Question 1

An increase in price results in increase in supply but not an increase in the quantity supplied.

Accepted Answer

A) True 
 B)False

Question 2

Between 2000 and 2010, the price of a PC fell and the quantity of PCs sold increased. Which of the explanations below is consistent with these facts?

Accepted Answer

A)  The demand for PCs decreased by more than the supply of PCs increased. 
B)  Both the supply of PCs and the demand for PCs decreased. 
C)  The demand for PCs increased by more then the supply of PCs increased. 
D)  The supply of PCs increased by more than the demand for PCs increased. 
A)  The demand for PCs decreased by more than the supply of PCs increased. 
B)  Both the supply of PCs and the demand for PCs decreased. 
C)  The demand for PCs increased by more then the supply of PCs increased. 
D)  The supply of PCs increased by more than the demand for PCs increased.

Question 3

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 bottle of soda?

Accepted Answer

A)  1/3 bag of corn chips per bottle of soda 
B)  $3 
C)  3 bags of corn chips per bottle of soda 
D)  33¢ 
A)  1/3 bag of corn chips per bottle of soda 
B)  $3 
C)  3 bags of corn chips per bottle of soda 
D)  33¢

Question 4

The initial supply and demand curves for a good are illustrated in the above figure. If there are technological advances in the production of the good, then the new equilibrium price for the good

Accepted Answer

A)  is $6. 
B)  is less than $6. 
C)  is more than $6. 
D)  could be less than, equal to, or more than $6. 
A)  is $6. 
B)  is less than $6. 
C)  is more than $6. 
D)  could be less than, equal to, or more than $6.

Question 5

-The figure above shows the market for airline tickets. If airline tickets are a normal good, then the recession in 2008 that caused peopleʹs incomes to decrease lead to a shift from

Accepted Answer

A)  S1 to S0. 
B)  D1 to D0. 
C)  S0 to S1. 
D)  D0 to D1. 
A)  S1 to S0. 
B)  D1 to D0. 
C)  S0 to S1. 
D)  D0 to D1.

Question 6

Using supply-and-demand diagrams, show and explain the effects of the following events on the price of CD-Rs and the quantity of CD-Rs sold. For each event, identify which of the determinants of demand or supply is affected, how it influences demand or supply, and what happens to the equilibrium price and quantity.
a) The price of a CD burner falls.
b) Workers who make CD-Rs get a pay raise.
c) Producers introduce new cost-saving technologies in their CD-R production plants.
d) Consumersʹ incomes increase and CD-Rs are a normal good.
e) Free peer-to-peer music exchange through the Internet becomes legal.

Accepted Answer

The figure above shows the effect of fal

Question 7

For a ʺchange in the quantity suppliedʺ but not ʺa change in supplyʺ to occur, there must be a

Accepted Answer

A)  rightward shift of the supply curve. 
B)  rightward shift of the demand curve. 
C)  leftward shift of the demand curve. 
D)  Both answers B and C are correct. 
A)  rightward shift of the supply curve. 
B)  rightward shift of the demand curve. 
C)  leftward shift of the demand curve. 
D)  Both answers B and C are correct.

Question 8

A shortage causes the

Accepted Answer

A)  price to fall. 
B)  price to rise. 
C)  supply curve to shift rightward. 
D)  demand curve to shift leftward. 
A)  price to fall. 
B)  price to rise. 
C)  supply curve to shift rightward. 
D)  demand curve to shift leftward.

Question 9

-In the above figure, a change in quantity supplied with unchanged supply is represented by a movement from

Accepted Answer

A)  point a to point e. 
B)  point e to point c. 
C)  point b to point e. 
D)  point b to point a. 
A)  point a to point e. 
B)  point e to point c. 
C)  point b to point e. 
D)  point b to point a.

Question 10

-The figure above shows the demand for fruit snacks. Which movement reflects a decrease in quantity demanded but NOT a decrease in demand?

Accepted Answer

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

Question 11

A demand curve is also a willingness-and-ability-to-pay curve.

Accepted Answer

A) True 
 B)False

Question 12

Sweatshirts and tee-shirts are complements in consumption and the price of a sweatshirt increases. As a result, the demand for

Accepted Answer

A)  tee-shirts will decrease that is, the demand curve will shift leftward. 
B)  sweatshirts will increase that is, the demand curve will shift rightward. 
C)  sweatshirts will decrease that is, the demand curve will shift leftward. 
D)  tee-shirts will increase that is, the demand curve will shift rightward. 
A)  tee-shirts will decrease that is, the demand curve will shift leftward. 
B)  sweatshirts will increase that is, the demand curve will shift rightward. 
C)  sweatshirts will decrease that is, the demand curve will shift leftward. 
D)  tee-shirts will increase that is, the demand curve will shift rightward.

Question 13

When the price of a normal good falls, the substitution effect leads to __________in the quantity purchased and the income effect leads to__________ in the quantity purchased.

Accepted Answer

A)  an increase; an increase 
B)  a decrease; a decrease 
C)  a decrease; an increase 
D)  an increase; a decrease 
A)  an increase; an increase 
B)  a decrease; a decrease 
C)  a decrease; an increase 
D)  an increase; a decrease

Question 14

When the price of a good is

Accepted Answer

A)  below the equilibrium price, quantity supplied exceeds quantity demanded and price rises. 
B)  above the equilibrium price, quantity demanded exceeds quantity supplied and price rises. 
C)  above the equilibrium price, quantity supplied exceeds quantity demanded and price falls. 
D)  below the equilibrium price, quantity demanded exceeds quantity supplied and price falls. 
A)  below the equilibrium price, quantity supplied exceeds quantity demanded and price rises. 
B)  above the equilibrium price, quantity demanded exceeds quantity supplied and price rises. 
C)  above the equilibrium price, quantity supplied exceeds quantity demanded and price falls. 
D)  below the equilibrium price, quantity demanded exceeds quantity supplied and price falls.

Question 15

Beef is a normal good and peopleʹs incomes fall. At the same time a bumper corn crop reduces the cost of feeding steers. These changes result in

Accepted Answer

A)  no change in the equilibrium quantity of beef. 
B)  an increase in the equilibrium quantity of beef. 
C)  an increase in the equilibrium quantity of beef if the shift in the demand curve is larger than the shift in the supply curve. 
D)  an increase in the equilibrium quantity of beef if the shift in the demand curve is smaller than the shift in the supply curve. 
A)  no change in the equilibrium quantity of beef. 
B)  an increase in the equilibrium quantity of beef. 
C)  an increase in the equilibrium quantity of beef if the shift in the demand curve is larger than the shift in the supply curve. 
D)  an increase in the equilibrium quantity of beef if the shift in the demand curve is smaller than the shift in the supply curve.

Question 16

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

Question 17

How does an unusually warm winter affect the equilibrium price and quantity of gloves?

Accepted Answer

A)  It lowers the price and increases the quantity. 
B)  It lowers both the price and the quantity. 
C)  It raises the price and decreases the quantity. 
D)  It raises both the price and the quantity. 
A)  It lowers the price and increases the quantity. 
B)  It lowers both the price and the quantity. 
C)  It raises the price and decreases the quantity. 
D)  It raises both the price and the quantity.

Question 18

The price of cereal rises. As a result, people have cereal for breakfast on fewer days and eat eggs instead. This behavior is an example of

Accepted Answer

A)  an increase in the quantity demanded of eggs because of the income effect. 
B)  a decrease in the quantity supplied of cereal because of the substitution effect. 
C)  a decrease in the quantity demanded of cereal because of the substitution effect. 
D)  an increase in the quantity supplied of eggs because of the income effect. 
A)  an increase in the quantity demanded of eggs because of the income effect. 
B)  a decrease in the quantity supplied of cereal because of the substitution effect. 
C)  a decrease in the quantity demanded of cereal because of the substitution effect. 
D)  an increase in the quantity supplied of eggs because of the income effect.

Question 19

When demand increases, the equilibrium price and the equilibrium quantity .

Accepted Answer

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

Question 20

The supply curve slopes upward when graphed against ,__________ because of____________ .

Accepted Answer

A)  the price of the good; increasing marginal cost 
B)  income; decreasing marginal cost 
C)  income; increasing marginal cost 
D)  the price of the good; decreasing marginal cost 
A)  the price of the good; increasing marginal cost 
B)  income; decreasing marginal cost 
C)  income; increasing marginal cost 
D)  the price of the good; decreasing marginal cost

An increase in price results in increase in supply but not an increase in the quantity supplied.

Between 2000 and 2010, the price of a PC fell and the quantity of PCs sold increased. Which of the explanations below is consistent with these facts?

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 bottle of soda?

The initial supply and demand curves for a good are illustrated in the above figure. If there are technological advances in the production of the good, then the new equilibrium price for the good

-The figure above shows the market for airline tickets. If airline tickets are a normal good, then the recession in 2008 that caused peopleʹs incomes to decrease lead to a shift from

For a ʺchange in the quantity suppliedʺ but not ʺa change in supplyʺ to occur, there must be a

A shortage causes the

-In the above figure, a change in quantity supplied with unchanged supply is represented by a movement from

-The figure above shows the demand for fruit snacks. Which movement reflects a decrease in quantity demanded but NOT a decrease in demand?

A demand curve is also a willingness-and-ability-to-pay curve.

Sweatshirts and tee-shirts are complements in consumption and the price of a sweatshirt increases. As a result, the demand for

When the price of a normal good falls, the substitution effect leads to in the quantity purchased and the income effect leads to in the quantity purchased.

When the price of a good is

Beef is a normal good and peopleʹs incomes fall. At the same time a bumper corn crop reduces the cost of feeding steers. These changes result in

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

How does an unusually warm winter affect the equilibrium price and quantity of gloves?

The price of cereal rises. As a result, people have cereal for breakfast on fewer days and eat eggs instead. This behavior is an example of

When demand increases, the equilibrium price and the equilibrium quantity .

The supply curve slopes upward when graphed against , because of__ .

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

An increase in price results in increase in supply but not an increase in the quantity supplied.

Between 2000 and 2010, the price of a PC fell and the quantity of PCs sold increased. Which of the explanations below is consistent with these facts?

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 bottle of soda?

The initial supply and demand curves for a good are illustrated in the above figure. If there are technological advances in the production of the good, then the new equilibrium price for the good

-The figure above shows the market for airline tickets. If airline tickets are a normal good, then the recession in 2008 that caused peopleʹs incomes to decrease lead to a shift from

For a ʺchange in the quantity suppliedʺ but not ʺa change in supplyʺ to occur, there must be a

A shortage causes the

-In the above figure, a change in quantity supplied with unchanged supply is represented by a movement from

-The figure above shows the demand for fruit snacks. Which movement reflects a decrease in quantity demanded but NOT a decrease in demand?

A demand curve is also a willingness-and-ability-to-pay curve.

Sweatshirts and tee-shirts are complements in consumption and the price of a sweatshirt increases. As a result, the demand for

When the price of a normal good falls, the substitution effect leads to __________in the quantity purchased and the income effect leads to__________ in the quantity purchased.

When the price of a good is

Beef is a normal good and peopleʹs incomes fall. At the same time a bumper corn crop reduces the cost of feeding steers. These changes result in

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

How does an unusually warm winter affect the equilibrium price and quantity of gloves?

The price of cereal rises. As a result, people have cereal for breakfast on fewer days and eat eggs instead. This behavior is an example of

When demand increases, the equilibrium price and the equilibrium quantity .

The supply curve slopes upward when graphed against ,__________ because of____________ .

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

When the price of a normal good falls, the substitution effect leads to in the quantity purchased and the income effect leads to in the quantity purchased.

The supply curve slopes upward when graphed against , because of__ .