Question 1

In 2012 Nike reduced the price of its running shoes by 20 percent. As a result, the substitution effect caused

Accepted Answer

A)  the demand for Nike shoes to increase. 
B)  people to switch from Adidas shoes and buy more Nikes. 
C)  the relative price of Nikes to increase. 
D)  the demand curve for Nikes to shift rightward. 
A)  the demand for Nike shoes to increase. 
B)  people to switch from Adidas shoes and buy more Nikes. 
C)  the relative price of Nikes to increase. 
D)  the demand curve for Nikes to shift rightward.

Question 2

General Electric (GE) produces wind turbines that generate wind power. Over the past 10 years, the advances in technology used to produce wind turbines has resulted in

Accepted Answer

A)  a movement up along the supply curve for wind-generated power. 
B)  a rightward shift in the supply curve for wind-generated power. 
C)  a decrease in the supply of wind-generated power. 
D)  GE increasing the quantity supplied of wind turbines. 
A)  a movement up along the supply curve for wind-generated power. 
B)  a rightward shift in the supply curve for wind-generated power. 
C)  a decrease in the supply of wind-generated power. 
D)  GE increasing the quantity supplied of wind turbines.

Question 3

-The figure above shows the market for airline tickets. In early 2008 firms negotiated lower wages with their workers. This change is shown in the figure as a shift from

Accepted Answer

A)  D0 to D1. 
B)  D1 to D0. 
C)  S0 to S1. 
D)  S1 to S0. 
A)  D0 to D1. 
B)  D1 to D0. 
C)  S0 to S1. 
D)  S1 to S0.

Question 4

As the relative price of a good falls, the substitution effect implies that people buy

Accepted Answer

A)  less of that good and more of its substitutes. 
B)  more of that good and less of its substitutes. 
C)  less of that good and less of its substitutes. 
D)  more of that good and more of its substitutes. 
A)  less of that good and more of its substitutes. 
B)  more of that good and less of its substitutes. 
C)  less of that good and less of its substitutes. 
D)  more of that good and more of its substitutes.

Question 5

Which of the following shifts the supply curve for oranges?

Accepted Answer

A)  disastrous weather that destroys about half of this year's orange crop 
B)  a newly discovered increase in the nutritional value of oranges 
C)  an increase in the price of bananas, a substitute in consumption for oranges 
D)  an increase in income for all orange consumers 
A)  disastrous weather that destroys about half of this year's orange crop 
B)  a newly discovered increase in the nutritional value of oranges 
C)  an increase in the price of bananas, a substitute in consumption for oranges 
D)  an increase in income for all orange consumers

Question 6

-Suppose the market for Blu-rays has the demand and supply schedules shown in the table above. Suppose a technological advance increases the quantity of disks supplied at each price by 25 million. What is the new equilibrium price and the new equilibrium quantity of Blu-rays?

Accepted Answer

The initial equilibrium price is $11.50

Question 7

The demand curve for a normal good shifts leftward if income ________ or the expected future price ________.

Accepted Answer

A)  decreases; falls 
B)  decreases; rises 
C)  increases; falls 
D)  increases; rises 
A)  decreases; falls 
B)  decreases; rises 
C)  increases; falls 
D)  increases; rises

Question 8

Which of the following always lowers the equilibrium price?

Accepted Answer

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

Question 9

-The above figures show the market for gasoline. Which figure(s) 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 10

What leads to a decrease in the quantity supplied of a good or service?

Accepted Answer

The quantity supplie

Question 11

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 12

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

Question 13

The observation that the demand curve for grape jelly shifts rightward every time the price of peanut butter falls means that grape jelly and peanut butter are

Accepted Answer

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

Question 14

If house purchases and renting an apartment are substitutes, then an increase in the price of a new house results in a rise in the rent charged for apartments.

Accepted Answer

A) True 
 B)False

Question 15

When the price is less than the equilibrium price

Accepted Answer

A)  there will be a shortage. 
B)  some consumers will be willing to pay a price higher than the prevailing price. 
C)  the price will be forced higher. 
D)  All of the above answers are correct. 
A)  there will be a shortage. 
B)  some consumers will be willing to pay a price higher than the prevailing price. 
C)  the price will be forced higher. 
D)  All of the above answers are correct.

Question 16

Wants, as opposed to demands

Accepted Answer

A)  are the unlimited desires of the consumer. 
B)  are the goods the consumer plans to acquire. 
C)  are the goods the consumer has acquired. 
D)  depend on the price. 
A)  are the unlimited desires of the consumer. 
B)  are the goods the consumer plans to acquire. 
C)  are the goods the consumer has acquired. 
D)  depend on the price.

Question 17

Which of the following always raises the equilibrium price?

Accepted Answer

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

Question 18

Which of the following would NOT shift the demand curve for turkey?

Accepted Answer

A)  an increase in income 
B)  a decrease in the price of ham 
C)  a change in people's preferences for turkey 
D)  a change in the price of a turkey 
A)  an increase in income 
B)  a decrease in the price of ham 
C)  a change in people's preferences for turkey 
D)  a change in the price of a turkey

Question 19

What are substitutes in production?

Accepted Answer

Goods are substitutes in produ

Question 20

A decrease in the expected future price of cars

Accepted Answer

A)  increases the current quantity demanded of cars, that is, there is a movement downward along the demand curve for cars. 
B)  increases the current demand for cars, that is, there is a rightward shift of the demand curve for cars. 
C)  decreases the current quantity demanded of cars, that is, there is a movement upward along the demand curve for cars. 
D)  decreases the current demand for cars, that is, there is a leftward shift of the demand curve for cars. 
A)  increases the current quantity demanded of cars, that is, there is a movement downward along the demand curve for cars. 
B)  increases the current demand for cars, that is, there is a rightward shift of the demand curve for cars. 
C)  decreases the current quantity demanded of cars, that is, there is a movement upward along the demand curve for cars. 
D)  decreases the current demand for cars, that is, there is a leftward shift of the demand curve for cars.

In 2012 Nike reduced the price of its running shoes by 20 percent. As a result, the substitution effect caused

General Electric (GE) produces wind turbines that generate wind power. Over the past 10 years, the advances in technology used to produce wind turbines has resulted in

-The figure above shows the market for airline tickets. In early 2008 firms negotiated lower wages with their workers. This change is shown in the figure as a shift from

As the relative price of a good falls, the substitution effect implies that people buy

Which of the following shifts the supply curve for oranges?

-Suppose the market for Blu-rays has the demand and supply schedules shown in the table above. Suppose a technological advance increases the quantity of disks supplied at each price by 25 million. What is the new equilibrium price and the new equilibrium quantity of Blu-rays?

The demand curve for a normal good shifts leftward if income or the expected future price .

Which of the following always lowers the equilibrium price?

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

What leads to a decrease in the quantity supplied of a good or service?

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).

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.

The observation that the demand curve for grape jelly shifts rightward every time the price of peanut butter falls means that grape jelly and peanut butter are

If house purchases and renting an apartment are substitutes, then an increase in the price of a new house results in a rise in the rent charged for apartments.

When the price is less than the equilibrium price

Wants, as opposed to demands

Which of the following always raises the equilibrium price?

Which of the following would NOT shift the demand curve for turkey?

What are substitutes in production?

A decrease in the expected future price of cars

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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 3: Demand and Supply

In 2012 Nike reduced the price of its running shoes by 20 percent. As a result, the substitution effect caused

General Electric (GE) produces wind turbines that generate wind power. Over the past 10 years, the advances in technology used to produce wind turbines has resulted in

-The figure above shows the market for airline tickets. In early 2008 firms negotiated lower wages with their workers. This change is shown in the figure as a shift from

As the relative price of a good falls, the substitution effect implies that people buy

Which of the following shifts the supply curve for oranges?

-Suppose the market for Blu-rays has the demand and supply schedules shown in the table above. Suppose a technological advance increases the quantity of disks supplied at each price by 25 million. What is the new equilibrium price and the new equilibrium quantity of Blu-rays?

The demand curve for a normal good shifts leftward if income ________ or the expected future price ________.

Which of the following always lowers the equilibrium price?

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

What leads to a decrease in the quantity supplied of a good or service?

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).

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.

The observation that the demand curve for grape jelly shifts rightward every time the price of peanut butter falls means that grape jelly and peanut butter are

If house purchases and renting an apartment are substitutes, then an increase in the price of a new house results in a rise in the rent charged for apartments.

When the price is less than the equilibrium price

Wants, as opposed to demands

Which of the following always raises the equilibrium price?

Which of the following would NOT shift the demand curve for turkey?

What are substitutes in production?

A decrease in the expected future price of cars

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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

The demand curve for a normal good shifts leftward if income or the expected future price .

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.