Question 1

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

Accepted Answer

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

Question 2

When the price of a good falls, the income effect for a normal good implies that people buy

Accepted Answer

A)  more of that good because they can afford to buy more of all the things they previously bought. 
B)  less of that good because they cannot afford to buy all the things they previously bought. 
C)  more of that good because the relative price of the good has risen. 
D)  less of that good because the relative price of the good has fallen. 
A)  more of that good because they can afford to buy more of all the things they previously bought. 
B)  less of that good because they cannot afford to buy all the things they previously bought. 
C)  more of that good because the relative price of the good has risen. 
D)  less of that good because the relative price of the good has fallen.

Question 3

An increase in technology for producing personal computers leads to

Accepted Answer

A)  an increase in the demand for personal computers. 
B)  an increase in the supply of personal computers. 
C)  a decrease in the demand for personal computers. 
D)  a decrease in the supply of personal computers. 
A)  an increase in the demand for personal computers. 
B)  an increase in the supply of personal computers. 
C)  a decrease in the demand for personal computers. 
D)  a decrease in the supply of personal computers.

Question 4

The "law of demand" refers to the fact that, all other things remaining the same, when the price of a good rises

Accepted Answer

A)  there is a movement up along the demand curve to a smaller quantity demanded. 
B)  the demand curve shifts rightward. 
C)  the demand curve shifts leftward. 
D)  there is a movement down along the demand curve to a larger quantity demanded. 
A)  there is a movement up along the demand curve to a smaller quantity demanded. 
B)  the demand curve shifts rightward. 
C)  the demand curve shifts leftward. 
D)  there is a movement down along the demand curve to a larger quantity demanded.

Question 5

What happens to the demand for Xbox games if the price of an Xbox falls?

Accepted Answer

A)  The demand for Xbox games remains unchanged. 
B)  The demand for Xbox games decreases because the price of a complement falls. 
C)  The demand for Xbox games increases because the price of a complement falls. 
D)  The demand for Xbox games decreases because the price of a substitute falls. 
A)  The demand for Xbox games remains unchanged. 
B)  The demand for Xbox games decreases because the price of a complement falls. 
C)  The demand for Xbox games increases because the price of a complement falls. 
D)  The demand for Xbox games decreases because the price of a substitute falls.

Question 6

If a producer can use resources to produce either good A or good B, then A and B are

Accepted Answer

A)  substitutes in production. 
B)  complements in production. 
C)  substitutes in consumption. 
D)  complements in consumption. 
A)  substitutes in production. 
B)  complements in production. 
C)  substitutes in consumption. 
D)  complements in consumption.

Question 7

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

Accepted Answer

A)  A special rebate program on all new cars 
B)  An increase in wages for used car salespeople 
C)  A new 8 per cent excise tax placed on all new car purchases 
D)  None of the above answers is correct. 
A)  A special rebate program on all new cars 
B)  An increase in wages for used car salespeople 
C)  A new 8 per cent excise tax placed on all new car purchases 
D)  None of the above answers is correct.

Question 8

If a market is NOT in equilibrium, which of the following is likely to occur?

Accepted Answer

A)  The supply curve will shift to bring the market to equilibrium. 
B)  The price will adjust to bring the market to equilibrium. 
C)  The demand curve will shift to bring the market to equilibrium. 
D)  Both A and B are correct. 
A)  The supply curve will shift to bring the market to equilibrium. 
B)  The price will adjust to bring the market to equilibrium. 
C)  The demand curve will shift to bring the market to equilibrium. 
D)  Both A and B are correct.

Question 9

-The figure above shows the market for chocolate. People become more concerned that eating chocolate causes them to gain weight, which they do not like. As a result, the

Accepted Answer

A)  demand curve shifts from D2 to D1 and the supply curve does not shift. 
B)  demand curve shifts from D2 to D1 and the supply curve shifts from S2 to S1. 
C)  demand curve does not shift, and the supply curve shifts from S1 to S2. 
D)  demand curve shifts from D1 to D2 and the supply curve shifts from S1 to S2. 
A)  demand curve shifts from D2 to D1 and the supply curve does not shift. 
B)  demand curve shifts from D2 to D1 and the supply curve shifts from S2 to S1. 
C)  demand curve does not shift, and the supply curve shifts from S1 to S2. 
D)  demand curve shifts from D1 to D2 and the supply curve shifts from S1 to S2.

Question 10

Coffee and sugar are complements. If the supply curve of coffee shifts leftward because of poor weather, then there will be

Accepted Answer

A)  an increase in the price of sugar. 
B)  a decrease in the price of sugar. 
C)  a leftward shift of the supply curve for sugar. 
D)  a leftward shift of the demand curve for coffee. 
A)  an increase in the price of sugar. 
B)  a decrease in the price of sugar. 
C)  a leftward shift of the supply curve for sugar. 
D)  a leftward shift of the demand curve for coffee.

Question 11

-The above table gives the demand and supply schedules for Blu- ray discs. Based on the table, the equilibrium quantity and price of a Blu- ray disc are

Accepted Answer

A)  28,000 and $12. 
B)  16,000 and $16. 
C)  16,000 and $24. 
D)  20,000 and $20. 
A)  28,000 and $12. 
B)  16,000 and $16. 
C)  16,000 and $24. 
D)  20,000 and $20.

Question 12

If technological advances lower the cost of computer chips, in the market for computers the equilibrium price will _______ and the equilibrium quantity will _______.

Accepted Answer

A)  rise; increase 
B)  fall; increase 
C)  fall; decrease 
D)  rise; decrease 
A)  rise; increase 
B)  fall; increase 
C)  fall; decrease 
D)  rise; decrease

Question 13

Suppose a market begins in equilibrium. If supply increases, then at the original equilibrium price the quantity demanded

Accepted Answer

A)  is less than the quantity supplied and a shortage results. 
B)  exceeds the quantity supplied and a shortage results. 
C)  exceeds the quantity supplied and a surplus results. 
D)  is less than the quantity supplied and a surplus results. 
A)  is less than the quantity supplied and a shortage results. 
B)  exceeds the quantity supplied and a shortage results. 
C)  exceeds the quantity supplied and a surplus results. 
D)  is less than the quantity supplied and a surplus results.

Question 14

When the price is below the equilibrium price, the quantity demanded

Accepted Answer

A)  is less than the equilibrium quantity and the quantity supplied is also less than the equilibrium quantity. 
B)  exceeds the equilibrium quantity but the quantity supplied is less than the equilibrium quantity. 
C)  exceeds the equilibrium quantity and the quantity supplied also exceeds the equilibrium quantity. 
D)  is less than the equilibrium quantity but the quantity supplied exceeds the equilibrium quantity. 
A)  is less than the equilibrium quantity and the quantity supplied is also less than the equilibrium quantity. 
B)  exceeds the equilibrium quantity but the quantity supplied is less than the equilibrium quantity. 
C)  exceeds the equilibrium quantity and the quantity supplied also exceeds the equilibrium quantity. 
D)  is less than the equilibrium quantity but the quantity supplied exceeds the equilibrium quantity.

Question 15

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

Accepted Answer

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

Question 16

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

Question 17

Suppose we observe that both the equilibrium price of digital cameras and the equilibrium quantity of digital cameras have increased. Which of the following events could be responsible for this?

Accepted Answer

A)  Consumers' preferences changed in favour of digital cameras. 
B)  Technological advances in digital camera production. 
C)  Workers who make digital cameras received a pay raise. 
D)  The price of film cameras fell. 
A)  Consumers' preferences changed in favour of digital cameras. 
B)  Technological advances in digital camera production. 
C)  Workers who make digital cameras received a pay raise. 
D)  The price of film cameras fell.

Question 18

The "law of demand" implies that demand curves

Accepted Answer

A)  slope up. 
B)  shift rightward whenever the price rises. 
C)  shift leftward whenever the price rises. 
D)  slope down. 
A)  slope up. 
B)  shift rightward whenever the price rises. 
C)  shift leftward whenever the price rises. 
D)  slope down.

Question 19

Scarcity guarantees that

Accepted Answer

A)  most demands will be satisfied. 
B)  wants will exceed demands. 
C)  demands will exceed wants. 
D)  demands will be equal to wants. 
A)  most demands will be satisfied. 
B)  wants will exceed demands. 
C)  demands will exceed wants. 
D)  demands will be equal to wants.

Question 20

Oatmeal is a normal good and cold cereal is a substitute for oatmeal. Raisins are a complement for oatmeal. Which of the following increases the demand for oatmeal?

Accepted Answer

A)  An increase in the price of raisins 
B)  A decrease in income 
C)  An increase in the price of cold cereal 
D)  A decrease in population 
A)  An increase in the price of raisins 
B)  A decrease in income 
C)  An increase in the price of cold cereal 
D)  A decrease in population

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

When the price of a good falls, the income effect for a normal good implies that people buy

An increase in technology for producing personal computers leads to

The "law of demand" refers to the fact that, all other things remaining the same, when the price of a good rises

What happens to the demand for Xbox games if the price of an Xbox falls?

If a producer can use resources to produce either good A or good B, then A and B are

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

If a market is NOT in equilibrium, which of the following is likely to occur?

-The figure above shows the market for chocolate. People become more concerned that eating chocolate causes them to gain weight, which they do not like. As a result, the

Coffee and sugar are complements. If the supply curve of coffee shifts leftward because of poor weather, then there will be

-The above table gives the demand and supply schedules for Blu- ray discs. Based on the table, the equilibrium quantity and price of a Blu- ray disc are

If technological advances lower the cost of computer chips, in the market for computers the equilibrium price will _ and the equilibrium quantity will _.

Suppose a market begins in equilibrium. If supply increases, then at the original equilibrium price the quantity demanded

When the price is below the equilibrium price, the quantity demanded

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

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

Suppose we observe that both the equilibrium price of digital cameras and the equilibrium quantity of digital cameras have increased. Which of the following events could be responsible for this?

The "law of demand" implies that demand curves

Scarcity guarantees that

Oatmeal is a normal good and cold cereal is a substitute for oatmeal. Raisins are a complement for oatmeal. Which of the following increases the demand for oatmeal?

What Is Economics

The Economic Problem

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Public Choices and Public Goods

Economics of the Environment

Monopoly and Its Regulation

Economic Inequality

Consumer Choices and Constraints

Producer Choices and Constraints

Perfect Competition

Monopolistic Competition

Oligopoly Games and Strategy

Decisions in Factor Markets

Filters

Exam 3: Demand and Supply

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

When the price of a good falls, the income effect for a normal good implies that people buy

An increase in technology for producing personal computers leads to

The "law of demand" refers to the fact that, all other things remaining the same, when the price of a good rises

What happens to the demand for Xbox games if the price of an Xbox falls?

If a producer can use resources to produce either good A or good B, then A and B are

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

If a market is NOT in equilibrium, which of the following is likely to occur?

-The figure above shows the market for chocolate. People become more concerned that eating chocolate causes them to gain weight, which they do not like. As a result, the

Coffee and sugar are complements. If the supply curve of coffee shifts leftward because of poor weather, then there will be

-The above table gives the demand and supply schedules for Blu- ray discs. Based on the table, the equilibrium quantity and price of a Blu- ray disc are

If technological advances lower the cost of computer chips, in the market for computers the equilibrium price will _______ and the equilibrium quantity will _______.

Suppose a market begins in equilibrium. If supply increases, then at the original equilibrium price the quantity demanded

When the price is below the equilibrium price, the quantity demanded

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

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

Suppose we observe that both the equilibrium price of digital cameras and the equilibrium quantity of digital cameras have increased. Which of the following events could be responsible for this?

The "law of demand" implies that demand curves

Scarcity guarantees that

Oatmeal is a normal good and cold cereal is a substitute for oatmeal. Raisins are a complement for oatmeal. Which of the following increases the demand for oatmeal?

What Is Economics

The Economic Problem

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Public Choices and Public Goods

Economics of the Environment

Monopoly and Its Regulation

Economic Inequality

Consumer Choices and Constraints

Producer Choices and Constraints

Perfect Competition

Monopolistic Competition

Oligopoly Games and Strategy

Decisions in Factor Markets

Filters

If technological advances lower the cost of computer chips, in the market for computers the equilibrium price will _ and the equilibrium quantity will _.