price of bottled water. 
C)  An increase in the number of buyers of bottled water. 
D)  A rise in the price of bottled water. 
E)  A fall in the price of soft drinks. 
A)  A rise in the price of a fitness club membership. 
B)  A fall in the price of bottled water. 
C)  An increase in the number of buyers of bottled water. 
D)  A rise in the price of bottled water. 
E)  A fall in the price of soft drinks.

Question 13

Soft drinks and peanuts are complements. Other influences on buying plans remaining the same, a rise in the price of soft drinks

Accepted Answer

A)  decreases the demand for soft drinks. 
B)  increases the demand for peanuts. 
C)  increases the demand for soft drinks. 
D)  decreases the demand for peanuts. 
E)  has no effect on the demand for peanuts, though it does change the quantity demanded of peanuts. 
A)  decreases the demand for soft drinks. 
B)  increases the demand for peanuts. 
C)  increases the demand for soft drinks. 
D)  decreases the demand for peanuts. 
E)  has no effect on the demand for peanuts, though it does change the quantity demanded of peanuts.

Question 14

The graph illustrates the demand curve for soft drinks. After a rise in the price of a soft drink from $1.00 a can to $2.00 a can, the quantity of soft drinks demanded

Accepted Answer

A)  decreases from 1 can to 0 cans a day. 
B)  remains unchanged. 
C)  increases from 0 cans to 2 cans a day. 
D)  decreases from 2 cans to 0 cans a day. 
E)  cannot be determined from the figure because the demand curve will shift to a new curve. 
A)  decreases from 1 can to 0 cans a day. 
B)  remains unchanged. 
C)  increases from 0 cans to 2 cans a day. 
D)  decreases from 2 cans to 0 cans a day. 
E)  cannot be determined from the figure because the demand curve will shift to a new curve.

Question 15

Consumers regard Dell computers and Apple computers as substitutes. If the price of a Dell computer decreases, the

Accepted Answer

A)  demand for Apple computers decreases. 
B)  demand for Dell computers increases. 
C)  supply of Dell computers increases. 
D)  demand for Apple computers increases. 
E)  demand for Dell computers decreases. 
A)  demand for Apple computers decreases. 
B)  demand for Dell computers increases. 
C)  supply of Dell computers increases. 
D)  demand for Apple computers increases. 
E)  demand for Dell computers decreases.

Question 16

The graph illustrates the supply of sweaters. Which of the following events will increase the supply of sweaters?

Accepted Answer

A)  A rise in the wage rate paid to the workers who make sweaters. 
B)  A rise in the expected future price of a sweater. 
C)  An increase in income if sweaters are a normal good. 
D)  An increase in the number of sellers of sweaters. 
E)  A rise in the price of a sweater. 
A)  A rise in the wage rate paid to the workers who make sweaters. 
B)  A rise in the expected future price of a sweater. 
C)  An increase in income if sweaters are a normal good. 
D)  An increase in the number of sellers of sweaters. 
E)  A rise in the price of a sweater.

Question 17

A market is defined as

Accepted Answer

A)  a physical place where people buy only goods. 
B)  any arrangement that brings buyers and sellers together. 
C)  a place where one good is bartered for another. 
D)  a physical place where people buy both goods and services. 
E)  a store where people buy physical goods. 
A)  a physical place where people buy only goods. 
B)  any arrangement that brings buyers and sellers together. 
C)  a place where one good is bartered for another. 
D)  a physical place where people buy both goods and services. 
E)  a store where people buy physical goods.

Question 18

In the above figure, an increase in cost of the cheese used to produce pizza

Accepted Answer

A)  results in a movement from point b to point a. 
B)  results in a movement from point a to point b. 
C)  shifts the supply curve from S to S2. 
D)  shifts the supply curve from S to S1. 
E)  has no effect. 
A)  results in a movement from point b to point a. 
B)  results in a movement from point a to point b. 
C)  shifts the supply curve from S to S2. 
D)  shifts the supply curve from S to S1. 
E)  has no effect.

Question 19

The above figure shows the market for pizza. The market is in equilibrium when new pizza firms enter the market. What point represents the most likely new price and quantity?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
E)  E 
A)  A 
B)  B 
C)  C 
D)  D 
E)  E

Question 20

What is the 'quantity demanded'?

Accepted Answer

A)  The amount of a good people are able and willing to buy during a specific time period and at a given price. 
B)  The maximum amount of a good that can be consumed during a specific time period. 
C)  The minimum amount of a good that people are willing to buy during a specific time period and at a given price. 
D)  The amount of a good people are able and willing to buy at all possible prices. 
E)  The amount of a good people desire. 
A)  The amount of a good people are able and willing to buy during a specific time period and at a given price. 
B)  The maximum amount of a good that can be consumed during a specific time period. 
C)  The minimum amount of a good that people are willing to buy during a specific time period and at a given price. 
D)  The amount of a good people are able and willing to buy at all possible prices. 
E)  The amount of a good people desire.

The impact of an increase in the price of a particular good is illustrated as a

If the price of tangerines increases, the price of oranges also rises because

New technology for producing plywood is developed. Which of the figures above best illustrates this change?

An increase in both the equilibrium price and quantity can be the result of

There are five hundred buyers in the market for cheese. If we know each individual's demand curves, to find the market demand we must

Milk can be used to produce cheese or butter. If the price of a kilogram of butter rises, what happens to the supply of cheese?

In the above figure, an increase in productivity

If a market begins in equilibrium and then the demand curve shifts leftward, a

Which of the following results in a movement upward along the supply curve for movies in cinemas?

The figure above shows the market for iPhones. Which of the following shifts the demand curve from D0 to D1?

According to the figure above, which of the following events will increase the quantity demanded of bottled water?

Soft drinks and peanuts are complements. Other influences on buying plans remaining the same, a rise in the price of soft drinks

The graph illustrates the demand curve for soft drinks. After a rise in the price of a soft drink from $1.00 a can to $2.00 a can, the quantity of soft drinks demanded

Consumers regard Dell computers and Apple computers as substitutes. If the price of a Dell computer decreases, the

The graph illustrates the supply of sweaters. Which of the following events will increase the supply of sweaters?

A market is defined as

In the above figure, an increase in cost of the cheese used to produce pizza

The above figure shows the market for pizza. The market is in equilibrium when new pizza firms enter the market. What point represents the most likely new price and quantity?

What is the 'quantity demanded'?

Getting Started

The Australian and Global Economies

The Economic Problem

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 4: Demand and Supply

The impact of an increase in the price of a particular good is illustrated as a

If the price of tangerines increases, the price of oranges also rises because

New technology for producing plywood is developed. Which of the figures above best illustrates this change?

An increase in both the equilibrium price and quantity can be the result of

There are five hundred buyers in the market for cheese. If we know each individual's demand curves, to find the market demand we must

Milk can be used to produce cheese or butter. If the price of a kilogram of butter rises, what happens to the supply of cheese?

In the above figure, an increase in productivity

If a market begins in equilibrium and then the demand curve shifts leftward, a

Which of the following results in a movement upward along the supply curve for movies in cinemas?

The figure above shows the market for iPhones. Which of the following shifts the demand curve from D0 to D1?

According to the figure above, which of the following events will increase the quantity demanded of bottled water?

Soft drinks and peanuts are complements. Other influences on buying plans remaining the same, a rise in the price of soft drinks

The graph illustrates the demand curve for soft drinks. After a rise in the price of a soft drink from $1.00 a can to $2.00 a can, the quantity of soft drinks demanded

Consumers regard Dell computers and Apple computers as substitutes. If the price of a Dell computer decreases, the

The graph illustrates the supply of sweaters. Which of the following events will increase the supply of sweaters?

A market is defined as

In the above figure, an increase in cost of the cheese used to produce pizza

The above figure shows the market for pizza. The market is in equilibrium when new pizza firms enter the market. What point represents the most likely new price and quantity?

What is the 'quantity demanded'?

Getting Started

The Australian and Global Economies

The Economic Problem

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters