Question 1

If there is a shortage in the market for athletic shoes,_____.

Accepted Answer

A) the price of athletic shoes will increase to eliminate the shortage 
B) inventories of athletic shoes will accumulate 
C) the demand for athletic shoes will decrease to restore equilibrium 
D) production of athletic shoes will decrease to restore equilibrium 
E) the supply of athletic shoes will increase to restore equilibrium 
A) the price of athletic shoes will increase to eliminate the shortage 
B) inventories of athletic shoes will accumulate 
C) the demand for athletic shoes will decrease to restore equilibrium 
D) production of athletic shoes will decrease to restore equilibrium 
E) the supply of athletic shoes will increase to restore equilibrium A

Question 2

The table given below shows the quantity supplied and the quantity demanded for a good at different prices.If the price of the good described in the table below is $1.60,then an economist would expect the:
$$\begin{array}{l}
\text { Table } 4.1\
\begin{array} { | r | r | r | } 
\hline { \text { Price(\$) } } & { \begin{array} { l } 
\text { Quantity } \
\text { demanded }
\end{array} } & { \begin{array} { l } 
\text { Quantity } \
\text { supplied }
\end{array} } \
\hline 1 & 100 & 10 \
\hline 1.2 & 90 & 30 \
\hline 1.4 & 80 & 50 \
\hline 1.5 & 70 & 70 \
\hline 1.6 & 60 & 90 \
\hline
\end{array}
\end{array}$$

Accepted Answer

A) price to decrease to $1.40. 
B) price to decrease to $1.50. 
C) quantity supplied to decrease to 50 units. 
D) quantity demanded to increase to 80 units. 
E) quantity demanded to decrease to 50 units. 
A) price to decrease to $1.40. 
B) price to decrease to $1.50. 
C) quantity supplied to decrease to 50 units. 
D) quantity demanded to increase to 80 units. 
E) quantity demanded to decrease to 50 units. B

Question 3

For a given upward-sloping supply curve,an increase in demand for chocolate chips will result in a:

Accepted Answer

A) higher equilibrium price and a lower equilibrium quantity. 
B) lower equilibrium price and a lower equilibrium quantity. 
C) lower equilibrium price and a higher equilibrium quantity. 
D) higher equilibrium price and a higher equilibrium quantity. 
E) decrease in the quantity supplied of chocolate chips. 
A) higher equilibrium price and a lower equilibrium quantity. 
B) lower equilibrium price and a lower equilibrium quantity. 
C) lower equilibrium price and a higher equilibrium quantity. 
D) higher equilibrium price and a higher equilibrium quantity. 
E) decrease in the quantity supplied of chocolate chips. D

Question 4

The market supply curve of a particular product indicates the total quantities:

Accepted Answer

A) that are actually sold during a given time period. 
B) that buyers are willing to purchase at alternative prices. 
C) that sellers are willing and able to offer at alternative prices. 
D) that sellers are willing to offer for sale at a fixed price. 
E) of complements offered for sale. 
A) that are actually sold during a given time period. 
B) that buyers are willing to purchase at alternative prices. 
C) that sellers are willing and able to offer at alternative prices. 
D) that sellers are willing to offer for sale at a fixed price. 
E) of complements offered for sale.

Question 5

Consider a market for kids' shoes that is initially in equilibrium.For a given upward-sloping demand curve,an increase in the price of Velcro which is used as fasteners for kids' shoes will result in a(n):

Accepted Answer

A) increase in both equilibrium price and quantity of shoes. 
B) increase in both quantity demanded and quantity supplied of shoes. 
C) increase in equilibrium price but a decrease in equilibrium quantity of shoes. 
D) decrease in equilibrium price but an increase in equilibrium quantity of shoes. 
E) decrease in both quantity demanded and quantity supplied of shoes. 
A) increase in both equilibrium price and quantity of shoes. 
B) increase in both quantity demanded and quantity supplied of shoes. 
C) increase in equilibrium price but a decrease in equilibrium quantity of shoes. 
D) decrease in equilibrium price but an increase in equilibrium quantity of shoes. 
E) decrease in both quantity demanded and quantity supplied of shoes.

Question 6

The market for chewing gum is in equilibrium with a current price of 50 cents per pack and a quantity of 100,000 packs per day.Which of the following events is most likely to result in a new equilibrium price of 75 cents and a new equilibrium quantity of 125,000 packs,if the supply curve for chewing gums remains unchanged?

Accepted Answer

A) An increase in the price of other kinds of candy 
B) An increase in the price of the ingredients used to make chewing gum 
C) An agreement among workers in the chewing gum industry to work for lower wages 
D) A decrease in the number of young people in the population 
E) A decrease in income of chewing gum consumers 
A) An increase in the price of other kinds of candy 
B) An increase in the price of the ingredients used to make chewing gum 
C) An agreement among workers in the chewing gum industry to work for lower wages 
D) A decrease in the number of young people in the population 
E) A decrease in income of chewing gum consumers

Question 7

In the figure given below that shows the demand for baby formula,an increase in the birth rate is likely to cause which of the following changes?

