Question 1

Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding cows. The equilibrium quantity of beef will

Accepted Answer

A)  stay the same. 
B)  increase. 
C)  definitely either stay the same or decrease. 
D)  decrease. 
E)  perhaps increase, decrease or stay the same, but more information is needed to determine which it will do. 
A)  stay the same. 
B)  increase. 
C)  definitely either stay the same or decrease. 
D)  decrease. 
E)  perhaps increase, decrease or stay the same, but more information is needed to determine which it will do.

Question 2

Bagels and cream cheese are complementary goods. Suppose that the price of flour, which is used to produce bagels, increases. The equilibrium price of CREAM CHEESE ________, and the equilibrium quantity of CREAM CHEESE ________.

Accepted Answer

A)  rises; decreases 
B)  falls; decreases 
C)  does not change; does not change 
D)  rises; increases 
E)  falls; increases 
A)  rises; decreases 
B)  falls; decreases 
C)  does not change; does not change 
D)  rises; increases 
E)  falls; increases

Question 3

If an early frost destroys most of the apple crop, the equilibrium price of an apple ________ and the equilibrium quantity ________.

Accepted Answer

A)  rises; increases 
B)  falls; increases 
C)  rises; decreases 
D)  falls; decreases 
E)  does not change; decreases 
A)  rises; increases 
B)  falls; increases 
C)  rises; decreases 
D)  falls; decreases 
E)  does not change; decreases

Question 4

In the figure above, a price of $35 per dozen roses results in

Accepted Answer

A)  an eventual rightward shift of the demand curve and/or leftward shift of the supply curve. 
B)  a shortage. 
C)  upward pressure on the price of roses. 
D)  equilibrium. 
E)  a surplus. 
A)  an eventual rightward shift of the demand curve and/or leftward shift of the supply curve. 
B)  a shortage. 
C)  upward pressure on the price of roses. 
D)  equilibrium. 
E)  a surplus.

Question 5

The graph illustrates the supply of sweaters. A fall in the price of sweaters brings

Accepted Answer

A)  a movement along the supply curve. 
B)  a decrease in the quantity supplied of sweaters. 
C)  a shift of the supply curve. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct. 
A)  a movement along the supply curve. 
B)  a decrease in the quantity supplied of sweaters. 
C)  a shift of the supply curve. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct.

Question 6

The quantity supplied of a good or service is the

Accepted Answer

A)  list of all quantities at different prices, as illustrated by a demand schedule and a demand curve. 
B)  quantity consumed at one price 
C)  one quantity produced at a variety of prices. 
D)  list of all quantities at different prices, as illustrated by a supply schedule and a supply curve. 
E)  quantity produced at one price. 
A)  list of all quantities at different prices, as illustrated by a demand schedule and a demand curve. 
B)  quantity consumed at one price 
C)  one quantity produced at a variety of prices. 
D)  list of all quantities at different prices, as illustrated by a supply schedule and a supply curve. 
E)  quantity produced at one price.

Question 7

The law of supply states that, other things remaining the same,

Accepted Answer

A)  if the price of a good increases, firms buy less of it. 
B)  demand increases when supply increases. 
C)  if the price of a good increases, the supply increases. 
D)  as people's income increases, the supply of goods increases. 
E)  if the price of a good increases, the quantity supplied increases. 
A)  if the price of a good increases, firms buy less of it. 
B)  demand increases when supply increases. 
C)  if the price of a good increases, the supply increases. 
D)  as people's income increases, the supply of goods increases. 
E)  if the price of a good increases, the quantity supplied increases.

Question 8

Suppose over the next few years the productivity of firms producing electric cars improves dramatically. The advance in productivity leads to

Accepted Answer

A)  an increase in the supply electric cars so that the supply curve shifts rightward. 
B)  a decrease in the supply of electric cars so that the supply curve shifts rightward. 
C)  a decrease in the supply of electric cars so that the supply curve shifts leftward. 
D)  an increase in the supply of electric cars so that the supply curve shifts leftward. 
E)  no change in the supply of electric cars, only a change in the quantity supplied of electric cars. 
A)  an increase in the supply electric cars so that the supply curve shifts rightward. 
B)  a decrease in the supply of electric cars so that the supply curve shifts rightward. 
C)  a decrease in the supply of electric cars so that the supply curve shifts leftward. 
D)  an increase in the supply of electric cars so that the supply curve shifts leftward. 
E)  no change in the supply of electric cars, only a change in the quantity supplied of electric cars.

Question 9

Assume that pizza and tacos are substitutes, and the price of a pizza increases. Which of the following correctly indicates what happens?

Accepted Answer

A)  The demand for pizza decreases and the demand for tacos increases. 
B)  The quantity of tacos demanded increases and the quantity of pizza demanded decreases. 
C)  The quantity of pizza demanded decreases and the demand for tacos increases. 
D)  The demand for each decreases because both are normal goods. 
E)  The demand for both goods decreases. 
A)  The demand for pizza decreases and the demand for tacos increases. 
B)  The quantity of tacos demanded increases and the quantity of pizza demanded decreases. 
C)  The quantity of pizza demanded decreases and the demand for tacos increases. 
D)  The demand for each decreases because both are normal goods. 
E)  The demand for both goods decreases.

Question 10

Changes in which of the following factors do NOT shift the demand curve?

Accepted Answer

A)  Buyers' incomes 
B)  The price of the good 
C)  The price expected in the future 
D)  The number of buyers 
E)  The price of a substitute good 
A)  Buyers' incomes 
B)  The price of the good 
C)  The price expected in the future 
D)  The number of buyers 
E)  The price of a substitute good

Question 11

An increase in the number of fast-food restaurants

Accepted Answer

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

Question 12

In the above figure, the movement from point a to point b reflects

Accepted Answer

A)  an increase in the number of people who eat pizza. 
B)  a decrease in the price of pizza. 
C)  an increase in the demand for pizza. 
D)  an increase in the price of the tomato sauce used to produce pizza. 
E)  a decrease in the number of firms producing pizza. 
A)  an increase in the number of people who eat pizza. 
B)  a decrease in the price of pizza. 
C)  an increase in the demand for pizza. 
D)  an increase in the price of the tomato sauce used to produce pizza. 
E)  a decrease in the number of firms producing pizza.

Question 13

An increase in the number of producers of bird seed ________ the supply of bird seed and shifts the supply curve of bird seed ________.

Accepted Answer

A)  decreases; rightward 
B)  decreases; leftward 
C)  increases; rightward 
D)  does not change; rightward 
E)  increases; leftward 
A)  decreases; rightward 
B)  decreases; leftward 
C)  increases; rightward 
D)  does not change; rightward 
E)  increases; leftward

Question 14

When there is a shortage of parking spaces at your university, the

Accepted Answer

A)  supply of parking spaces is greater than the demand. 
B)  quantity of parking spaces supplied is greater than the quantity of parking spaces demanded. 
C)  demand for parking spaces is greater than the supply. 
D)  quantity of parking spaces demanded is greater than the quantity of parking spaces supplied. 
E)  Both answers A and D are correct. 
A)  supply of parking spaces is greater than the demand. 
B)  quantity of parking spaces supplied is greater than the quantity of parking spaces demanded. 
C)  demand for parking spaces is greater than the supply. 
D)  quantity of parking spaces demanded is greater than the quantity of parking spaces supplied. 
E)  Both answers A and D are correct.

Question 15

The graph illustrates the market for bottled water. When the price exceeds the equilibrium price, the quantity demanded is ________ the quantity supplied and the price of the good will ________.

Accepted Answer

A)  equal to; fall 
B)  greater than; fall 
C)  less than; fall 
D)  greater than; rise 
E)  less than; rise 
A)  equal to; fall 
B)  greater than; fall 
C)  less than; fall 
D)  greater than; rise 
E)  less than; rise

Question 16

In the figure above, a price of $15 per dozen roses results in

Accepted Answer

A)  equilibrium. 
B)  an eventual leftward shift of the demand curve and/or rightward shift of the supply curve. 
C)  a shortage. 
D)  downward pressure on the price of roses. 
E)  a surplus. 
A)  equilibrium. 
B)  an eventual leftward shift of the demand curve and/or rightward shift of the supply curve. 
C)  a shortage. 
D)  downward pressure on the price of roses. 
E)  a surplus.

Question 17

If the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward, then

Accepted Answer

A)  the equilibrium quantity definitely increases. 
B)  the equilibrium quantity definitely remains the same. 
C)  more information is needed to determine the effect on the equilibrium quantity. 
D)  the equilibrium quantity definitely decreases. 
E)  the equilibrium price definitely falls. 
A)  the equilibrium quantity definitely increases. 
B)  the equilibrium quantity definitely remains the same. 
C)  more information is needed to determine the effect on the equilibrium quantity. 
D)  the equilibrium quantity definitely decreases. 
E)  the equilibrium price definitely falls.

Question 18

The above figure shows the market for pizza. The market is in equilibrium when people's incomes decrease. If pizza is a normal good, then which 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 19

Consider the market for smart phones. Which of the following shifts the demand curve rightward?

Accepted Answer

A)  A decrease in the number of smart phone buyers. 
B)  An increase in the price of smart phones. 
C)  A decrease in the price of smart phones. 
D)  An increase in the supply of smart phones. 
E)  An increase in the price of land-line phone service, a substitute for smart phones. 
A)  A decrease in the number of smart phone buyers. 
B)  An increase in the price of smart phones. 
C)  A decrease in the price of smart phones. 
D)  An increase in the supply of smart phones. 
E)  An increase in the price of land-line phone service, a substitute for smart phones.

Question 20

The figure above shows the market for iPhones. Which of the following creates a movement from point A to point B?

Accepted Answer

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

Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding cows. The equilibrium quantity of beef will

Bagels and cream cheese are complementary goods. Suppose that the price of flour, which is used to produce bagels, increases. The equilibrium price of CREAM CHEESE , and the equilibrium quantity of CREAM CHEESE .

If an early frost destroys most of the apple crop, the equilibrium price of an apple and the equilibrium quantity .

In the figure above, a price of $35 per dozen roses results in

The graph illustrates the supply of sweaters. A fall in the price of sweaters brings

The quantity supplied of a good or service is the

The law of supply states that, other things remaining the same,

Suppose over the next few years the productivity of firms producing electric cars improves dramatically. The advance in productivity leads to

Assume that pizza and tacos are substitutes, and the price of a pizza increases. Which of the following correctly indicates what happens?

Changes in which of the following factors do NOT shift the demand curve?

An increase in the number of fast-food restaurants

In the above figure, the movement from point a to point b reflects

An increase in the number of producers of bird seed the supply of bird seed and shifts the supply curve of bird seed .

When there is a shortage of parking spaces at your university, the

The graph illustrates the market for bottled water. When the price exceeds the equilibrium price, the quantity demanded is the quantity supplied and the price of the good will .

In the figure above, a price of $15 per dozen roses results in

If the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward, then

The above figure shows the market for pizza. The market is in equilibrium when people's incomes decrease. If pizza is a normal good, then which point represents the most likely new price and quantity?

Consider the market for smart phones. Which of the following shifts the demand curve rightward?

The figure above shows the market for iPhones. Which of the following creates a movement from point A to point B?

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

Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding cows. The equilibrium quantity of beef will

Bagels and cream cheese are complementary goods. Suppose that the price of flour, which is used to produce bagels, increases. The equilibrium price of CREAM CHEESE ________, and the equilibrium quantity of CREAM CHEESE ________.

If an early frost destroys most of the apple crop, the equilibrium price of an apple ________ and the equilibrium quantity ________.

In the figure above, a price of $35 per dozen roses results in

The graph illustrates the supply of sweaters. A fall in the price of sweaters brings

The quantity supplied of a good or service is the

The law of supply states that, other things remaining the same,

Suppose over the next few years the productivity of firms producing electric cars improves dramatically. The advance in productivity leads to

Assume that pizza and tacos are substitutes, and the price of a pizza increases. Which of the following correctly indicates what happens?

Changes in which of the following factors do NOT shift the demand curve?

An increase in the number of fast-food restaurants

In the above figure, the movement from point a to point b reflects

An increase in the number of producers of bird seed ________ the supply of bird seed and shifts the supply curve of bird seed ________.

When there is a shortage of parking spaces at your university, the

The graph illustrates the market for bottled water. When the price exceeds the equilibrium price, the quantity demanded is ________ the quantity supplied and the price of the good will ________.

In the figure above, a price of $15 per dozen roses results in

If the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward, then

The above figure shows the market for pizza. The market is in equilibrium when people's incomes decrease. If pizza is a normal good, then which point represents the most likely new price and quantity?

Consider the market for smart phones. Which of the following shifts the demand curve rightward?

The figure above shows the market for iPhones. Which of the following creates a movement from point A to point B?

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

Bagels and cream cheese are complementary goods. Suppose that the price of flour, which is used to produce bagels, increases. The equilibrium price of CREAM CHEESE , and the equilibrium quantity of CREAM CHEESE .

If an early frost destroys most of the apple crop, the equilibrium price of an apple and the equilibrium quantity .

An increase in the number of producers of bird seed the supply of bird seed and shifts the supply curve of bird seed .

The graph illustrates the market for bottled water. When the price exceeds the equilibrium price, the quantity demanded is the quantity supplied and the price of the good will .