Question 1

Gruel is an inferior good. Hence, a decrease in peopleʹs incomes

Accepted Answer

A)  decreases the quantity of gruel supplied. 
B)  shifts the demand curve for gruel leftward. 
C)  shifts the demand curve for gruel rightward. 
D)  shifts the supply curve of gruel leftward. 
A)  decreases the quantity of gruel supplied. 
B)  shifts the demand curve for gruel leftward. 
C)  shifts the demand curve for gruel rightward. 
D)  shifts the supply curve of gruel leftward.

Question 2

For consumers, goods A and B are complementary goods. The cost of a resource used in the production of A decreases. As a result,

Accepted Answer

A)  the equilibrium price of B will fall and the equilibrium price of A will rise. 
B)  the equilibrium prices of both A and B will fall. 
C)  the equilibrium prices of both A and B will rise. 
D)  the equilibrium price of B will rise and the equilibrium price of A will fall. 
A)  the equilibrium price of B will fall and the equilibrium price of A will rise. 
B)  the equilibrium prices of both A and B will fall. 
C)  the equilibrium prices of both A and B will rise. 
D)  the equilibrium price of B will rise and the equilibrium price of A will fall.

Question 3

-The above figure shows the market for pizza. Which figure shows the effect of an increase in the price of the tomato sauce used to produce pizza?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D

Question 4

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

Question 5

$$\begin{array} { | l | l | l | } 
\hline \begin{array} { l } 
\text { Price } \
\text { (dollars per } \
\text { pound of } \
\text { cat food) }
\end{array} & \begin{array} { l } 
\text { Quantity } \
\text { demanded } \
\text { (tons of cat } \
\text { food per } \
\text { year) }
\end{array} & \begin{array} { l } 
\text { Quantity } \
\text { supplied } \
\text { (tons of cat } \
\text { food per } \
\text { year) }
\end{array} \
\hline 1.00 & 52 & 15 \
\hline 1.50 & 46 & 26 \
\hline 2.00 & 43 & 34 \
\hline 2.50 & 40 & 30 \
\hline 3.00 & 35 & 44 \
\hline
\end{array}$$
-The above table gives the demand and supply schedules for cat food. If the supply increases by 20 tons at every price, what is the new equilibrium price and quantity?

Accepted Answer

The equilibrium price is $1.50 per pound

Question 6

Which of the following explains why supply curves slope upward?

Accepted Answer

A)  increasing marginal cost 
B)  resources and technology 
C)  prices and income 
D)  substitutes in production and complements in production 
A)  increasing marginal cost 
B)  resources and technology 
C)  prices and income 
D)  substitutes in production and complements in production

Question 7

If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 8,000 per year, there is a ____________in the market and the price will _________.

Accepted Answer

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

Question 8

Which of the following shifts the supply curve for gasoline rightward?

Accepted Answer

A)  an increase in the demand for gas-guzzling, sport utility vehicles 
B)  a decrease in the price of a resource used to produce gasoline, such as crude oil 
C)  an increase in the price of gasoline 
D)  a situation in which the quantity demanded exceeds the quantity supplied 
A)  an increase in the demand for gas-guzzling, sport utility vehicles 
B)  a decrease in the price of a resource used to produce gasoline, such as crude oil 
C)  an increase in the price of gasoline 
D)  a situation in which the quantity demanded exceeds the quantity supplied

Question 9

When does a shortage occur?

Accepted Answer

A shortage occurs when the pri

Question 10

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 11

-The above figures show the market for gasoline. Which figures) shows the effect of a new U.S. tax on oil that suppliers must pay?

Accepted Answer

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

Question 12

If the demand and supply curves are described by the following equations P=a-bQ and P=c+dQ, respectively, the equilibrium price is P*=ad+bc)/b+d) .

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements is correct?

Accepted Answer

A)  When demand increases, both the price and the quantity increase. 
B)  When supply decreases, both the price and the quantity decrease. 
C)  When supply increases, the quantity decreases and the price rises. 
D)  When demand decreases, the price rises and the quantity decreases. 
A)  When demand increases, both the price and the quantity increase. 
B)  When supply decreases, both the price and the quantity decrease. 
C)  When supply increases, the quantity decreases and the price rises. 
D)  When demand decreases, the price rises and the quantity decreases.

Question 14

Your friend Tony opened a pizzeria. You helped him to advertise his pizza, which is in fact the best pizza in town. As a result, the demand for Tonyʹs pizza increases and your friend, noticing lines of customers, raises the price of his pizza. But then he fears that the higher price will cause demand to decline, which will cause the price to drop. Is Tony right in his analysis of the situation? Explain.

Accepted Answer

Tony is confusing a change in demand a s

Question 15

When peopleʹs incomes increase, the demand for a good increases. The good is called

Accepted Answer

A)  a complement. 
B)  a normal good. 
C)  an inferior good. 
D)  a substitute. 
A)  a complement. 
B)  a normal good. 
C)  an inferior good. 
D)  a substitute.

Question 16

-Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. An increase in the price of a soda results in a movement to a point such as

Accepted Answer

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

Question 17

Ticket scalpers at the NCAA basketball tournament last year charged prices high above the printed ticket price. This observation is evidence of

Accepted Answer

A)  the tournament getting too much television exposure. 
B)  a shortage at printed ticket prices. 
C)  the tournament not being televised. 
D)  a surplus at printed ticket prices. 
A)  the tournament getting too much television exposure. 
B)  a shortage at printed ticket prices. 
C)  the tournament not being televised. 
D)  a surplus at printed ticket prices.

Question 18

Which of the following increases the equilibrium price of a used car and decreases the equilibrium quantity?

Accepted Answer

A)  new federal legislation that raises the legal driving age to twenty-four in all states 
B)  a new fee that used car dealers must pay to the government on all sales of used cars 
C)  an announcement by the U.S. Attorney General that the windows on older cars were made with cheaper glass that can explode at high speeds 
D)  All of the above because each is consistent with the ʺlaw of demand.ʺ 
A)  new federal legislation that raises the legal driving age to twenty-four in all states 
B)  a new fee that used car dealers must pay to the government on all sales of used cars 
C)  an announcement by the U.S. Attorney General that the windows on older cars were made with cheaper glass that can explode at high speeds 
D)  All of the above because each is consistent with the ʺlaw of demand.ʺ

Question 19

-In the above figure, if D2 is the original demand curve and the price of a substitute in consumption rises, which price and quantity might result?

Accepted Answer

A)  point a, with price P2 and quantity Q2  
B)  point b, with price P1 and quantity Q1 
C)  point c, with price P3 and quantity Q3  
D)  point d, with price P1 and quantity Q3 
A)  point a, with price P2 and quantity Q2  
B)  point b, with price P1 and quantity Q1 
C)  point c, with price P3 and quantity Q3  
D)  point d, with price P1 and quantity Q3

Question 20

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

Accepted Answer

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

Gruel is an inferior good. Hence, a decrease in peopleʹs incomes

For consumers, goods A and B are complementary goods. The cost of a resource used in the production of A decreases. As a result,

-The above figure shows the market for pizza. Which figure shows the effect of an increase in the price of the tomato sauce used to produce pizza?

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?

Which of the following explains why supply curves slope upward?

If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 8,000 per year, there is a ____in the market and the price will _.

Which of the following shifts the supply curve for gasoline rightward?

When does a shortage occur?

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

-The above figures show the market for gasoline. Which figures) shows the effect of a new U.S. tax on oil that suppliers must pay?

If the demand and supply curves are described by the following equations P=a-bQ and P=c+dQ, respectively, the equilibrium price is P*=ad+bc)/b+d) .

Which of the following statements is correct?

When peopleʹs incomes increase, the demand for a good increases. The good is called

-Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. An increase in the price of a soda results in a movement to a point such as

Ticket scalpers at the NCAA basketball tournament last year charged prices high above the printed ticket price. This observation is evidence of

Which of the following increases the equilibrium price of a used car and decreases the equilibrium quantity?

-In the above figure, if D₂is the original demand curve and the price of a substitute in consumption rises, which price and quantity might result?

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

Gruel is an inferior good. Hence, a decrease in peopleʹs incomes

For consumers, goods A and B are complementary goods. The cost of a resource used in the production of A decreases. As a result,

-The above figure shows the market for pizza. Which figure shows the effect of an increase in the price of the tomato sauce used to produce pizza?

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?

Which of the following explains why supply curves slope upward?

If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 8,000 per year, there is a ____________in the market and the price will _________.

Which of the following shifts the supply curve for gasoline rightward?

When does a shortage occur?

If shoes rise in price, the demand curve for shoes ___________and the quantity of shoes demanded________

-The above figures show the market for gasoline. Which figures) shows the effect of a new U.S. tax on oil that suppliers must pay?

If the demand and supply curves are described by the following equations P=a-bQ and P=c+dQ, respectively, the equilibrium price is P*=ad+bc)/b+d) .

Which of the following statements is correct?

When peopleʹs incomes increase, the demand for a good increases. The good is called

-Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. An increase in the price of a soda results in a movement to a point such as

Ticket scalpers at the NCAA basketball tournament last year charged prices high above the printed ticket price. This observation is evidence of

Which of the following increases the equilibrium price of a used car and decreases the equilibrium quantity?

-In the above figure, if D2 is the original demand curve and the price of a substitute in consumption rises, which price and quantity might result?

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

If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 8,000 per year, there is a ____in the market and the price will _.

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

-In the above figure, if D₂is the original demand curve and the price of a substitute in consumption rises, which price and quantity might result?