Question 1

Consumers' income declines and, as a result, the demand for margarine increases. Is margarine a normal or an inferior good? Explain.

Accepted Answer

Margarine is an inferior good.

Question 2

Suppose that people find out that eating more fish improves their health, leading them to increase their demand for fish. As a result, the equilibrium price of fish ________ and the equilibrium quantity ________.

Accepted Answer

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

Question 3

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

Question 4

You observe that the price of a good rises and the quantity decreases. These observations can be the result of the

Accepted Answer

A)  demand curve shifting rightward. 
B)  demand curve shifting leftward. 
C)  supply curve shifting rightward. 
D)  supply curve shifting leftward. 
A)  demand curve shifting rightward. 
B)  demand curve shifting leftward. 
C)  supply curve shifting rightward. 
D)  supply curve shifting leftward.

Question 5

What is the difference between quantity supplied and supply?

Accepted Answer

Quantity supplied is the amount that peo

Question 6

There is a technological advance in the production of a good and simultaneously also an increase in the expected future price. Which of the following will happen?

Accepted Answer

A)  The equilibrium price will rise because the supply curve shifts rightward. 
B)  The equilibrium price falls because the supply curve shifts leftward. 
C)  The technological improvement shifts the supply curve rightward while the increase in the expected future price shifts the supply curve leftward. The net effect is not known. 
D)  The demand curve shifts rightward and the supply curve does not shift. 
A)  The equilibrium price will rise because the supply curve shifts rightward. 
B)  The equilibrium price falls because the supply curve shifts leftward. 
C)  The technological improvement shifts the supply curve rightward while the increase in the expected future price shifts the supply curve leftward. The net effect is not known. 
D)  The demand curve shifts rightward and the supply curve does not shift.

Question 7

"The recent hurricanes in Florida are bringing financial gain to California citrus growers. Due to extensive damage to the Florida citrus crop, California citrus products are commanding their highest prices ever." Which of the following statements best explains the economics of this quotation?

Accepted Answer

A)  The supply of Florida oranges decreased, causing their price to increase, which then increased the demand for substitute California oranges. 
B)  The supply of Florida oranges decreased, causing the supply of California oranges to increase and the price of California oranges to rise. 
C)  The demand for Florida oranges decreased because of the hurricanes, causing a greater demand for California oranges and an increase in the price of California oranges. 
D)  The demand for Florida oranges decreased, causing their prices to rise, therefore increasing the demand for California oranges. 
A)  The supply of Florida oranges decreased, causing their price to increase, which then increased the demand for substitute California oranges. 
B)  The supply of Florida oranges decreased, causing the supply of California oranges to increase and the price of California oranges to rise. 
C)  The demand for Florida oranges decreased because of the hurricanes, causing a greater demand for California oranges and an increase in the price of California oranges. 
D)  The demand for Florida oranges decreased, causing their prices to rise, therefore increasing the demand for California oranges.

Question 8

-The above figures show the market for oranges. Which figure(s) 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 9

Which of the following lists has variables that all shift a good's demand curve?

Accepted Answer

A)  price of the good, preferences, prices of substitution goods, income 
B)  income, preferences, number of buyers, price of complementary good 
C)  expectation of future price, price of the good, number of buyers, income 
D)  Both answers A and B are correct. 
A)  price of the good, preferences, prices of substitution goods, income 
B)  income, preferences, number of buyers, price of complementary good 
C)  expectation of future price, price of the good, number of buyers, income 
D)  Both answers A and B are correct.

Question 10

A ticket to see the Radio City Rockettes costs $90. You buy a ticket for $30 to see the New York Jets play football. The money price for

Accepted Answer

A)  the Rockettes ticket is $90 and the relative price is 3 Jets tickets per Rockette ticket. 
B)  the Rockettes ticket is 3 Jets tickets per Rockette ticket and the relative price is $90. 
C)  a Jets ticket is $30 and the relative price is 3 Rockettes tickets per Jets ticket. 
D)  a Jets ticket is $30 and $3 for a Rockettes ticket. 
A)  the Rockettes ticket is $90 and the relative price is 3 Jets tickets per Rockette ticket. 
B)  the Rockettes ticket is 3 Jets tickets per Rockette ticket and the relative price is $90. 
C)  a Jets ticket is $30 and the relative price is 3 Rockettes tickets per Jets ticket. 
D)  a Jets ticket is $30 and $3 for a Rockettes ticket.

Question 11

You observe that in the market for coffee that both the equilibrium price of coffee and the equilibrium quantity have increased. You predict that the demand for coffee

Accepted Answer

A)  has increased with no change in the supply of coffee. 
B)  has increased but it is not as large as the increase in supply. 
C)  has not changed but that the supply of coffee has decreased. 
D)  has increased less than supply of coffee has decreased. 
A)  has increased with no change in the supply of coffee. 
B)  has increased but it is not as large as the increase in supply. 
C)  has not changed but that the supply of coffee has decreased. 
D)  has increased less than supply of coffee has decreased.

Question 12

-The above figures show the market for gasoline. Which figure shows the effect of a nation-wide strike by municipal bus drivers, which causes more people to drive their cars to work?

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

-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

@#IMG-DLM& a) See the figure above. The equilibriu

Question 14

-The above table shows the demand schedule and supply schedule for chocolate chip cookies. An increase in income results in an increase in the demand for chocolate cookies by an amount of 3 pounds at every price. What are the new equilibrium quantity and equilibrium price?

Accepted Answer

A)  5 pounds, $4.00 per pound 
B)  5 pounds, $6.00 per pound 
C)  5 pounds, $5.00 per pound 
D)  4 pounds, $5.00 per pound 
A)  5 pounds, $4.00 per pound 
B)  5 pounds, $6.00 per pound 
C)  5 pounds, $5.00 per pound 
D)  4 pounds, $5.00 per pound

Question 15

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in the price of a substitute for fruit snacks?

Accepted Answer

A)  from point a to point e 
B)  from point a to point b 
C)  from point a to point c 
D)  from point a to point d 
A)  from point a to point e 
B)  from point a to point b 
C)  from point a to point c 
D)  from point a to point d

Question 16

-The above figure shows the market for pizza. Which figure shows the effect of an increase in the price of a complement such as soda?

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 17

If macaroni and cheese is an inferior good, then a decrease in income will result in

Accepted Answer

A)  an increase in the demand for macaroni and cheese. 
B)  a decrease in the demand for macaroni and cheese. 
C)  an increase in the supply of macaroni and cheese. 
D)  a decrease in the supply of macaroni and cheese. 
A)  an increase in the demand for macaroni and cheese. 
B)  a decrease in the demand for macaroni and cheese. 
C)  an increase in the supply of macaroni and cheese. 
D)  a decrease in the supply of macaroni and cheese.

Question 18

The price of a bag of corn chips is $3, and the price of a bottle of soda is $1. What is the relative price of a bottle of soda?

Accepted Answer

A)  3 bags of corn chips per bottle of soda 
B)  1/3 bag of corn chips per bottle of soda 
C)  $3 
D)  33¢ 
A)  3 bags of corn chips per bottle of soda 
B)  1/3 bag of corn chips per bottle of soda 
C)  $3 
D)  33¢

Question 19

Which of the following increases the supply of a product?

Accepted Answer

A)  a fall in the price of the product 
B)  a smaller number of sellers producing the product 
C)  an increase in foreign imports of the product 
D)  higher taxes imposed upon producers of the product 
A)  a fall in the price of the product 
B)  a smaller number of sellers producing the product 
C)  an increase in foreign imports of the product 
D)  higher taxes imposed upon producers of the product

Question 20

When graphing a demand curve for corn, we are showing the relationship between the quantity demanded of corn and the

Accepted Answer

A)  money price of corn. 
B)  relative price of corn. 
C)  income effect. 
D)  substitution effect. 
A)  money price of corn. 
B)  relative price of corn. 
C)  income effect. 
D)  substitution effect.

Consumers' income declines and, as a result, the demand for margarine increases. Is margarine a normal or an inferior good? Explain.

Suppose that people find out that eating more fish improves their health, leading them to increase their demand for fish. As a result, the equilibrium price of fish and the equilibrium quantity .

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

You observe that the price of a good rises and the quantity decreases. These observations can be the result of the

What is the difference between quantity supplied and supply?

There is a technological advance in the production of a good and simultaneously also an increase in the expected future price. Which of the following will happen?

"The recent hurricanes in Florida are bringing financial gain to California citrus growers. Due to extensive damage to the Florida citrus crop, California citrus products are commanding their highest prices ever." Which of the following statements best explains the economics of this quotation?

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

Which of the following lists has variables that all shift a good's demand curve?

A ticket to see the Radio City Rockettes costs $90. You buy a ticket for $30 to see the New York Jets play football. The money price for

You observe that in the market for coffee that both the equilibrium price of coffee and the equilibrium quantity have increased. You predict that the demand for coffee

-The above figures show the market for gasoline. Which figure shows the effect of a nation-wide strike by municipal bus drivers, which causes more people to drive their cars to work?

-The above table shows the demand schedule and supply schedule for chocolate chip cookies. An increase in income results in an increase in the demand for chocolate cookies by an amount of 3 pounds at every price. What are the new equilibrium quantity and equilibrium price?

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in the price of a substitute for fruit snacks?

-The above figure shows the market for pizza. Which figure shows the effect of an increase in the price of a complement such as soda?

If macaroni and cheese is an inferior good, then a decrease in income will result in

The price of a bag of corn chips is $3, and the price of a bottle of soda is $1. What is the relative price of a bottle of soda?

Which of the following increases the supply of a product?

When graphing a demand curve for corn, we are showing the relationship between the quantity demanded of corn and 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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 3: Demand and Supply

Consumers' income declines and, as a result, the demand for margarine increases. Is margarine a normal or an inferior good? Explain.

Suppose that people find out that eating more fish improves their health, leading them to increase their demand for fish. As a result, the equilibrium price of fish ________ and the equilibrium quantity ________.

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

You observe that the price of a good rises and the quantity decreases. These observations can be the result of the

What is the difference between quantity supplied and supply?

There is a technological advance in the production of a good and simultaneously also an increase in the expected future price. Which of the following will happen?

"The recent hurricanes in Florida are bringing financial gain to California citrus growers. Due to extensive damage to the Florida citrus crop, California citrus products are commanding their highest prices ever." Which of the following statements best explains the economics of this quotation?

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

Which of the following lists has variables that all shift a good's demand curve?

A ticket to see the Radio City Rockettes costs $90. You buy a ticket for $30 to see the New York Jets play football. The money price for

You observe that in the market for coffee that both the equilibrium price of coffee and the equilibrium quantity have increased. You predict that the demand for coffee

-The above figures show the market for gasoline. Which figure shows the effect of a nation-wide strike by municipal bus drivers, which causes more people to drive their cars to work?

-The above table shows the demand schedule and supply schedule for chocolate chip cookies. An increase in income results in an increase in the demand for chocolate cookies by an amount of 3 pounds at every price. What are the new equilibrium quantity and equilibrium price?

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in the price of a substitute for fruit snacks?

-The above figure shows the market for pizza. Which figure shows the effect of an increase in the price of a complement such as soda?

If macaroni and cheese is an inferior good, then a decrease in income will result in

The price of a bag of corn chips is $3, and the price of a bottle of soda is $1. What is the relative price of a bottle of soda?

Which of the following increases the supply of a product?

When graphing a demand curve for corn, we are showing the relationship between the quantity demanded of corn and 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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Suppose that people find out that eating more fish improves their health, leading them to increase their demand for fish. As a result, the equilibrium price of fish and the equilibrium quantity .