Question 1

Which of the following increases the demand for a normal good?

Accepted Answer

A)  an decrease in the price of a substitute 
B)  a decrease in income 
C)  an increase in the price of a complement 
D)  The price of the good is expected to increase in the future. 
A)  an decrease in the price of a substitute 
B)  a decrease in income 
C)  an increase in the price of a complement 
D)  The price of the good is expected to increase in the future.

Question 2

Which of the following decreases the supply of restaurant meals?

Accepted Answer

A)  The price of movies, a complement to restaurant meals, falls. 
B)  Consumers' incomes increase and restaurant meals are a normal good. 
C)  Waiters get a pay raise. 
D)  The demand for restaurant meals decreases. 
A)  The price of movies, a complement to restaurant meals, falls. 
B)  Consumers' incomes increase and restaurant meals are a normal good. 
C)  Waiters get a pay raise. 
D)  The demand for restaurant meals decreases.

Question 3

In 2007 Nike reduced the price of its running shoes by 20 percent. As a result, the substitution effect caused

Accepted Answer

A)  the demand curve for Nikes to shift rightward. 
B)  people to switch from Adidas shoes and buy more Nikes. 
C)  the demand for Nike shoes to increase. 
D)  the relative price of Nikes to increase. 
A)  the demand curve for Nikes to shift rightward. 
B)  people to switch from Adidas shoes and buy more Nikes. 
C)  the demand for Nike shoes to increase. 
D)  the relative price of Nikes to increase.

Question 4

The price of compact disc players fell over the past decade because a combination of improving technology, rising incomes, and falling prices of compact discs caused the

Accepted Answer

A)  demand curve for compact disc players to shift leftward and the supply curve of compact disc players to shift leftward. 
B)  supply curve of compact disc players to shift rightward and the demand curve for compact disc players to shift leftward. 
C)  demand curve for compact disc players to shift rightward faster than the supply curve of compact disc players shifted rightward. 
D)  supply curve of compact disc players to shift rightward faster than the demand curve for compact disc players shifted rightward. 
A)  demand curve for compact disc players to shift leftward and the supply curve of compact disc players to shift leftward. 
B)  supply curve of compact disc players to shift rightward and the demand curve for compact disc players to shift leftward. 
C)  demand curve for compact disc players to shift rightward faster than the supply curve of compact disc players shifted rightward. 
D)  supply curve of compact disc players to shift rightward faster than the demand curve for compact disc players shifted rightward.

Question 5

What is the effect on the price and quantity of a product if both the demand and supply simultaneously increase?

Accepted Answer

The equilibrium quantity unambiguously i

Question 6

If demand increases and supply decreases, what is the effect on equilibrium price and equilibrium quantity?

Accepted Answer

A)  The quantity increases and the price might rise, fall, or remain the same. 
B)  The price rises and the quantity might increase, decrease or remain the same. 
C)  The price falls and the quantity might increase, decrease, or remain the same. 
D)  The quantity decreases and the price might rise, fall, or remain the same. 
A)  The quantity increases and the price might rise, fall, or remain the same. 
B)  The price rises and the quantity might increase, decrease or remain the same. 
C)  The price falls and the quantity might increase, decrease, or remain the same. 
D)  The quantity decreases and the price might rise, fall, or remain the same.

Question 7

-In the figure above, which movement reflects an increase in income if fruit snacks are an inferior good?

Accepted Answer

A)  from point a to point e 
B)  from point a to point b 
C)  from point a to point d 
D)  from point a to point c 
A)  from point a to point e 
B)  from point a to point b 
C)  from point a to point d 
D)  from point a to point c

Question 8

-The above table gives the demand and supply schedules for cat food. What is the equilibrium price and quantity?

Accepted Answer

The equilibrium price is $2.50

Question 9

Which of the following increases the supply of a product?

Accepted Answer

A)  A smaller number of sellers producing the product. 
B)  An increase in foreign imports of the product. 
C)  Higher taxes imposed upon producers of the product. 
D)  A fall in the price of the product. 
A)  A smaller number of sellers producing the product. 
B)  An increase in foreign imports of the product. 
C)  Higher taxes imposed upon producers of the product. 
D)  A fall in the price of the product.

Question 10

Which of the following explains why demand curves slope downward?

Accepted Answer

A)  substitutes and complements 
B)  prices and income 
C)  resources and technology 
D)  substitution effect and income effect 
A)  substitutes and complements 
B)  prices and income 
C)  resources and technology 
D)  substitution effect and income effect

Question 11

As the price of a pound of peanuts falls, the

Accepted Answer

A)  supply of peanuts increases. 
B)  quantity of peanuts supplied decreases. 
C)  supply of peanuts decreases. 
D)  quantity of peanuts supplied increases. 
A)  supply of peanuts increases. 
B)  quantity of peanuts supplied decreases. 
C)  supply of peanuts decreases. 
D)  quantity of peanuts supplied increases.

Question 12

Suppose Frosty Pops cereal is an inferior good. An increase in income

Accepted Answer

A)  leads to an increase in the demand for Frosty Pops. 
B)  has no income effect. 
C)  has no impact on the demand for Frosty Pops. 
D)  leads to a decrease in the demand for Frosty Pops. 
A)  leads to an increase in the demand for Frosty Pops. 
B)  has no income effect. 
C)  has no impact on the demand for Frosty Pops. 
D)  leads to a decrease in the demand for Frosty Pops.

Question 13

-Consider the figure above showing supply curves for soft drinks. Suppose the economy is at point
A. An increase in the price of a soft drink is shown as a movement from point a to

Accepted Answer

A)  none of the points that are illustrated. 
B)  point b. 
C)  point c. 
D)  point d. 
A)  none of the points that are illustrated. 
B)  point b. 
C)  point c. 
D)  point d.

Question 14

Suppose the price of a football is $20.00 and the price of a basketball is $10.00. The of a football is _.

Accepted Answer

A)  opportunity cost; $20.00 
B)  opportunity cost; $10.00 
C)  relative price; 1/2 basketball 
D)  relative price; 2 basketballs 
A)  opportunity cost; $20.00 
B)  opportunity cost; $10.00 
C)  relative price; 1/2 basketball 
D)  relative price; 2 basketballs

Question 15

In the market for chocolate chip cookies, if the demand decreases while the supply increases, the price definitely falls but the quantity might increase, decrease, or remain the same.

Accepted Answer

A) True 
 B)False

Question 16

"The recent hurricanes in Florida are bringing financial gain to California citrus growers. Due to extensive damage to the Florida citrus crop, California citrus products are commanding their highest prices ever." Which of the following statements best explains the economics of this quotation?

Accepted Answer

A)  The demand for Florida oranges decreased because of the hurricanes, causing a greater demand for California oranges and an increase in the price of California oranges. 
B)  The supply of Florida oranges decreased, causing the supply of California oranges to increase and the price of California oranges to rise. 
C)  The supply of Florida oranges decreased, causing their price to increase, which then increased the demand for substitute California oranges. 
D)  The demand for Florida oranges decreased, causing their prices to rise, therefore increasing the demand for California oranges. 
A)  The demand for Florida oranges decreased because of the hurricanes, causing a greater demand for California oranges and an increase in the price of California oranges. 
B)  The supply of Florida oranges decreased, causing the supply of California oranges to increase and the price of California oranges to rise. 
C)  The supply of Florida oranges decreased, causing their price to increase, which then increased the demand for substitute California oranges. 
D)  The demand for Florida oranges decreased, causing their prices to rise, therefore increasing the demand for California oranges.

Question 17

Students can rent a Blu- ray movie at Campus Video for $4. As the price of Blu- ray players fall, the

Accepted Answer

A)  quantity demanded of Blu- ray movies will increase. 
B)  demand for Blu- ray movies will increase. 
C)  supply of Blu- ray movies will decrease. 
D)  quantity supplied of Blu- ray movies will decrease. 
A)  quantity demanded of Blu- ray movies will increase. 
B)  demand for Blu- ray movies will increase. 
C)  supply of Blu- ray movies will decrease. 
D)  quantity supplied of Blu- ray movies will decrease.

Question 18

Wages for workers producing iPods and similar products will rise next year. Walkman Watch asks you to predict the effect of this change in next year's market for iPods. You predict that the major effect will be that the

Accepted Answer

A)  demand curve for an iPod will shift leftward. 
B)  supply curve for an iPod will shift rightward. 
C)  demand curve for an iPod will shift rightward. 
D)  supply curve for an iPod will shift leftward. 
A)  demand curve for an iPod will shift leftward. 
B)  supply curve for an iPod will shift rightward. 
C)  demand curve for an iPod will shift rightward. 
D)  supply curve for an iPod will shift leftward.

Question 19

Blank DVDs and prerecorded DVDs are substitutes in production. An increase in the price of a blank DVD will lead to

Accepted Answer

A)  an increase in the supply of prerecorded DVDs. 
B)  a decrease in the supply of prerecorded DVDs. 
C)  a decrease in the quantity supplied of prerecorded DVDs but not in the supply of prerecorded DVDs. 
D)  an increase in the quantity supplied of prerecorded DVDs but not in the supply of prerecorded DVDs. 
A)  an increase in the supply of prerecorded DVDs. 
B)  a decrease in the supply of prerecorded DVDs. 
C)  a decrease in the quantity supplied of prerecorded DVDs but not in the supply of prerecorded DVDs. 
D)  an increase in the quantity supplied of prerecorded DVDs but not in the supply of prerecorded DVDs.

Question 20

Scarcity guarantees that

Accepted Answer

A)  demands will exceed wants. 
B)  wants will exceed demands. 
C)  most demands will be satisfied. 
D)  demands will be equal to wants. 
A)  demands will exceed wants. 
B)  wants will exceed demands. 
C)  most demands will be satisfied. 
D)  demands will be equal to wants.

Which of the following increases the demand for a normal good?

Which of the following decreases the supply of restaurant meals?

In 2007 Nike reduced the price of its running shoes by 20 percent. As a result, the substitution effect caused

The price of compact disc players fell over the past decade because a combination of improving technology, rising incomes, and falling prices of compact discs caused the

What is the effect on the price and quantity of a product if both the demand and supply simultaneously increase?

If demand increases and supply decreases, what is the effect on equilibrium price and equilibrium quantity?

-In the figure above, which movement reflects an increase in income if fruit snacks are an inferior good?

-The above table gives the demand and supply schedules for cat food. What is the equilibrium price and quantity?

Which of the following increases the supply of a product?

Which of the following explains why demand curves slope downward?

As the price of a pound of peanuts falls, the

Suppose Frosty Pops cereal is an inferior good. An increase in income

-Consider the figure above showing supply curves for soft drinks. Suppose the economy is at point A. An increase in the price of a soft drink is shown as a movement from point a to

Suppose the price of a football is $20.00 and the price of a basketball is $10.00. The of a football is _.

In the market for chocolate chip cookies, if the demand decreases while the supply increases, the price definitely falls but the quantity might increase, decrease, or remain the same.

"The recent hurricanes in Florida are bringing financial gain to California citrus growers. Due to extensive damage to the Florida citrus crop, California citrus products are commanding their highest prices ever." Which of the following statements best explains the economics of this quotation?

Students can rent a Blu- ray movie at Campus Video for $4. As the price of Blu- ray players fall, the

Wages for workers producing iPods and similar products will rise next year. Walkman Watch asks you to predict the effect of this change in next year's market for iPods. You predict that the major effect will be that the

Blank DVDs and prerecorded DVDs are substitutes in production. An increase in the price of a blank DVD will lead to

Scarcity guarantees that

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

Which of the following increases the demand for a normal good?

Which of the following decreases the supply of restaurant meals?

In 2007 Nike reduced the price of its running shoes by 20 percent. As a result, the substitution effect caused

The price of compact disc players fell over the past decade because a combination of improving technology, rising incomes, and falling prices of compact discs caused the

What is the effect on the price and quantity of a product if both the demand and supply simultaneously increase?

If demand increases and supply decreases, what is the effect on equilibrium price and equilibrium quantity?

-In the figure above, which movement reflects an increase in income if fruit snacks are an inferior good?

-The above table gives the demand and supply schedules for cat food. What is the equilibrium price and quantity?

Which of the following increases the supply of a product?

Which of the following explains why demand curves slope downward?

As the price of a pound of peanuts falls, the

Suppose Frosty Pops cereal is an inferior good. An increase in income

-Consider the figure above showing supply curves for soft drinks. Suppose the economy is at point A. An increase in the price of a soft drink is shown as a movement from point a to

Suppose the price of a football is $20.00 and the price of a basketball is $10.00. The of a football is _.

In the market for chocolate chip cookies, if the demand decreases while the supply increases, the price definitely falls but the quantity might increase, decrease, or remain the same.

"The recent hurricanes in Florida are bringing financial gain to California citrus growers. Due to extensive damage to the Florida citrus crop, California citrus products are commanding their highest prices ever." Which of the following statements best explains the economics of this quotation?

Students can rent a Blu- ray movie at Campus Video for $4. As the price of Blu- ray players fall, the

Wages for workers producing iPods and similar products will rise next year. Walkman Watch asks you to predict the effect of this change in next year's market for iPods. You predict that the major effect will be that the

Blank DVDs and prerecorded DVDs are substitutes in production. An increase in the price of a blank DVD will lead to

Scarcity guarantees that

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