Question 1

During the last decade, the price of a computer fell every year and the quantity sold increased every year. This experience suggests that the

Accepted Answer

A)  supply curve shifted rightward. 
B)  "law of demand" was definitely contradicted. 
C)  "law of supply" was definitely contradicted. 
D)  demand curve shifted rightward. 
A)  supply curve shifted rightward. 
B)  "law of demand" was definitely contradicted. 
C)  "law of supply" was definitely contradicted. 
D)  demand curve shifted rightward.

Question 2

A change in the price of a good

Accepted Answer

A)  does not shift the good's demand curve but does cause a movement along it. 
B)  shifts the good's demand curve and also causes a movement along it. 
C)  neither shifts the good's demand curve nor causes a movement along it. 
D)  shifts the good's demand curve but does not cause a movement along it. 
A)  does not shift the good's demand curve but does cause a movement along it. 
B)  shifts the good's demand curve and also causes a movement along it. 
C)  neither shifts the good's demand curve nor causes a movement along it. 
D)  shifts the good's demand curve but does not cause a movement along it.

Question 3

A bakery can produce either cakes or cookies. If the price of cookies rises, then

Accepted Answer

A)  the supply curve of cake shifts rightward. 
B)  there is a movement downward along the supply curve of cakes. 
C)  the supply curve of cake shifts leftward. 
D)  there is a movement upward along the supply curve of cakes. 
A)  the supply curve of cake shifts rightward. 
B)  there is a movement downward along the supply curve of cakes. 
C)  the supply curve of cake shifts leftward. 
D)  there is a movement upward along the supply curve of cakes.

Question 4

What are substitutes in production?

Accepted Answer

Goods are substitutes in produ

Question 5

A processor of alligator hides can produce either purses or shoes. If the demand for alligator shoes increases, then the _ alligator purses will .

Accepted Answer

A)  supply of; increase 
B)  supply of; decrease 
C)  demand for; increase 
D)  demand for; decrease 
A)  supply of; increase 
B)  supply of; decrease 
C)  demand for; increase 
D)  demand for; decrease

Question 6

Gruel is an inferior good. Hence, a decrease in people's incomes

Accepted Answer

A)  decreases the quantity of gruel supplied. 
B)  shifts the supply curve of gruel leftward. 
C)  shifts the demand curve for gruel leftward. 
D)  shifts the demand curve for gruel rightward. 
A)  decreases the quantity of gruel supplied. 
B)  shifts the supply curve of gruel leftward. 
C)  shifts the demand curve for gruel leftward. 
D)  shifts the demand curve for gruel rightward.

Question 7

As a result of an increase in the supply of a good, the equilibrium quantity and the equilibrium price _.

Accepted Answer

A)  decreases; falls 
B)  increases; falls 
C)  increases; rises 
D)  decreases; rises 
A)  decreases; falls 
B)  increases; falls 
C)  increases; rises 
D)  decreases; rises

Question 8

The law of demand states that

Accepted Answer

A)  a decrease in the price of a good shifts the demand curve leftward. 
B)  an increase in the price of a good shifts the demand curve leftward. 
C)  other thing remaining the same, the higher the price of a good, the larger is the quantity demanded. 
D)  other things remaining the same, the higher the price of a good, the smaller is the quantity demanded. 
A)  a decrease in the price of a good shifts the demand curve leftward. 
B)  an increase in the price of a good shifts the demand curve leftward. 
C)  other thing remaining the same, the higher the price of a good, the larger is the quantity demanded. 
D)  other things remaining the same, the higher the price of a good, the smaller is the quantity demanded.

Question 9

You observe that in the market for coffee that both the equilibrium price of coffee and the equilibrium quantity have increased. You predict that the demand for coffee

Accepted Answer

A)  has not changed but that the supply of coffee has decreased. 
B)  has increased with no change in the supply of coffee. 
C)  has increased less than supply of coffee has decreased. 
D)  has increased but it is not as large as the increase in supply. 
A)  has not changed but that the supply of coffee has decreased. 
B)  has increased with no change in the supply of coffee. 
C)  has increased less than supply of coffee has decreased. 
D)  has increased but it is not as large as the increase in supply.

Question 10

A decrease in the quantity supplied is represented by a

Accepted Answer

A)  leftward shift in the supply curve. 
B)  rightward shift in the supply curve. 
C)  movement up the supply curve. 
D)  movement down the supply curve. 
A)  leftward shift in the supply curve. 
B)  rightward shift in the supply curve. 
C)  movement up the supply curve. 
D)  movement down the supply curve.

Question 11

If a decrease in the price of gasoline increases the demand for large cars, then

Accepted Answer

A)  gasoline is an inferior good. 
B)  gasoline and large cars are substitutes in consumption. 
C)  large cars are an inferior good. 
D)  gasoline and large cars are complements in consumption. 
A)  gasoline is an inferior good. 
B)  gasoline and large cars are substitutes in consumption. 
C)  large cars are an inferior good. 
D)  gasoline and large cars are complements in consumption.

Question 12

Your friend Tony opened a pizzeria. You helped him to advertise his pizza, which is in fact the best pizza in town. As a result, the demand for Tony's pizza increases and your friend, noticing lines of customers, raises the price of his pizza. But then he fears that the higher price will cause demand to decline, which will cause the price to drop. Is Tony right in his analysis of the situation? Explain.

Accepted Answer

Tony is confusing a change in demand (a

Question 13

The price of a DVD rental is currently $2.50 and the price of a Blu- ray rental is $4.00. If the price of a DVD rental falls by $0.50, the relative price a Blu- ray rental

Accepted Answer

A)  rises. 
B)  does not change. 
C)  falls. 
D)  might change but more information is needed. 
A)  rises. 
B)  does not change. 
C)  falls. 
D)  might change but more information is needed.

Question 14

-The above figures show the market for gasoline. Which figure shows the effect of motorists increasing the number of times they take the bus to work rather than driving their own cars?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D

Question 15

The law of demand implies that demand curves

Accepted Answer

A)  slope down. 
B)  shift rightward whenever the price rises. 
C)  shift leftward whenever the price rises. 
D)  slope up. 
A)  slope down. 
B)  shift rightward whenever the price rises. 
C)  shift leftward whenever the price rises. 
D)  slope up.

Question 16

Which of the following could result in a movement along, but not a shift of, the supply curve for shredded wheat breakfast cereal?

Accepted Answer

A)  A fall in the price of shredded wheat breakfast cereal. 
B)  perfect weather conditions that resulted in a large wheat crop 
C)  an increase in the cost of machinery used to shred wheat 
D)  all of the above 
A)  A fall in the price of shredded wheat breakfast cereal. 
B)  perfect weather conditions that resulted in a large wheat crop 
C)  an increase in the cost of machinery used to shred wheat 
D)  all of the above

Question 17

An increase in demand combined with no change in supply

Accepted Answer

A)  results in only a movement rightward along the demand curve. 
B)  lowers the equilibrium price. 
C)  decreases demand because the supply curve does not shift. 
D)  raises the equilibrium price. 
A)  results in only a movement rightward along the demand curve. 
B)  lowers the equilibrium price. 
C)  decreases demand because the supply curve does not shift. 
D)  raises the equilibrium price.

Question 18

The quantity demanded is

Accepted Answer

A)  independent of consumers' buying plans. 
B)  independent of the price of the good. 
C)  the amount of a good that consumers plan to purchase at a particular price. 
D)  always equal to the equilibrium quantity. 
A)  independent of consumers' buying plans. 
B)  independent of the price of the good. 
C)  the amount of a good that consumers plan to purchase at a particular price. 
D)  always equal to the equilibrium quantity.

Question 19

By definition, an inferior good is a

Accepted Answer

A)  want that is not expressed by demand. 
B)  good for which demand decreases when its price rises. 
C)  normal substitute good. 
D)  good for which demand decreases when income increases. 
A)  want that is not expressed by demand. 
B)  good for which demand decreases when its price rises. 
C)  normal substitute good. 
D)  good for which demand decreases when income increases.

Question 20

An increase in the number of consumers

Accepted Answer

A)  results only in a movement along the demand curve. 
B)  shifts the demand curve rightward. 
C)  shifts the supply curve leftward 
D)  Both answers B and C are correct. 
A)  results only in a movement along the demand curve. 
B)  shifts the demand curve rightward. 
C)  shifts the supply curve leftward 
D)  Both answers B and C are correct.

During the last decade, the price of a computer fell every year and the quantity sold increased every year. This experience suggests that the

A change in the price of a good

A bakery can produce either cakes or cookies. If the price of cookies rises, then

What are substitutes in production?

A processor of alligator hides can produce either purses or shoes. If the demand for alligator shoes increases, then the _ alligator purses will .

Gruel is an inferior good. Hence, a decrease in people's incomes

As a result of an increase in the supply of a good, the equilibrium quantity and the equilibrium price _.

The law of demand states that

You observe that in the market for coffee that both the equilibrium price of coffee and the equilibrium quantity have increased. You predict that the demand for coffee

A decrease in the quantity supplied is represented by a

If a decrease in the price of gasoline increases the demand for large cars, then

The price of a DVD rental is currently $2.50 and the price of a Blu- ray rental is $4.00. If the price of a DVD rental falls by $0.50, the relative price a Blu- ray rental

-The above figures show the market for gasoline. Which figure shows the effect of motorists increasing the number of times they take the bus to work rather than driving their own cars?

The law of demand implies that demand curves

Which of the following could result in a movement along, but not a shift of, the supply curve for shredded wheat breakfast cereal?

An increase in demand combined with no change in supply

The quantity demanded is

By definition, an inferior good is a

An increase in the number of consumers

What Is Economics

The Economic Problem

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 3: Demand and Supply

During the last decade, the price of a computer fell every year and the quantity sold increased every year. This experience suggests that the

A change in the price of a good

A bakery can produce either cakes or cookies. If the price of cookies rises, then

What are substitutes in production?

A processor of alligator hides can produce either purses or shoes. If the demand for alligator shoes increases, then the _ alligator purses will .

Gruel is an inferior good. Hence, a decrease in people's incomes

As a result of an increase in the supply of a good, the equilibrium quantity and the equilibrium price _.

The law of demand states that

You observe that in the market for coffee that both the equilibrium price of coffee and the equilibrium quantity have increased. You predict that the demand for coffee

A decrease in the quantity supplied is represented by a

If a decrease in the price of gasoline increases the demand for large cars, then

The price of a DVD rental is currently $2.50 and the price of a Blu- ray rental is $4.00. If the price of a DVD rental falls by $0.50, the relative price a Blu- ray rental

-The above figures show the market for gasoline. Which figure shows the effect of motorists increasing the number of times they take the bus to work rather than driving their own cars?

The law of demand implies that demand curves

Which of the following could result in a movement along, but not a shift of, the supply curve for shredded wheat breakfast cereal?

An increase in demand combined with no change in supply

The quantity demanded is

By definition, an inferior good is a

An increase in the number of consumers

What Is Economics

The Economic Problem

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters