Question 1

-Using the above figure, suppose that roses are a normal good. If there is an increase in income,

Accepted Answer

A)  we cannot predict what will happen to the equilibrium price. 
B)  the equilibrium quantity will decrease below 10 dozen roses. 
C)  we cannot predict what will happen to the equilibrium quantity. 
D)  the equilibrium price will rise above $25 per dozen roses. 
A)  we cannot predict what will happen to the equilibrium price. 
B)  the equilibrium quantity will decrease below 10 dozen roses. 
C)  we cannot predict what will happen to the equilibrium quantity. 
D)  the equilibrium price will rise above $25 per dozen roses.

Question 2

-In the figure above, which movement reflects an increase in the price of a complement for fruit snacks?

Accepted Answer

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

Question 3

If both demand and supply increase, what will be the effect on the equilibrium price and quantity?

Accepted Answer

A)  The price will fall but the quantity will increase. 
B)  Both the price and the quantity will increase. 
C)  The quantity will increase but the price could either rise, fall, or remain the same. 
D)  The price will rise but the quantity could either increase, decrease, or remain the same. 
A)  The price will fall but the quantity will increase. 
B)  Both the price and the quantity will increase. 
C)  The quantity will increase but the price could either rise, fall, or remain the same. 
D)  The price will rise but the quantity could either increase, decrease, or remain the same.

Question 4

Soft drinks and milk are substitutes for consumers. Draw a graph showing the effect of an increase in the price of milk on the demand for soft drinks.

Accepted Answer

@#IMG-DLM& The increase in the price of

Question 5

A rise in the price of a good causes producers to supply more of the good. This statement illustrates

Accepted Answer

A)  the law of supply. 
B)  the law of demand. 
C)  the nature of an inferior good. 
D)  a change in supply. 
A)  the law of supply. 
B)  the law of demand. 
C)  the nature of an inferior good. 
D)  a change in supply.

Question 6

The wage rate paid by Walkman producers falls and at the same time the price of raw materials used in the production of Walkmans rises. You predict that the supply curve of Walkmans will

Accepted Answer

A)  surely shift leftward. 
B)  surely become steeper. 
C)  shift either leftward or rightward. 
D)  surely shift rightward. 
A)  surely shift leftward. 
B)  surely become steeper. 
C)  shift either leftward or rightward. 
D)  surely shift rightward.

Question 7

-Refer to the table above. Suppose that in normal years demand is represented by Case 2 and supply is represented by Case B. If it is discovered that wapanzo beans help prevent cancer then supply will _ _ and demand will _.

Accepted Answer

A)  stay at case B; become case 1 
B)  become case C; become case 1 
C)  become case A; become case 1 
D)  become case C; stay at case 2 
A)  stay at case B; become case 1 
B)  become case C; become case 1 
C)  become case A; become case 1 
D)  become case C; stay at case 2

Question 8

A relative price is

Accepted Answer

A)  equal to a money price. 
B)  what you get paid for babysitting your cousin. 
C)  the ratio of one money price to another. 
D)  a price expressed in terms of money. 
A)  equal to a money price. 
B)  what you get paid for babysitting your cousin. 
C)  the ratio of one money price to another. 
D)  a price expressed in terms of money.

Question 9

A surplus occurs when the price is

Accepted Answer

A)  greater than the equilibrium price. 
B)  equal to the equilibrium price. 
C)  less than the equilibrium price. 
D)  None of the above because the existence of a surplus is independent of the price of the good. 
A)  greater than the equilibrium price. 
B)  equal to the equilibrium price. 
C)  less than the equilibrium price. 
D)  None of the above because the existence of a surplus is independent of the price of the good.

Question 10

-The above figures show the market for hamburger meat. Which figure(s) shows the effect of a nation- wide strike by butchers and meat- packers?

Accepted Answer

A)  Figure B 
B)  Figure C 
C)  Figure D 
D)  Figures B and C 
A)  Figure B 
B)  Figure C 
C)  Figure D 
D)  Figures B and C

Question 11

If the price of a video rental is below its equilibrium price, there will be a _ of video rentals and the price will .

Accepted Answer

A)  surplus; fall 
B)  shortage; fall 
C)  surplus; rise 
D)  shortage; rise 
A)  surplus; fall 
B)  shortage; fall 
C)  surplus; rise 
D)  shortage; rise

Question 12

If a market is NOT in equilibrium, then which of the following is likely to occur?

Accepted Answer

A)  The demand curve will shift to bring the market to equilibrium. 
B)  The price will adjust to bring the market to equilibrium. 
C)  The supply curve will shift to bring the market to equilibrium. 
D)  Both A and B are correct. 
A)  The demand curve will shift to bring the market to equilibrium. 
B)  The price will adjust to bring the market to equilibrium. 
C)  The supply curve will shift to bring the market to equilibrium. 
D)  Both A and B are correct.

Question 13

Inferior goods are those for which demand increases as

Accepted Answer

A)  the price of a substitute rises. 
B)  income decreases. 
C)  income increases. 
D)  the price of a substitute falls. 
A)  the price of a substitute rises. 
B)  income decreases. 
C)  income increases. 
D)  the price of a substitute falls.

Question 14

When a market is in equilibrium

Accepted Answer

A)  there is no automatic tendency for either the supply curve or the demand curve to shift. 
B)  there is a shortage at the existing price. 
C)  there might be a surplus at the existing price. 
D)  None of the above answers are correct. 
A)  there is no automatic tendency for either the supply curve or the demand curve to shift. 
B)  there is a shortage at the existing price. 
C)  there might be a surplus at the existing price. 
D)  None of the above answers are correct.

Question 15

If shoes rise in price, the demand curve for shoes and the quantity of shoes demanded
)

Accepted Answer

A)  shifts leftward; does not change 
B)  shifts leftward; decreases 
C)  does not shift; decreases 
D)  does not shift; does not change 
A)  shifts leftward; does not change 
B)  shifts leftward; decreases 
C)  does not shift; decreases 
D)  does not shift; does not change

Question 16

When the demand for blue jeans increases, what happens next?

Accepted Answer

If the demand for blue jeans increases,

Question 17

-In the figure above, if the price is $8 a unit, is there a shortage or surplus and what is the amount of any shortage or surplus? What is the equilibrium price and quantity?

Accepted Answer

At a price of $8 there is a surplus beca

Question 18

-Consider the figure above showing supply curves for soft drinks. Suppose the economy is at point
A. A movement to point b could be the result of

Accepted Answer

A)  a decrease in the relative price of a soft drink. 
B)  an increase in the money price of a soft drink. 
C)  an increase in technology. 
D)  an increase in the relative price of a soft drink. 
A)  a decrease in the relative price of a soft drink. 
B)  an increase in the money price of a soft drink. 
C)  an increase in technology. 
D)  an increase in the relative price of a soft drink.

Question 19

A normal good is a good for which demand

Accepted Answer

A)  increases when income increases. 
B)  decreases when population increases. 
C)  increases when population increases. 
D)  decreases when income increases. 
A)  increases when income increases. 
B)  decreases when population increases. 
C)  increases when population increases. 
D)  decreases when income increases.

Question 20

Which of the following shifts the demand curve for DVD rentals rightward?

Accepted Answer

A)  a decrease in the price of DVD rentals 
B)  a decrease in the price of cable TV service 
C)  a decrease in the price of renting video cassette (VCR) tapes 
D)  a decrease in the price of DVD players 
A)  a decrease in the price of DVD rentals 
B)  a decrease in the price of cable TV service 
C)  a decrease in the price of renting video cassette (VCR) tapes 
D)  a decrease in the price of DVD players

-Using the above figure, suppose that roses are a normal good. If there is an increase in income,

-In the figure above, which movement reflects an increase in the price of a complement for fruit snacks?

If both demand and supply increase, what will be the effect on the equilibrium price and quantity?

Soft drinks and milk are substitutes for consumers. Draw a graph showing the effect of an increase in the price of milk on the demand for soft drinks.

A rise in the price of a good causes producers to supply more of the good. This statement illustrates

The wage rate paid by Walkman producers falls and at the same time the price of raw materials used in the production of Walkmans rises. You predict that the supply curve of Walkmans will

-Refer to the table above. Suppose that in normal years demand is represented by Case 2 and supply is represented by Case B. If it is discovered that wapanzo beans help prevent cancer then supply will _ _ and demand will _.

A relative price is

A surplus occurs when the price is

-The above figures show the market for hamburger meat. Which figure(s) shows the effect of a nation- wide strike by butchers and meat- packers?

If the price of a video rental is below its equilibrium price, there will be a _ of video rentals and the price will .

If a market is NOT in equilibrium, then which of the following is likely to occur?

Inferior goods are those for which demand increases as

When a market is in equilibrium

If shoes rise in price, the demand curve for shoes and the quantity of shoes demanded )

When the demand for blue jeans increases, what happens next?

-In the figure above, if the price is $8 a unit, is there a shortage or surplus and what is the amount of any shortage or surplus? What is the equilibrium price and quantity?

-Consider the figure above showing supply curves for soft drinks. Suppose the economy is at point A. A movement to point b could be the result of

A normal good is a good for which demand

Which of the following shifts the demand curve for DVD rentals rightward?

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

-Using the above figure, suppose that roses are a normal good. If there is an increase in income,

-In the figure above, which movement reflects an increase in the price of a complement for fruit snacks?

If both demand and supply increase, what will be the effect on the equilibrium price and quantity?

Soft drinks and milk are substitutes for consumers. Draw a graph showing the effect of an increase in the price of milk on the demand for soft drinks.

A rise in the price of a good causes producers to supply more of the good. This statement illustrates

The wage rate paid by Walkman producers falls and at the same time the price of raw materials used in the production of Walkmans rises. You predict that the supply curve of Walkmans will

-Refer to the table above. Suppose that in normal years demand is represented by Case 2 and supply is represented by Case B. If it is discovered that wapanzo beans help prevent cancer then supply will _ _ and demand will _.

A relative price is

A surplus occurs when the price is

-The above figures show the market for hamburger meat. Which figure(s) shows the effect of a nation- wide strike by butchers and meat- packers?

If the price of a video rental is below its equilibrium price, there will be a _ of video rentals and the price will .

If a market is NOT in equilibrium, then which of the following is likely to occur?

Inferior goods are those for which demand increases as

When a market is in equilibrium

If shoes rise in price, the demand curve for shoes and the quantity of shoes demanded )

When the demand for blue jeans increases, what happens next?

-In the figure above, if the price is $8 a unit, is there a shortage or surplus and what is the amount of any shortage or surplus? What is the equilibrium price and quantity?

-Consider the figure above showing supply curves for soft drinks. Suppose the economy is at point A. A movement to point b could be the result of

A normal good is a good for which demand

Which of the following shifts the demand curve for DVD rentals rightward?

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