Question 1

A construction boom occurs and many of the new buildings need plywood for their framing. 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 or Figure C 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  Figure A or Figure C

Question 2

Which of the following increases the supply of a product?

Accepted Answer

A)  Some producers going bankrupt and leaving the industry. 
B)  Lower prices for the resources used to produce the product. 
C)  A decrease in productivity. 
D)  An increase in the expected future price of the product. 
E)  A higher price for the product. 
A)  Some producers going bankrupt and leaving the industry. 
B)  Lower prices for the resources used to produce the product. 
C)  A decrease in productivity. 
D)  An increase in the expected future price of the product. 
E)  A higher price for the product.

Question 3

It is expected that the price of a tonne of wheat will increase in one month. This belief will result in

Accepted Answer

A)  an increase in the current supply of wheat. 
B)  no change in the current or future supply of wheat. 
C)  an increase in the current quantity supplied of wheat. 
D)  a decrease in the future supply of wheat. 
E)  a decrease in the current supply of wheat. 
A)  an increase in the current supply of wheat. 
B)  no change in the current or future supply of wheat. 
C)  an increase in the current quantity supplied of wheat. 
D)  a decrease in the future supply of wheat. 
E)  a decrease in the current supply of wheat.

Question 4

Kiwi fruit and strawberries are substitutes for consumers. An increase in the price of a kiwi fruit coupled with an increase in the number of strawberry growers ________ the equilibrium price of a kilogram of strawberries and ________ the equilibrium quantity of strawberries.

Accepted Answer

A)  lowers; increases 
B)  probably changes, but more information is needed to determine if it raises or lowers; increases 
C)  raises; increases 
D)  lowers; probably changes, but more information is needed to determine if it increases or decreases 
E)  raises; probably changes, but more information is needed to determine if it increases or decreases 
A)  lowers; increases 
B)  probably changes, but more information is needed to determine if it raises or lowers; increases 
C)  raises; increases 
D)  lowers; probably changes, but more information is needed to determine if it increases or decreases 
E)  raises; probably changes, but more information is needed to determine if it increases or decreases

Question 5

The above figure illustrates the market for corn. If point 'a' represents the original equilibrium and point 'b' the new equilibrium, which of the following could have caused the change?

Accepted Answer

A)  An increase in consumers' preferences for corn. 
B)  An increase in the labour costs of producing corn. 
C)  An increase in consumers' income if corn is a normal good. 
D)  An improvement in the technology of producing corn. 
E)  An increase in consumers' income if corn is an inferior good. 
A)  An increase in consumers' preferences for corn. 
B)  An increase in the labour costs of producing corn. 
C)  An increase in consumers' income if corn is a normal good. 
D)  An improvement in the technology of producing corn. 
E)  An increase in consumers' income if corn is an inferior good.

Question 6

For consumers, corn chips and salsa are complements. If the price of salsa rises, what is the effect on the equilibrium price and quantity of corn chips?

Accepted Answer

A)  The equilibrium price of corn chips falls, and the equilibrium quantity decreases. 
B)  The equilibrium price of corn chips rises, and the equilibrium quantity decreases. 
C)  The equilibrium price of corn chips rises, and the equilibrium quantity increases. 
D)  There is no change in the equilibrium price of corn chips, and the equilibrium quantity increases. 
E)  The equilibrium price of corn chips could rise, fall or stay the same, and the equilibrium quantity increases. 
A)  The equilibrium price of corn chips falls, and the equilibrium quantity decreases. 
B)  The equilibrium price of corn chips rises, and the equilibrium quantity decreases. 
C)  The equilibrium price of corn chips rises, and the equilibrium quantity increases. 
D)  There is no change in the equilibrium price of corn chips, and the equilibrium quantity increases. 
E)  The equilibrium price of corn chips could rise, fall or stay the same, and the equilibrium quantity increases.

Question 7

The market demand curve

Accepted Answer

A)  cannot show a change in demand for a good. 
B)  is upward sloping. 
C)  is the vertical sum of individual demand curves. 
D)  cannot show how quantity demanded changes in response to a change in price. 
E)  is the horizontal sum of individual demand curves. 
A)  cannot show a change in demand for a good. 
B)  is upward sloping. 
C)  is the vertical sum of individual demand curves. 
D)  cannot show how quantity demanded changes in response to a change in price. 
E)  is the horizontal sum of individual demand curves.

Question 8

One reason supply curves have an upward slope is because

Accepted Answer

A)  a higher price brings a greater profit, so firms want to sell more of that good. 
B)  increased supply will require increased technology. 
C)  to have more of the good supplied requires more firms to open. 
D)  people will pay a higher price when less is supplied. 
E)  None of the above answers is correct because supply curves have a downward slope. 
A)  a higher price brings a greater profit, so firms want to sell more of that good. 
B)  increased supply will require increased technology. 
C)  to have more of the good supplied requires more firms to open. 
D)  people will pay a higher price when less is supplied. 
E)  None of the above answers is correct because supply curves have a downward slope.