Accepted Answer

A) A shift in the demand curve from D1 to D2 
B) A movement along the demand curve D1 from point a to point b 
C) A shift in the demand curve from D2 to D1 
D) A movement along the demand curve D2 from point d to point c 
E) A movement from point b on demand curve D1 to point c on demand curve D2 
A) A shift in the demand curve from D1 to D2 
B) A movement along the demand curve D1 from point a to point b 
C) A shift in the demand curve from D2 to D1 
D) A movement along the demand curve D2 from point d to point c 
E) A movement from point b on demand curve D1 to point c on demand curve D2

Question 8

When a market is in equilibrium:

Accepted Answer

A) producers earn economic profits. 
B) production exhibit diminishing returns to scale. 
C) market forces exert no pressure for change in price. 
D) industry output is maximized. 
E) market forces allow producers to charge the maximum price. 
A) producers earn economic profits. 
B) production exhibit diminishing returns to scale. 
C) market forces exert no pressure for change in price. 
D) industry output is maximized. 
E) market forces allow producers to charge the maximum price.

Question 9

The substitution effect of a price change describes the change in the quantity demanded of a good due to a change in its relative price.

Accepted Answer

A) True 
 B)False

Question 10

What is the effect of a decrease in the price of potato chips on the market for pretzels,a substitute good,that is initially in equilibrium?

Accepted Answer

A) Both equilibrium price and equilibrium quantity of pretzels will increase. 
B) Both equilibrium price and equilibrium quantity of pretzels will fall. 
C) Equilibrium price will increase and equilibrium quantity of pretzels will fall. 
D) Equilibrium price will fall and equilibrium quantity of pretzels will increase. 
E) Equilibrium price and equilibrium quantity of pretzels remain unchanged. 
A) Both equilibrium price and equilibrium quantity of pretzels will increase. 
B) Both equilibrium price and equilibrium quantity of pretzels will fall. 
C) Equilibrium price will increase and equilibrium quantity of pretzels will fall. 
D) Equilibrium price will fall and equilibrium quantity of pretzels will increase. 
E) Equilibrium price and equilibrium quantity of pretzels remain unchanged.

Question 11

Suppose a consumer can choose to consume either apples or oranges.Which of the following results when the price of each fruit increases by 15 percent?

Accepted Answer

A) The consumer substitutes apples for oranges. 
B) The income effect of this price change is positive. 
C) The substitution effect of this price change is zero. 
D) The consumer demands more of both the goods. 
E) The consumer substitutes oranges for apples. 
A) The consumer substitutes apples for oranges. 
B) The income effect of this price change is positive. 
C) The substitution effect of this price change is zero. 
D) The consumer demands more of both the goods. 
E) The consumer substitutes oranges for apples.

Question 12

When suppliers of a good that can be easily stored expect its price to increase in future,they will reduce its current supply.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is likely to shift the market supply curve for corn in the short run?

Accepted Answer

A) A change in the price of corn 
B) A change in the price of pesticides 
C) A change in the number of corn consumers 
D) A change in the expectations of consumers about the future price of corn 
E) A change in the money income of corn consumers 
A) A change in the price of corn 
B) A change in the price of pesticides 
C) A change in the number of corn consumers 
D) A change in the expectations of consumers about the future price of corn 
E) A change in the money income of corn consumers

Question 14

Demand for an inferior good decreases as consumer income increases.

Accepted Answer

A) True 
 B)False

Question 15

When a surplus arises in the market for swimwear:

Accepted Answer

A) the price of swimwear will increase. 
B) the production of swimwear will increase. 
C) the supply of swimwear will increase. 
D) the price of swimwear at retail outlets will fall. 
E) the demand for swimwear will increase. 
A) the price of swimwear will increase. 
B) the production of swimwear will increase. 
C) the supply of swimwear will increase. 
D) the price of swimwear at retail outlets will fall. 
E) the demand for swimwear will increase.

Question 16

Which of the following is most likely to cause the demand for ice cream,a normal good,to decrease?

Accepted Answer

A) A decrease in the price of ice cream 
B) A decrease in the price of milk 
C) A warmer weather 
D) An increase in the number of consumers 
E) A decrease in consumer income 
A) A decrease in the price of ice cream 
B) A decrease in the price of milk 
C) A warmer weather 
D) An increase in the number of consumers 
E) A decrease in consumer income

Question 17

In the figure given below,which of the following is true at the price ceiling,P?

Accepted Answer

A) Excess quantity supplied equals 300 gallons. 
B) Excess quantity demanded equals 300 gallons. 
C) Excess quantity supplied equals 500 gallons. 
D) Excess quantity demanded equals 800 gallons. 
E) Quantity demanded will be equal to quantity supplied. 
A) Excess quantity supplied equals 300 gallons. 
B) Excess quantity demanded equals 300 gallons. 
C) Excess quantity supplied equals 500 gallons. 
D) Excess quantity demanded equals 800 gallons. 
E) Quantity demanded will be equal to quantity supplied.

Question 18

Producers supply larger quantities of any good at higher prices because:

Accepted Answer

A) prices signal product quality. 
B) higher prices attract resources from other uses. 
C) people are naturally lazy and refuse to give up their leisure. 
D) price and quantity supplied are inversely related. 
E) of the law of decreasing opportunity cost. 
A) prices signal product quality. 
B) higher prices attract resources from other uses. 
C) people are naturally lazy and refuse to give up their leisure. 
D) price and quantity supplied are inversely related. 
E) of the law of decreasing opportunity cost.

Question 19

Two goods are considered substitutes only if a(n):

Accepted Answer

A) decrease in the demand for one good leads to a decrease in the supply of the other. 
B) increase in the demand for one good leads to a decrease in the supply of the other. 
C) increase in the price of one good leads to an increase in the demand for the other. 
D) decrease in the price of one good leads to an increase in the demand for the other. 
E) decrease in the supply of one good causes producers to switch to production of the other. 
A) decrease in the demand for one good leads to a decrease in the supply of the other. 
B) increase in the demand for one good leads to a decrease in the supply of the other. 
C) increase in the price of one good leads to an increase in the demand for the other. 
D) decrease in the price of one good leads to an increase in the demand for the other. 
E) decrease in the supply of one good causes producers to switch to production of the other.

Question 20

The figure given below shows the supply of baby formula.Which of the following is likely to result from an increase in the price of baby formula?

Accepted Answer

A) A movement from point a to point b on the supply curve S1 
B) A leftward shift of the supply curve from S2 to S1 
C) A movement from point d to point c on the supply curve S2 
D) A rightward shift of the supply curve from S1 to S2 
E) A movement from point b to point a on the supply curve S1 
A) A movement from point a to point b on the supply curve S1 
B) A leftward shift of the supply curve from S2 to S1 
C) A movement from point d to point c on the supply curve S2 
D) A rightward shift of the supply curve from S1 to S2 
E) A movement from point b to point a on the supply curve S1

If there is a shortage in the market for athletic shoes,_____.

For a given upward-sloping supply curve,an increase in demand for chocolate chips will result in a:

The market supply curve of a particular product indicates the total quantities:

Consider a market for kids' shoes that is initially in equilibrium.For a given upward-sloping demand curve,an increase in the price of Velcro which is used as fasteners for kids' shoes will result in a(n):

In the figure given below that shows the demand for baby formula,an increase in the birth rate is likely to cause which of the following changes?

When a market is in equilibrium:

The substitution effect of a price change describes the change in the quantity demanded of a good due to a change in its relative price.

What is the effect of a decrease in the price of potato chips on the market for pretzels,a substitute good,that is initially in equilibrium?

Suppose a consumer can choose to consume either apples or oranges.Which of the following results when the price of each fruit increases by 15 percent?

When suppliers of a good that can be easily stored expect its price to increase in future,they will reduce its current supply.

Which of the following is likely to shift the market supply curve for corn in the short run?

Demand for an inferior good decreases as consumer income increases.

When a surplus arises in the market for swimwear:

Which of the following is most likely to cause the demand for ice cream,a normal good,to decrease?

In the figure given below,which of the following is true at the price ceiling,P?

Producers supply larger quantities of any good at higher prices because:

Two goods are considered substitutes only if a(n):

The figure given below shows the supply of baby formula.Which of the following is likely to result from an increase in the price of baby formula?

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

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Exam 4: Demand, Supply, and Markets

If there is a shortage in the market for athletic shoes,_____.

For a given upward-sloping supply curve,an increase in demand for chocolate chips will result in a:

The market supply curve of a particular product indicates the total quantities:

Consider a market for kids' shoes that is initially in equilibrium.For a given upward-sloping demand curve,an increase in the price of Velcro which is used as fasteners for kids' shoes will result in a(n):

In the figure given below that shows the demand for baby formula,an increase in the birth rate is likely to cause which of the following changes?

When a market is in equilibrium:

The substitution effect of a price change describes the change in the quantity demanded of a good due to a change in its relative price.

What is the effect of a decrease in the price of potato chips on the market for pretzels,a substitute good,that is initially in equilibrium?

Suppose a consumer can choose to consume either apples or oranges.Which of the following results when the price of each fruit increases by 15 percent?

When suppliers of a good that can be easily stored expect its price to increase in future,they will reduce its current supply.

Which of the following is likely to shift the market supply curve for corn in the short run?

Demand for an inferior good decreases as consumer income increases.

When a surplus arises in the market for swimwear:

Which of the following is most likely to cause the demand for ice cream,a normal good,to decrease?

In the figure given below,which of the following is true at the price ceiling,P?

Producers supply larger quantities of any good at higher prices because:

Two goods are considered substitutes only if a(n):

The figure given below shows the supply of baby formula.Which of the following is likely to result from an increase in the price of baby formula?

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters