Question 1

Long- distance travel by bus is an inferior good. As people's incomes increase and other things remain the same, you predict that the

Accepted Answer

A)  demand for long- distance travel by bus will increase as the price of long- distance travel by bus falls. 
B)  demand for long- distance travel by bus will decrease and the price will rise. 
C)  price of long- distance travel by bus will fall. 
D)  price of long- distance travel by bus will fall and the demand for long- distance travel by bus will increase. 
A)  demand for long- distance travel by bus will increase as the price of long- distance travel by bus falls. 
B)  demand for long- distance travel by bus will decrease and the price will rise. 
C)  price of long- distance travel by bus will fall. 
D)  price of long- distance travel by bus will fall and the demand for long- distance travel by bus will increase.

Question 2

-In the above figure, a price of $15 per dozen roses would result in a _______ so that the price of roses will _______.

Accepted Answer

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

Question 3

The "law of demand" predicts that, other things being equal,

Accepted Answer

A)  an increase in the price of coffee decreases the quantity of tea demanded. 
B)  a decrease in the price of petrol decreases the quantity of petrol demanded. 
C)  an increase in the price of downloaded music decreases the demand for downloaded music. 
D)  an increase in the price of pizza decreases the quantity of pizza demanded. 
A)  an increase in the price of coffee decreases the quantity of tea demanded. 
B)  a decrease in the price of petrol decreases the quantity of petrol demanded. 
C)  an increase in the price of downloaded music decreases the demand for downloaded music. 
D)  an increase in the price of pizza decreases the quantity of pizza demanded.

Question 4

Because of increasing marginal cost, most supply curves

Accepted Answer

A)  are vertical. 
B)  are horizontal. 
C)  have a negative slope. 
D)  have a positive slope. 
A)  are vertical. 
B)  are horizontal. 
C)  have a negative slope. 
D)  have a positive slope.

Question 5

-The figure above shows supply curves for soft drinks. Suppose the economy is at point a. An increase in the price of a soft drink is shown as a movement from point a to

Accepted Answer

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

Question 6

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

Question 7

Which of the following explain(s) 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 8

Which of the following statements is correct?

Accepted Answer

A)  When both demand and supply increase, the price rises and the quantity might increase, decrease or remain the same. 
B)  When both demand and supply decrease, the quantity increases and the price might rise, fall or remain the same. 
C)  When both demand and supply decrease, the quantity decreases and the price might rise, fall or remain the same. 
D)  When both demand and supply increase, the quantity decreases and the price might rise, fall or remain the same. 
A)  When both demand and supply increase, the price rises and the quantity might increase, decrease or remain the same. 
B)  When both demand and supply decrease, the quantity increases and the price might rise, fall or remain the same. 
C)  When both demand and supply decrease, the quantity decreases and the price might rise, fall or remain the same. 
D)  When both demand and supply increase, the quantity decreases and the price might rise, fall or remain the same.

Question 9

Which of the following decreases the demand for an inferior good?

Accepted Answer

A)  An increase in the price of a substitute 
B)  A decrease in the price of a complement 
C)  A decrease in income 
D)  An increase in income 
A)  An increase in the price of a substitute 
B)  A decrease in the price of a complement 
C)  A decrease in income 
D)  An increase in income

Question 10

Beef and leather belts are complements in production. If people's concern about health shifts the demand curve for beef leftward, the result in the market for leather belts will be a

Accepted Answer

A)  higher equilibrium price for a leather belt because there is an increase in the supply of leather belts. 
B)  lower equilibrium price for a leather belt because there is a decrease in the supply of leather belts. 
C)  lower equilibrium price for a leather belt because there is an increase in the supply of leather belts. 
D)  higher equilibrium price for a leather belt because there is a decrease in the supply of leather belts. 
A)  higher equilibrium price for a leather belt because there is an increase in the supply of leather belts. 
B)  lower equilibrium price for a leather belt because there is a decrease in the supply of leather belts. 
C)  lower equilibrium price for a leather belt because there is an increase in the supply of leather belts. 
D)  higher equilibrium price for a leather belt because there is a decrease in the supply of leather belts.

Question 11

-The above figure shows the market for pizza. Which figure shows the effect of a decrease in the price of a hamburger, which for consumers is a substitute for pizza?

Accepted Answer

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

Question 12

-The figure illustrates the market for pens. The equilibrium quantity is

Accepted Answer

A)  between 400 and 600 pens, but it is impossible to be precise. 
B)  2 pens a month. 
C)  5 pens a month. 
D)  500 pens a month. 
A)  between 400 and 600 pens, but it is impossible to be precise. 
B)  2 pens a month. 
C)  5 pens a month. 
D)  500 pens a month.

Question 13

The interaction of supply and demand explains

Accepted Answer

A)  both the prices and the quantities of goods and services. 
B)  the quantities of goods and services but not their prices. 
C)  neither the prices nor the quantities of goods and services. 
D)  the prices of goods and services but not their quantities. 
A)  both the prices and the quantities of goods and services. 
B)  the quantities of goods and services but not their prices. 
C)  neither the prices nor the quantities of goods and services. 
D)  the prices of goods and services but not their quantities.

Question 14

People buy more of good 1 when the price of good 2 rises. These goods are

Accepted Answer

A)  complements. 
B)  normal goods. 
C)  inferior goods. 
D)  substitutes. 
A)  complements. 
B)  normal goods. 
C)  inferior goods. 
D)  substitutes.

Question 15

When the demand curve shifts rightward and the supply curve shifts leftward, then the equilibrium price _______ and the equilibrium quantity _______.

Accepted Answer

A)  rises; decreases 
B)  probably changes but the direction of the change cannot be determined; increases 
C)  rises; probably changes but the direction of the change cannot be determined 
D)  falls; increases 
A)  rises; decreases 
B)  probably changes but the direction of the change cannot be determined; increases 
C)  rises; probably changes but the direction of the change cannot be determined 
D)  falls; increases

Question 16

Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding cattle. The equilibrium price of beef will

Accepted Answer

A)  fall. 
B)  rise. 
C)  stay the same. 
D)  perhaps rise, fall or stay the same, but more information is needed to determine which it does. 
A)  fall. 
B)  rise. 
C)  stay the same. 
D)  perhaps rise, fall or stay the same, but more information is needed to determine which it does.

Question 17

Which of the following always raises the equilibrium price?

Accepted Answer

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

Question 18

Which of the following increases the quantity supplied of good X but does NOT increase the supply of good X?

Accepted Answer

A)  An advance in the technology for producing X 
B)  An increase in the price of X 
C)  A fall in the price of a factor production used to produce X 
D)  An increase in the price of good Y, a complement in the production of X 
A)  An advance in the technology for producing X 
B)  An increase in the price of X 
C)  A fall in the price of a factor production used to produce X 
D)  An increase in the price of good Y, a complement in the production of X

Question 19

An increase in the number of suppliers in a market results in a

Accepted Answer

A)  rightward shift in the supply curve. 
B)  movement up along the supply curve. 
C)  leftward shift in the supply curve. 
D)  Both answers A and C are correct. 
A)  rightward shift in the supply curve. 
B)  movement up along the supply curve. 
C)  leftward shift in the supply curve. 
D)  Both answers A and C are correct.

Question 20

Which of the following statements is correct?

Accepted Answer

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

Long- distance travel by bus is an inferior good. As people's incomes increase and other things remain the same, you predict that the

-In the above figure, a price of $15 per dozen roses would result in a _ so that the price of roses will _.

The "law of demand" predicts that, other things being equal,

Because of increasing marginal cost, most supply curves

-The figure above shows supply curves for soft drinks. Suppose the economy is at point a. An increase in the price of a soft drink is shown as a movement from point a to

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.

Which of the following explain(s) why supply curves slope upward?

Which of the following statements is correct?

Which of the following decreases the demand for an inferior good?

Beef and leather belts are complements in production. If people's concern about health shifts the demand curve for beef leftward, the result in the market for leather belts will be a

-The above figure shows the market for pizza. Which figure shows the effect of a decrease in the price of a hamburger, which for consumers is a substitute for pizza?

-The figure illustrates the market for pens. The equilibrium quantity is

The interaction of supply and demand explains

People buy more of good 1 when the price of good 2 rises. These goods are

When the demand curve shifts rightward and the supply curve shifts leftward, then the equilibrium price _ and the equilibrium quantity _.

Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding cattle. The equilibrium price of beef will

Which of the following always raises the equilibrium price?

Which of the following increases the quantity supplied of good X but does NOT increase the supply of good X?

An increase in the number of suppliers in a market results in a

Which of the following statements is correct?

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

Long- distance travel by bus is an inferior good. As people's incomes increase and other things remain the same, you predict that the

-In the above figure, a price of $15 per dozen roses would result in a _______ so that the price of roses will _______.

The "law of demand" predicts that, other things being equal,

Because of increasing marginal cost, most supply curves

-The figure above shows supply curves for soft drinks. Suppose the economy is at point a. An increase in the price of a soft drink is shown as a movement from point a to

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.

Which of the following explain(s) why supply curves slope upward?

Which of the following statements is correct?

Which of the following decreases the demand for an inferior good?

Beef and leather belts are complements in production. If people's concern about health shifts the demand curve for beef leftward, the result in the market for leather belts will be a

-The above figure shows the market for pizza. Which figure shows the effect of a decrease in the price of a hamburger, which for consumers is a substitute for pizza?

-The figure illustrates the market for pens. The equilibrium quantity is

The interaction of supply and demand explains

People buy more of good 1 when the price of good 2 rises. These goods are

When the demand curve shifts rightward and the supply curve shifts leftward, then the equilibrium price _______ and the equilibrium quantity _______.

Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding cattle. The equilibrium price of beef will

Which of the following always raises the equilibrium price?

Which of the following increases the quantity supplied of good X but does NOT increase the supply of good X?

An increase in the number of suppliers in a market results in a

Which of the following statements is correct?

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

-In the above figure, a price of $15 per dozen roses would result in a _ so that the price of roses will _.

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 demand curve shifts rightward and the supply curve shifts leftward, then the equilibrium price _ and the equilibrium quantity _.