Question 1

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 2

The Market for Wapanzo Beans

Quantity Demanded $\quad$$\quad$$\quad$$\quad$$\quad$Price $\quad$$\quad$$\quad$Quantity Supplied
(millions of pounds $\quad$$\quad$$\quad$$\quad$$\quad$(dollars per $\quad$(millions of pounds 
peryear) $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ pound)$\quad$$\quad$$\quad$ peryear)
$\begin{array}{|l|l|l|l|l|l|l|l}
\hline \text { Case 1} & \text { Case 2} & \text { Case 3} & & \text { Case A } & \text {Case B} & \text { Case C } \\hline 15 & 10 & 15 & \$ 1 & 1 & 2 & 3 \
\hline 12 & 8 & 4 & \$ 2 & 2 & 4 & 6 \\hline 9 & 6 & 3 & \$ 3 & 3 & 6 & 9 \
\hline 6 & 3 & 2 & \$ 4 & 4 & 8 & 12 \
\hline 3 & 2 & 1 & \$ 5 & 5 & 10 & 15 \
\hline
\end{array}$
-Refer to the table above. Suppose that in normal years demand is represented by Case 2 and supply is represented by Case B. If there is exceptionally good growing weather in the wapanzo bean growing region then supply will__________ and demand will__________ .

Accepted Answer

A)  become case C; become case 3 
B)  become case C; become case 1 
C)  become case C; stay at case 2 
D)  stay at case B; become case 1 
A)  become case C; become case 3 
B)  become case C; become case 1 
C)  become case C; stay at case 2 
D)  stay at case B; become case 1

Question 3

When both the demand for a good increases and the supply of the good increases, the equilibrium quantity definitely increases.

Accepted Answer

A) True 
 B)False

Question 4

-The figure illustrates the market for chairs. If the supply of chairs increases, the price of a chair__________ $40 and the quantity__________ .

Accepted Answer

A)  will fall below; demanded will decrease 
B)  will fall below; demanded will increase 
C)  will rise above; supplied will increase 
D)  will rise above; demanded will decrease 
A)  will fall below; demanded will decrease 
B)  will fall below; demanded will increase 
C)  will rise above; supplied will increase 
D)  will rise above; demanded will decrease

Question 5

-The figure above shows 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 6

When there is a shortage in the market, the quantity sold is

Accepted Answer

A)  less than the quantity bought. 
B)  equal to the quantity supplied. 
C)  greater than the quantity supplied. 
D)  less than the quantity supplied. 
A)  less than the quantity bought. 
B)  equal to the quantity supplied. 
C)  greater than the quantity supplied. 
D)  less than the quantity supplied.

Question 7

-In the above figure, what is the minimum supply price for the fourth gallon of ice cream?

Accepted Answer

A)  $3.00 
B)  $5.00 
C)  $2.00 
D)  $4.00 
A)  $3.00 
B)  $5.00 
C)  $2.00 
D)  $4.00

Question 8

If the price of chocolate chip cookies falls, then

Accepted Answer

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

Question 9

Wants, as opposed to demands,

Accepted Answer

A)  are the goods the consumer plans to acquire. 
B)  are the unlimited desires of the consumer 
C)  depend on the price. 
D)  are the goods the consumer has acquired. 
A)  are the goods the consumer plans to acquire. 
B)  are the unlimited desires of the consumer 
C)  depend on the price. 
D)  are the goods the consumer has acquired.

Question 10

Good A and good B are substitutes in production. The demand for good A decreases, which lowers the price of good A. The decrease in the price of good A

Accepted Answer

A)  increases the supply of good B. 
B)  decreases the demand for good B. 
C)  decreases the supply of good B. 
D)  increases the demand for good B. 
A)  increases the supply of good B. 
B)  decreases the demand for good B. 
C)  decreases the supply of good B. 
D)  increases the demand for good B.

Question 11

Consumers expect that the price of a gallon of gasoline will rise next week. As a result,

Accepted Answer

A)  todayʹs demand for gasoline increases. 
B)  next weekʹs supply of gasoline decreases. 
C)  todayʹs supply of gasoline increases. 
D)  the price of a gallon of gasoline falls today. 
A)  todayʹs demand for gasoline increases. 
B)  next weekʹs supply of gasoline decreases. 
C)  todayʹs supply of gasoline increases. 
D)  the price of a gallon of gasoline falls today.

Question 12

If the market for Twinkies is in equilibrium, then

Accepted Answer

A)  consumers would like to buy more at the current price. 
B)  the quantity supplied equals the quantity demanded. 
C)  producers would like to sell more at the current price. 
D)  Twinkies must be a normal good. 
A)  consumers would like to buy more at the current price. 
B)  the quantity supplied equals the quantity demanded. 
C)  producers would like to sell more at the current price. 
D)  Twinkies must be a normal good.

Question 13

A decrease in the quantity supplied is represented by a

Accepted Answer

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

Question 14

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in income if fruit snacks are an inferior good?

Accepted Answer

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

Question 15

Suppose that the technology used to produce computers advances. How does this change affect the supply of computers and the supply curve of computers?

Accepted Answer

An advance in technology incre

Question 16

$$\begin{array} { | l | l | l | } 
\hline \begin{array} { l } 
\text { Price } \
\text { (dollars per } \
\text { pound) }
\end{array} & \begin{array} { l } 
\text { Quantity } \
\text { supplied } \
\text { (pounds) }
\end{array} & \begin{array} { l } 
\text { Quantity } \
\text { demanded } \
\text { (pounds) }
\end{array} \
\hline 3 & 1 & 7 \
\hline 4 & 2 & 5 \
\hline 5 & 4 & 4 \
\hline 6 & 5 & 2 \
\hline 7 & 6 & 1 \
\hline
\end{array}$$
-The above table shows the demand schedule and supply schedule for chocolate chip cookies. An increase in income results in an increase in the demand for chocolate cookies by an amount of 3 pounds at every price. What are the new equilibrium quantity and equilibrium price?

Accepted Answer

A)  5 pounds, $6.00 per pound 
B)  4 pounds, $5.00 per pound 
C)  5 pounds, $5.00 per pound 
D)  5 pounds, $4.00 per pound 
A)  5 pounds, $6.00 per pound 
B)  4 pounds, $5.00 per pound 
C)  5 pounds, $5.00 per pound 
D)  5 pounds, $4.00 per pound

Question 17

Which of the following is NOT held constant while moving along a supply curve?

Accepted Answer

A)  expected future prices 
B)  prices of factors of production 
C)  the price of the good itself 
D)  the number of sellers 
A)  expected future prices 
B)  prices of factors of production 
C)  the price of the good itself 
D)  the number of sellers

Question 18

Which of the following increases the supply of a product?

Accepted Answer

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

Question 19

When income increases, the demand curve for X shifts rightward and the demand curve for Y
Shifts leftward. These shifts mean that

Accepted Answer

A)  X is an inferior good and Y is a normal good. 
B)  X and Y both normal goods. 
C)  X and Y are complements. 
D)  X is a normal good and Y is an inferior good. 
A)  X is an inferior good and Y is a normal good. 
B)  X and Y both normal goods. 
C)  X and Y are complements. 
D)  X is a normal good and Y is an inferior good.

Question 20

$$\begin{array} { | l | l | l | } 
\hline \begin{array} { l } 
\text { Price } \
\text { (dollars per } \
\text { pound of } \
\text { cat food) }
\end{array} & \begin{array} { l } 
\text { Quantity } \
\text { demanded } \
\text { (tons of cat } \
\text { food per } \
\text { year) }
\end{array} & \begin{array} { l } 
\text { Quantity } \
\text { supplied } \
\text { (tons of cat } \
\text { food per } \
\text { year) }
\end{array} \
\hline 1.00 & 52 & 15 \
\hline 1.50 & 46 & 26 \
\hline 2.00 & 43 & 34 \
\hline 2.50 & 40 & 30 \
\hline 3.00 & 35 & 44 \
\hline
\end{array}$$
-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

The law of demand implies that demand curves

When both the demand for a good increases and the supply of the good increases, the equilibrium quantity definitely increases.

-The figure illustrates the market for chairs. If the supply of chairs increases, the price of a chair $40 and the quantity .

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

When there is a shortage in the market, the quantity sold is

-In the above figure, what is the minimum supply price for the fourth gallon of ice cream?

If the price of chocolate chip cookies falls, then

Wants, as opposed to demands,

Good A and good B are substitutes in production. The demand for good A decreases, which lowers the price of good A. The decrease in the price of good A

Consumers expect that the price of a gallon of gasoline will rise next week. As a result,

If the market for Twinkies is in equilibrium, then

A decrease in the quantity supplied is represented by a

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in income if fruit snacks are an inferior good?

Suppose that the technology used to produce computers advances. How does this change affect the supply of computers and the supply curve of computers?

Which of the following is NOT held constant while moving along a supply curve?

Which of the following increases the supply of a product?

When income increases, the demand curve for X shifts rightward and the demand curve for Y Shifts leftward. These shifts mean that

Price (dollars per pound of cat food) Quantity demanded (tons of cat food per year) Quantity supplied (tons of cat food per year) 1.00 52 15 1.50 46 26 2.00 43 34 2.50 40 30 3.00 35 44 -The above table gives the demand and supply schedules for cat food. What is the equilibrium price and quantity?

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: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

Exam 3: Demand and Supply

The law of demand implies that demand curves

When both the demand for a good increases and the supply of the good increases, the equilibrium quantity definitely increases.

-The figure illustrates the market for chairs. If the supply of chairs increases, the price of a chair__________ $40 and the quantity__________ .

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

When there is a shortage in the market, the quantity sold is

-In the above figure, what is the minimum supply price for the fourth gallon of ice cream?

If the price of chocolate chip cookies falls, then

Wants, as opposed to demands,

Good A and good B are substitutes in production. The demand for good A decreases, which lowers the price of good A. The decrease in the price of good A

Consumers expect that the price of a gallon of gasoline will rise next week. As a result,

If the market for Twinkies is in equilibrium, then

A decrease in the quantity supplied is represented by a

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in income if fruit snacks are an inferior good?

Suppose that the technology used to produce computers advances. How does this change affect the supply of computers and the supply curve of computers?

Which of the following is NOT held constant while moving along a supply curve?

Which of the following increases the supply of a product?

When income increases, the demand curve for X shifts rightward and the demand curve for Y Shifts leftward. These shifts mean that

Price (dollars per pound of cat food) Quantity demanded (tons of cat food per year) Quantity supplied (tons of cat food per year) 1.00 52 15 1.50 46 26 2.00 43 34 2.50 40 30 3.00 35 44 -The above table gives the demand and supply schedules for cat food. What is the equilibrium price and quantity?

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: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

-The figure illustrates the market for chairs. If the supply of chairs increases, the price of a chair $40 and the quantity .