Question 9

Using the data in the table above, at the price of $80 a phone,

Accepted Answer

A)  a surplus of 25,000 smartphones occurs. 
B)  a surplus of 80,000 smartphones occurs. 
C)  a shortage of 55,000 smartphones occurs. 
D)  the market is in equilibrium. 
E)  a shortage of 25,000 smartphones occurs. 
A)  a surplus of 25,000 smartphones occurs. 
B)  a surplus of 80,000 smartphones occurs. 
C)  a shortage of 55,000 smartphones occurs. 
D)  the market is in equilibrium. 
E)  a shortage of 25,000 smartphones occurs.

Question 10

Which of the following shifts the supply curve for oranges?

Accepted Answer

A)  An increase in the number of orange consumers. 
B)  Disastrous weather that destroys about half of this year's orange crop. 
C)  A newly discovered increase in the nutritional value of oranges. 
D)  An increase in income for all orange consumers if oranges are a normal good. 
E)  An increase in the price of bananas, a substitute in consumption for oranges. 
A)  An increase in the number of orange consumers. 
B)  Disastrous weather that destroys about half of this year's orange crop. 
C)  A newly discovered increase in the nutritional value of oranges. 
D)  An increase in income for all orange consumers if oranges are a normal good. 
E)  An increase in the price of bananas, a substitute in consumption for oranges.

Question 11

Suppose improvements in technology cause the supply of natural gas to increase and at the same time the demand for natural gas increases. What are we sure of?

Accepted Answer

A)  Both equilibrium price and quantity increase. 
B)  Equilibrium price decreases. 
C)  Equilibrium price increases. 
D)  Equilibrium quantity decreases. 
E)  Equilibrium quantity increases. 
A)  Both equilibrium price and quantity increase. 
B)  Equilibrium price decreases. 
C)  Equilibrium price increases. 
D)  Equilibrium quantity decreases. 
E)  Equilibrium quantity increases.

Question 12

Which figure above shows the effect if research is published claiming that eating pizza is healthy?

Accepted Answer

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

Question 13

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

Accepted Answer

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

Question 14

Using the data in the table above, the equilibrium quantity and equilibrium price for a cellular smart phone is

Accepted Answer

A)  60,000 and $50. 
B)  80,000 and $80. 
C)  40,000 and $20. 
D)  50,000 and $100. 
E)  100,000 and $20. 
A)  60,000 and $50. 
B)  80,000 and $80. 
C)  40,000 and $20. 
D)  50,000 and $100. 
E)  100,000 and $20.

Question 15

The quantity supplied of a good is

Accepted Answer

A)  always larger than the quantity demanded at each price. 
B)  equal to the difference between the quantity available and the quantity desired by all consumers and producers. 
C)  the same thing as the quantity demanded at each price. 
D)  the amount that the people are willing and able to sell during a given time period at a specified price. 
E)  the amount the firm will sell when it can sell all it wants. 
A)  always larger than the quantity demanded at each price. 
B)  equal to the difference between the quantity available and the quantity desired by all consumers and producers. 
C)  the same thing as the quantity demanded at each price. 
D)  the amount that the people are willing and able to sell during a given time period at a specified price. 
E)  the amount the firm will sell when it can sell all it wants.

Question 16

In the above figure, ________ will shift the demand curve from D to D1.

Accepted Answer

A)  a fall in the cost of producing pizza 
B)  buyers' expectations that pizza will be less expensive next week 
C)  a scientific article published that demonstrates eating pizza is good for one's health 
D)  an increase in income if pizza is an inferior good 
E)  a decrease in the price of a sub sandwich, a substitute for pizza 
A)  a fall in the cost of producing pizza 
B)  buyers' expectations that pizza will be less expensive next week 
C)  a scientific article published that demonstrates eating pizza is good for one's health 
D)  an increase in income if pizza is an inferior good 
E)  a decrease in the price of a sub sandwich, a substitute for pizza

Question 17

The graph illustrates the market for computers. If the number of buyers of computers increases and technology advances, you predict that the

Accepted Answer

A)  equilibrium quantity of computers will decrease. 
B)  equilibrium price of a computer will fall. 
C)  equilibrium quantity of computers will increase. 
D)  equilibrium quantity of computers might increase, decrease or not change. 
E)  equilibrium price of a computer will rise. 
A)  equilibrium quantity of computers will decrease. 
B)  equilibrium price of a computer will fall. 
C)  equilibrium quantity of computers will increase. 
D)  equilibrium quantity of computers might increase, decrease or not change. 
E)  equilibrium price of a computer will rise.

