Question 1

When the price of a pizza decreases from $14 to $12,

Accepted Answer

A)  the income effect means people buy less pizza. 
B)  the quantity demanded of pizza will not change. 
C)  the income effect points out that the total purchasing power of people who buy pizza increases. 
D)  None of the above answers is correct. 
A)  the income effect means people buy less pizza. 
B)  the quantity demanded of pizza will not change. 
C)  the income effect points out that the total purchasing power of people who buy pizza increases. 
D)  None of the above answers is correct.

Question 2

In March, the quantity of orange juice sold in the town of Jackson was 3000 cartons and the price $3. In May, the quantity of orange juice sold in the town of Jackson was 3500 cartons and the price was
$3)20. This change in the price and quantity sold could have been the result of

Accepted Answer

A)  the after effects of a cold winter in Florida that killed half of the orange crop. 
B)  a reduction in the number of orange juice coupons provided by local markets. 
C)  the after effects of a warm winter in Florida that increased the orange crop yield by 50 percent. 
D)  the release of a medical study suggesting that consuming orange juice helps prevent cancer. 
A)  the after effects of a cold winter in Florida that killed half of the orange crop. 
B)  a reduction in the number of orange juice coupons provided by local markets. 
C)  the after effects of a warm winter in Florida that increased the orange crop yield by 50 percent. 
D)  the release of a medical study suggesting that consuming orange juice helps prevent cancer.

Question 3

Demands differ from wants because

Accepted Answer

A)  wants require a plan to acquire a good but demands require no such plan. 
B)  demands reflect a decision about which wants to satisfy and a plan to buy the good, while wants are unlimited and involve no specific plan to acquire the good. 
C)  demands are unlimited, whereas wants are limited by income. 
D)  wants imply a decision about which demands to satisfy, while demands involve no specific plan to acquire the good. 
A)  wants require a plan to acquire a good but demands require no such plan. 
B)  demands reflect a decision about which wants to satisfy and a plan to buy the good, while wants are unlimited and involve no specific plan to acquire the good. 
C)  demands are unlimited, whereas wants are limited by income. 
D)  wants imply a decision about which demands to satisfy, while demands involve no specific plan to acquire the good.

Question 4

Which of the following influences does NOT shift the supply curve?

Accepted Answer

A)  A decrease in the number of suppliers. 
B)  The development of new technology. 
C)  A rise in the wages paid workers who produce the good. 
D)  People deciding that they want to buy more of the product. 
A)  A decrease in the number of suppliers. 
B)  The development of new technology. 
C)  A rise in the wages paid workers who produce the good. 
D)  People deciding that they want to buy more of the product.

Question 5

All grapefruit juice producers have decided to blend tangerine juice with the grapefruit juice. This blend results in a higher cost of production, but studies show that consumers prefer the taste of the blend to straight grapefruit juice. What will happen to the equilibrium price and quantity of the new "blended" grapefruit juice now that it costs more to produce but consumers like it better?

Accepted Answer

A)  The price rises and the quantity increases. 
B)  The effect on the price is uncertain but the quantity increases. 
C)  The price falls and the quantity increases. 
D)  The price rises, but the effect on the quantity is uncertain. 
A)  The price rises and the quantity increases. 
B)  The effect on the price is uncertain but the quantity increases. 
C)  The price falls and the quantity increases. 
D)  The price rises, but the effect on the quantity is uncertain.

Question 6

Which of the following always raises the equilibrium price?

Accepted Answer

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

Question 7

The price of a bag of corn chips is $3, and the price of a bottle of soda is $1. What is the relative price of a bag of corn chips?

Accepted Answer

A)  33¢ 
B)  3 bottles of soda 
C)  1/3 bottle of soda 
D)  $3 
A)  33¢ 
B)  3 bottles of soda 
C)  1/3 bottle of soda 
D)  $3

Question 8

If the demand curve for bottled water shifts leftward and the supply curve of bottled water shifts leftward, the equilibrium

Accepted Answer

A)  quantity of bottled water definitely decreases. 
B)  price of bottled water definitely decreases. 
C)  quantity of bottled water definitely increases. 
D)  price of bottled water definitely increases. 
A)  quantity of bottled water definitely decreases. 
B)  price of bottled water definitely decreases. 
C)  quantity of bottled water definitely increases. 
D)  price of bottled water definitely increases.

Question 9

A supply curve is also a maximum- supply- price curve.

Accepted Answer

A) True 
 B)False

Question 10

-Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. What of the following could result in a movement to point b?

Accepted Answer

A)  an increase in the price of bottled water 
B)  a decrease in the price of bottled water 
C)  a decrease in the relative price of a soft drink 
D)  an increase in the opportunity cost of soft drinks 
A)  an increase in the price of bottled water 
B)  a decrease in the price of bottled water 
C)  a decrease in the relative price of a soft drink 
D)  an increase in the opportunity cost of soft drinks

Question 11

Which of the following influences people's buying plans and does not shift the demand curve?

Accepted Answer

A)  the price of the good 
B)  preferences 
C)  income 
D)  the prices of related goods 
A)  the price of the good 
B)  preferences 
C)  income 
D)  the prices of related goods

Question 12

When demand decreases and supply does not change, the equilibrium price and the equilibrium quantity .

Accepted Answer

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

Question 13

If the U.S. Surgeon General announces that increased wheat consumption could cause heightened anxiety levels among children and adults, what happens to the equilibrium price and quantity of shredded wheat?

Accepted Answer

A)  The equilibrium price rises and the equilibrium quantity decreases. 
B)  The equilibrium price falls and the equilibrium quantity increases. 
C)  The equilibrium price rises and the equilibrium quantity increases. 
D)  The equilibrium price falls and the equilibrium quantity decreases. 
A)  The equilibrium price rises and the equilibrium quantity decreases. 
B)  The equilibrium price falls and the equilibrium quantity increases. 
C)  The equilibrium price rises and the equilibrium quantity increases. 
D)  The equilibrium price falls and the equilibrium quantity decreases.

Question 14

In the market for magazines, the "income effect" means that

Accepted Answer

A)  a decrease in the price of a substitute product like books will make magazine readers feel a little poorer than they were before. 
B)  an increase in the price of magazines will reduce the total purchasing power of magazine readers, making them able to afford fewer magazines. 
C)  magazines are usually purchased by people with higher than average incomes. 
D)  an increase in the price of magazines will raise the relative price of magazines to books, causing magazine readers to read more books and fewer magazines. 
A)  a decrease in the price of a substitute product like books will make magazine readers feel a little poorer than they were before. 
B)  an increase in the price of magazines will reduce the total purchasing power of magazine readers, making them able to afford fewer magazines. 
C)  magazines are usually purchased by people with higher than average incomes. 
D)  an increase in the price of magazines will raise the relative price of magazines to books, causing magazine readers to read more books and fewer magazines.

Question 15

The ABC Music club charges a price of $16 for a CD and $8 for a cassette. Both CDs and cassettes are normal goods. If the ABC Music club increases the price of a CD to $18, everything else remaining the same, the

Accepted Answer

A)  income effect induces club members to buy fewer CDs. 
B)  substitution effect induces club members to buy more cassettes and fewer CDs. 
C)  substitution effect induces club members to buy more CDs and fewer cassettes. 
D)  Both answers A and B are correct. 
A)  income effect induces club members to buy fewer CDs. 
B)  substitution effect induces club members to buy more cassettes and fewer CDs. 
C)  substitution effect induces club members to buy more CDs and fewer cassettes. 
D)  Both answers A and B are correct.

Question 16

An economist says: "The supply curve has two interpretations." What does the economist mean?

Accepted Answer

The first interpretation is that the sup

Question 17

Bicycles are made out of steel. If the price of steel increases, there is a shift in the supply curve of bicycles that leads to

Accepted Answer

A)  a temporary surplus of bicycles. 
B)  a shift in the demand curve for bicycles. 
C)  an increase in the price of a bicycle. 
D)  a permanent surplus of bicycles. 
A)  a temporary surplus of bicycles. 
B)  a shift in the demand curve for bicycles. 
C)  an increase in the price of a bicycle. 
D)  a permanent surplus of bicycles.

Question 18

"If the price of crude oil falls, the demand for gasoline will increase, so people will by more gas and the price of gas will go up." Is this statement true or false? Explain.

Accepted Answer

The analysis is false. If the price of c

Question 19

You can buy a season ticket to the Metropolitan Opera for $800. A season ticket plan to see the New York Knicks is $1600. Which of the following is a correct statement?

Accepted Answer

A)  The relative price of an opera ticket is $800. 
B)  the money price of a Knicks ticket is 2 opera tickets. 
C)  The money price of opera tickets is 1/2 of a Knicks ticket. 
D)  The opportunity cost of a Knicks ticket is 2 opera tickets. 
A)  The relative price of an opera ticket is $800. 
B)  the money price of a Knicks ticket is 2 opera tickets. 
C)  The money price of opera tickets is 1/2 of a Knicks ticket. 
D)  The opportunity cost of a Knicks ticket is 2 opera tickets.

Question 20

The relative price of a good is greater than the money price of a good.

Accepted Answer

A) True 
 B)False

When the price of a pizza decreases from $14 to $12,

In March, the quantity of orange juice sold in the town of Jackson was 3000 cartons and the price $3. In May, the quantity of orange juice sold in the town of Jackson was 3500 cartons and the price was $3)20. This change in the price and quantity sold could have been the result of

Demands differ from wants because

Which of the following influences does NOT shift the supply curve?

Which of the following always raises the equilibrium price?

The price of a bag of corn chips is $3, and the price of a bottle of soda is $1. What is the relative price of a bag of corn chips?

If the demand curve for bottled water shifts leftward and the supply curve of bottled water shifts leftward, the equilibrium

A supply curve is also a maximum- supply- price curve.

-Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. What of the following could result in a movement to point b?

Which of the following influences people's buying plans and does not shift the demand curve?

When demand decreases and supply does not change, the equilibrium price and the equilibrium quantity .

If the U.S. Surgeon General announces that increased wheat consumption could cause heightened anxiety levels among children and adults, what happens to the equilibrium price and quantity of shredded wheat?

In the market for magazines, the "income effect" means that

The ABC Music club charges a price of $16 for a CD and $8 for a cassette. Both CDs and cassettes are normal goods. If the ABC Music club increases the price of a CD to $18, everything else remaining the same, the

An economist says: "The supply curve has two interpretations." What does the economist mean?

Bicycles are made out of steel. If the price of steel increases, there is a shift in the supply curve of bicycles that leads to

"If the price of crude oil falls, the demand for gasoline will increase, so people will by more gas and the price of gas will go up." Is this statement true or false? Explain.

You can buy a season ticket to the Metropolitan Opera for $800. A season ticket plan to see the New York Knicks is $1600. Which of the following is a correct statement?

The relative price of a good is greater than the money price of a good.

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

When the price of a pizza decreases from $14 to $12,

In March, the quantity of orange juice sold in the town of Jackson was 3000 cartons and the price $3. In May, the quantity of orange juice sold in the town of Jackson was 3500 cartons and the price was $3)20. This change in the price and quantity sold could have been the result of

Demands differ from wants because

Which of the following influences does NOT shift the supply curve?

Which of the following always raises the equilibrium price?

The price of a bag of corn chips is $3, and the price of a bottle of soda is $1. What is the relative price of a bag of corn chips?

If the demand curve for bottled water shifts leftward and the supply curve of bottled water shifts leftward, the equilibrium

A supply curve is also a maximum- supply- price curve.

-Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. What of the following could result in a movement to point b?

Which of the following influences people's buying plans and does not shift the demand curve?

When demand decreases and supply does not change, the equilibrium price and the equilibrium quantity .

If the U.S. Surgeon General announces that increased wheat consumption could cause heightened anxiety levels among children and adults, what happens to the equilibrium price and quantity of shredded wheat?

In the market for magazines, the "income effect" means that

The ABC Music club charges a price of $16 for a CD and $8 for a cassette. Both CDs and cassettes are normal goods. If the ABC Music club increases the price of a CD to $18, everything else remaining the same, the

An economist says: "The supply curve has two interpretations." What does the economist mean?

Bicycles are made out of steel. If the price of steel increases, there is a shift in the supply curve of bicycles that leads to

"If the price of crude oil falls, the demand for gasoline will increase, so people will by more gas and the price of gas will go up." Is this statement true or false? Explain.

You can buy a season ticket to the Metropolitan Opera for $800. A season ticket plan to see the New York Knicks is $1600. Which of the following is a correct statement?

The relative price of a good is greater than the money price of a good.

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