Question 1

Farmers can use their land to grow soy beans or corn. If the price of corn rises,

Accepted Answer

A)  the supply of soybeans increases. 
B)  the supply of corn increases and the corn supply curve shifts rightward. 
C)  the supply of corn increases. 
D)  the supply of soybeans decreases and the soybean supply curve shifts leftward. 
A)  the supply of soybeans increases. 
B)  the supply of corn increases and the corn supply curve shifts rightward. 
C)  the supply of corn increases. 
D)  the supply of soybeans decreases and the soybean supply curve shifts leftward.

Question 2

An increase in demand combined with no change in supply

Accepted Answer

A)  decreases demand because the supply curve does not shift. 
B)  raises the equilibrium price. 
C)  lowers the equilibrium price. 
D)  results in only a movement rightward along the demand curve. 
A)  decreases demand because the supply curve does not shift. 
B)  raises the equilibrium price. 
C)  lowers the equilibrium price. 
D)  results in only a movement rightward along the demand curve.

Question 3

If consumersʹ incomes increase and the demand for bus rides decreases

Accepted Answer

A)  consumers are behaving irrationally. 
B)  bus rides are a normal good. 
C)  bus rides are an inferior good. 
D)  none of the above 
A)  consumers are behaving irrationally. 
B)  bus rides are a normal good. 
C)  bus rides are an inferior good. 
D)  none of the above

Question 4

Which of the following always raises the equilibrium price?

Accepted Answer

A)  an increase in demand combined with a decrease in supply 
B)  an increase in both demand and supply 
C)  a decrease in demand combined with an increase in supply 
D)  a decrease in both demand and supply 
A)  an increase in demand combined with a decrease in supply 
B)  an increase in both demand and supply 
C)  a decrease in demand combined with an increase in supply 
D)  a decrease in both demand and supply

Question 5

If the good in the above figure is a normal good and income rises, then the new equilibrium quantity

Accepted Answer

A)  is 300 units. 
B)  is less than 300 units. 
C)  is more than 300 units. 
D)  could be less than, equal to, or more than 300 units. 
A)  is 300 units. 
B)  is less than 300 units. 
C)  is more than 300 units. 
D)  could be less than, equal to, or more than 300 units.

Question 6

Computers are a complement to computer software. Suppose the price of a computer falls. How does this fall in price affect the demand for computer software and the demand curve for computer software?

Accepted Answer

The fall in the price of a complement in

Question 7

During the 2000s, the price of DVD players fell each year and manufacturers of DVD players produced and sold more DVD players each year. This result is because the

Accepted Answer

A)  ʺlaw of supplyʺ does not apply to companies in the ʺhigh-techʺ sector of the economy. 
B)  demand curve for DVD players shifted leftward. 
C)  supply curve of DVD players shifted rightward. 
D)  ʺlaw of demandʺ does not apply to customers in the ʺhigh -techʺ sector of the economy. 
A)  ʺlaw of supplyʺ does not apply to companies in the ʺhigh-techʺ sector of the economy. 
B)  demand curve for DVD players shifted leftward. 
C)  supply curve of DVD players shifted rightward. 
D)  ʺlaw of demandʺ does not apply to customers in the ʺhigh -techʺ sector of the economy.

Question 8

-Consider the demand curves for soft drinks shown in the figure above. A movement from point a
To point c represents

Accepted Answer

A)  a decrease in quantity demanded. 
B)  a decrease in demand. 
C)  an increase in demand. 
D)  an increase in quantity demanded. 
A)  a decrease in quantity demanded. 
B)  a decrease in demand. 
C)  an increase in demand. 
D)  an increase in quantity demanded.

Question 9

After the sugar substitute saccharin was found to cause cancer in laboratory mice, its price dropped dramatically. This change in the price was because

Accepted Answer

A)  the government ordered the price reduction. 
B)  the demand for saccharin decreased. 
C)  the supply of saccharin decreased. 
D)  saccharin producers felt sorry for their past customers and were making an honest attempt to compensate them. 
A)  the government ordered the price reduction. 
B)  the demand for saccharin decreased. 
C)  the supply of saccharin decreased. 
D)  saccharin producers felt sorry for their past customers and were making an honest attempt to compensate them.

Question 10

Each point on a supply curve represents

Accepted Answer

A)  the lowest price for which a supplier can profitably sell another unit. 
B)  the lowest price buyers will accept per unit of the good. 
C)  the highest price sellers can get for each unit over time. 
D)  the highest price buyers will pay for the good. 
A)  the lowest price for which a supplier can profitably sell another unit. 
B)  the lowest price buyers will accept per unit of the good. 
C)  the highest price sellers can get for each unit over time. 
D)  the highest price buyers will pay for the good.

Question 11

The law of demand states that the quantity of a good demanded varies

Accepted Answer

A)  inversely with its price. 
B)  directly with population. 
C)  inversely with the price of substitute goods. 
D)  directly with income. 
A)  inversely with its price. 
B)  directly with population. 
C)  inversely with the price of substitute goods. 
D)  directly with income.

Question 12

-The above figure shows the market for hamburger. Which panel shows the effect of a new excise tax on all beef products?

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 13

Which of the following results in a movement along the supply curve of spinach but does not shift the supply curve of spinach?

Accepted Answer

A)  An increase in wages for workers in spinach fields. 
B)  A rise in the price of of spinach. 
C)  Disastrous weather that destroys half of this yearʹs spinach crop. 
D)  Great weather that produces a bumper spinach crop this year. 
A)  An increase in wages for workers in spinach fields. 
B)  A rise in the price of of spinach. 
C)  Disastrous weather that destroys half of this yearʹs spinach crop. 
D)  Great weather that produces a bumper spinach crop this year.

Question 14

Kelly graduates and her income increases by $25,000 a year. Other things remaining the same, she increases the quantity of clothes she buys. For Kelly, clothes are .

Accepted Answer

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

Question 15

For ʺan increase in the quantity demandedʺ but not ʺan increase in demandʺ to occur, there must be a

Accepted Answer

A)  rightward shift of the demand curve. 
B)  movement along the demand curve. 
C)  rightward shift of the demand curve and a movement along the demand curve. 
D)  Both answers B and C are correct. 
A)  rightward shift of the demand curve. 
B)  movement along the demand curve. 
C)  rightward shift of the demand curve and a movement along the demand curve. 
D)  Both answers B and C are correct.

Question 16

Joe pays $8,000.00 in tuition. The 8,000 dollar tuition Joe pays is an example of what economists call

Accepted Answer

A)  a money price. 
B)  a relative price. 
C)  an opportunity price. 
D)  an indexed price. 
A)  a money price. 
B)  a relative price. 
C)  an opportunity price. 
D)  an indexed price.

Question 17

A relative price is

Accepted Answer

A)  the number of dollars that must be given up in exchange for the good. 
B)  not an opportunity cost. 
C)  also called the money price. 
D)  the ratio of one price to another price. 
A)  the number of dollars that must be given up in exchange for the good. 
B)  not an opportunity cost. 
C)  also called the money price. 
D)  the ratio of one price to another price.

Question 18

-The above figures show the market for oranges. Which figures) shows the effect of a new government program that provides each public school child with an orange to start the day?

Accepted Answer

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

Question 19

$$\begin{array} { | l | l | l | } 
\hline \begin{array} { l } 
\text { Price (cents } \
\text { pergallon) }
\end{array} & \begin{array} { l } 
\text { Quantity } \
\text { demanded } \
\text { (thousands of } \
\text { gallons per } \
\text { week) }
\end{array} & \begin{array} { l } 
\text { Quantity } \
\text { supplied } \
\text { (thousands of } \
\text { gallons per } \
\text { week) }
\end{array} \
\hline 290 & 80 & 20 \
\hline 300 & 70 & 30 \
\hline 310 & 60 & 40 \
\hline 320 & 50 & 50 \
\hline 330 & 40 & 60 \
\hline 340 & 30 & 70 \
\hline 350 & 20 & 80 \
\hline
\end{array}$$
-A market research team has come up with the demand and supply schedules for gasoline in Motorville in the table above. Use these data to analyze the situation in the market for gas in Motorville.
a) Draw a figure showing the demand curve for gasoline and the supply curve of gasoline. What are the equilibrium price and quantity?
b) Suppose the price is $3.30. Describe the situation in the market and explain how the market adjusts. Now suppose the price is $3.00. Describe the situation in the market and explain how the market adjusts.
c) The market research report also predicts that a rise in the price of crude oil will decrease the quantity of gas supplied by 20,000 gallons a week at each price. Suppose the price of crude oil does rise. Use your figure to show how this will affect the market for gas. How will the market adjust? What will be the new equilibrium price and quantity?

Accepted Answer

See the figure above. The equilibrium pr

Question 20

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

Accepted Answer

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

Farmers can use their land to grow soy beans or corn. If the price of corn rises,

An increase in demand combined with no change in supply

If consumersʹ incomes increase and the demand for bus rides decreases

Which of the following always raises the equilibrium price?

If the good in the above figure is a normal good and income rises, then the new equilibrium quantity

Computers are a complement to computer software. Suppose the price of a computer falls. How does this fall in price affect the demand for computer software and the demand curve for computer software?

During the 2000s, the price of DVD players fell each year and manufacturers of DVD players produced and sold more DVD players each year. This result is because the

-Consider the demand curves for soft drinks shown in the figure above. A movement from point a To point c represents

After the sugar substitute saccharin was found to cause cancer in laboratory mice, its price dropped dramatically. This change in the price was because

Each point on a supply curve represents

The law of demand states that the quantity of a good demanded varies

-The above figure shows the market for hamburger. Which panel shows the effect of a new excise tax on all beef products?

Which of the following results in a movement along the supply curve of spinach but does not shift the supply curve of spinach?

Kelly graduates and her income increases by $25,000 a year. Other things remaining the same, she increases the quantity of clothes she buys. For Kelly, clothes are .

For ʺan increase in the quantity demandedʺ but not ʺan increase in demandʺ to occur, there must be a

Joe pays $8,000.00 in tuition. The 8,000 dollar tuition Joe pays is an example of what economists call

A relative price is

-The above figures show the market for oranges. Which figures) shows the effect of a new government program that provides each public school child with an orange to start the day?

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

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

Farmers can use their land to grow soy beans or corn. If the price of corn rises,

An increase in demand combined with no change in supply

If consumersʹ incomes increase and the demand for bus rides decreases

Which of the following always raises the equilibrium price?

If the good in the above figure is a normal good and income rises, then the new equilibrium quantity

Computers are a complement to computer software. Suppose the price of a computer falls. How does this fall in price affect the demand for computer software and the demand curve for computer software?

During the 2000s, the price of DVD players fell each year and manufacturers of DVD players produced and sold more DVD players each year. This result is because the

-Consider the demand curves for soft drinks shown in the figure above. A movement from point a To point c represents

After the sugar substitute saccharin was found to cause cancer in laboratory mice, its price dropped dramatically. This change in the price was because

Each point on a supply curve represents

The law of demand states that the quantity of a good demanded varies

-The above figure shows the market for hamburger. Which panel shows the effect of a new excise tax on all beef products?

Which of the following results in a movement along the supply curve of spinach but does not shift the supply curve of spinach?

Kelly graduates and her income increases by $25,000 a year. Other things remaining the same, she increases the quantity of clothes she buys. For Kelly, clothes are .

For ʺan increase in the quantity demandedʺ but not ʺan increase in demandʺ to occur, there must be a

Joe pays $8,000.00 in tuition. The 8,000 dollar tuition Joe pays is an example of what economists call

A relative price is

-The above figures show the market for oranges. Which figures) shows the effect of a new government program that provides each public school child with an orange to start the day?

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

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