Question 18

A demand schedule

Accepted Answer

A)  shows the quantity demanded at one price. 
B)  is a graph showing a relationship between the quantity demanded and the price of a good. 
C)  shows that demand is on schedule. 
D)  shows how demand changes when the supply changes. 
E)  is a list of the quantities demanded at each different price when all other influences on buying plans remain the same. 
A)  shows the quantity demanded at one price. 
B)  is a graph showing a relationship between the quantity demanded and the price of a good. 
C)  shows that demand is on schedule. 
D)  shows how demand changes when the supply changes. 
E)  is a list of the quantities demanded at each different price when all other influences on buying plans remain the same.

Question 19

What happens to the demand for a good if a complement's price increases?

Accepted Answer

A)  The demand decreases and the demand curve shifts rightward. 
B)  The demand increases and the demand curve shifts leftward. 
C)  The demand increases and the demand curve shifts rightward. 
D)  The demand decreases and the demand curve shifts leftward. 
E)  There is no impact on demand for the good and the demand curve does not shift. 
A)  The demand decreases and the demand curve shifts rightward. 
B)  The demand increases and the demand curve shifts leftward. 
C)  The demand increases and the demand curve shifts rightward. 
D)  The demand decreases and the demand curve shifts leftward. 
E)  There is no impact on demand for the good and the demand curve does not shift.

Question 20

If there is a surplus of tacos, then the

Accepted Answer

A)  quantity of tacos demanded equals the quantity of tacos supplied. 
B)  quantity of tacos demanded is greater than the quantity of tacos supplied. 
C)  quantity of tacos demanded is less than the quantity of tacos supplied. 
D)  supply curve of tacos will shift leftward to eliminate the surplus. 
E)  market is at equilibrium. 
A)  quantity of tacos demanded equals the quantity of tacos supplied. 
B)  quantity of tacos demanded is greater than the quantity of tacos supplied. 
C)  quantity of tacos demanded is less than the quantity of tacos supplied. 
D)  supply curve of tacos will shift leftward to eliminate the surplus. 
E)  market is at equilibrium.

A construction boom occurs and many of the new buildings need plywood for their framing. Which of the figures above best illustrates this change?

Which of the following increases the supply of a product?

It is expected that the price of a tonne of wheat will increase in one month. This belief will result in

Kiwi fruit and strawberries are substitutes for consumers. An increase in the price of a kiwi fruit coupled with an increase in the number of strawberry growers the equilibrium price of a kilogram of strawberries and the equilibrium quantity of strawberries.

The above figure illustrates the market for corn. If point 'a' represents the original equilibrium and point 'b' the new equilibrium, which of the following could have caused the change?

For consumers, corn chips and salsa are complements. If the price of salsa rises, what is the effect on the equilibrium price and quantity of corn chips?

The market demand curve

One reason supply curves have an upward slope is because

Using the data in the table above, at the price of $80 a phone,

Which of the following shifts the supply curve for oranges?

Suppose improvements in technology cause the supply of natural gas to increase and at the same time the demand for natural gas increases. What are we sure of?

Which figure above shows the effect if research is published claiming that eating pizza is healthy?

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

Using the data in the table above, the equilibrium quantity and equilibrium price for a cellular smart phone is

The quantity supplied of a good is

In the above figure, ________ will shift the demand curve from D to D1.

The graph illustrates the market for computers. If the number of buyers of computers increases and technology advances, you predict that the

A demand schedule

What happens to the demand for a good if a complement's price increases?

If there is a surplus of tacos, then the

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

A construction boom occurs and many of the new buildings need plywood for their framing. Which of the figures above best illustrates this change?

Which of the following increases the supply of a product?

It is expected that the price of a tonne of wheat will increase in one month. This belief will result in

Kiwi fruit and strawberries are substitutes for consumers. An increase in the price of a kiwi fruit coupled with an increase in the number of strawberry growers ________ the equilibrium price of a kilogram of strawberries and ________ the equilibrium quantity of strawberries.

The above figure illustrates the market for corn. If point 'a' represents the original equilibrium and point 'b' the new equilibrium, which of the following could have caused the change?

For consumers, corn chips and salsa are complements. If the price of salsa rises, what is the effect on the equilibrium price and quantity of corn chips?

The market demand curve

One reason supply curves have an upward slope is because

Using the data in the table above, at the price of $80 a phone,

Which of the following shifts the supply curve for oranges?

Suppose improvements in technology cause the supply of natural gas to increase and at the same time the demand for natural gas increases. What are we sure of?

Which figure above shows the effect if research is published claiming that eating pizza is healthy?

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

Using the data in the table above, the equilibrium quantity and equilibrium price for a cellular smart phone is

The quantity supplied of a good is

In the above figure, ________ will shift the demand curve from D to D1.

The graph illustrates the market for computers. If the number of buyers of computers increases and technology advances, you predict that the

A demand schedule

What happens to the demand for a good if a complement's price increases?

If there is a surplus of tacos, then the

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

Kiwi fruit and strawberries are substitutes for consumers. An increase in the price of a kiwi fruit coupled with an increase in the number of strawberry growers the equilibrium price of a kilogram of strawberries and the equilibrium quantity of strawberries.