Question 1

If macaroni and cheese is an inferior good, an increase in income will

Accepted Answer

A)  not affect the demand for macaroni and cheese. 
B)  decrease the demand for macaroni and cheese. 
C)  increase the demand for macaroni and cheese. 
D)  create no income effect. 
A)  not affect the demand for macaroni and cheese. 
B)  decrease the demand for macaroni and cheese. 
C)  increase the demand for macaroni and cheese. 
D)  create no income effect.

Question 2

An increase in price results in increase in supply but not an increase in the quantity supplied.

Accepted Answer

A) True 
 B)False

Question 3

Farmers can use their land to grow soy beans or corn. If the price of corn rises,

Accepted Answer

A)  the supply of soybeans decreases and the soybean supply curve shifts leftward. 
B)  the supply of soybeans increases. 
C)  the supply of corn increases and the corn supply curve shifts rightward. 
D)  the supply of corn increases. 
A)  the supply of soybeans decreases and the soybean supply curve shifts leftward. 
B)  the supply of soybeans increases. 
C)  the supply of corn increases and the corn supply curve shifts rightward. 
D)  the supply of corn increases.

Question 4

When the price of a good is

Accepted Answer

A)  below the equilibrium price, quantity supplied exceeds quantity demanded and price rises. 
B)  below the equilibrium price, quantity demanded exceeds quantity supplied and price falls. 
C)  above the equilibrium price, quantity supplied exceeds quantity demanded and price falls. 
D)  above the equilibrium price, quantity demanded exceeds quantity supplied and price rises. 
A)  below the equilibrium price, quantity supplied exceeds quantity demanded and price rises. 
B)  below the equilibrium price, quantity demanded exceeds quantity supplied and price falls. 
C)  above the equilibrium price, quantity supplied exceeds quantity demanded and price falls. 
D)  above the equilibrium price, quantity demanded exceeds quantity supplied and price rises.

Question 5

The law of demand implies that demand curves

Accepted Answer

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

Question 6

-The figure above shows supply curves for soft drinks. Suppose the economy is at point a. An increase in the number of suppliers would be shown as a movement from point a to a point such as

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 7

When supply decreases and demand does NOT change, the equilibrium quantity ________ and the equilibrium price ________.

Accepted Answer

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

Question 8

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in the price of a complement 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 9

-The above table gives the demand and supply schedules for cat food. If the supply increases by 20 tons at every price, what is the new equilibrium price and quantity?

Accepted Answer

The equilibrium price is $1.50 per pound

Question 10

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

Accepted Answer

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

Question 11

Which of the following is NOT held constant while moving along a supply curve?

Accepted Answer

A)  expected future prices 
B)  the number of sellers 
C)  the price of the good itself 
D)  prices of factors of production 
A)  expected future prices 
B)  the number of sellers 
C)  the price of the good itself 
D)  prices of factors of production

Question 12

How does an unusually warm winter affect the equilibrium price and quantity of gloves?

Accepted Answer

A)  It raises both the price and the quantity. 
B)  It raises the price and decreases the quantity. 
C)  It lowers the price and increases the quantity. 
D)  It lowers both the price and the quantity. 
A)  It raises both the price and the quantity. 
B)  It raises the price and decreases the quantity. 
C)  It lowers the price and increases the quantity. 
D)  It lowers both the price and the quantity.

Question 13

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

Accepted Answer

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

Question 14

If the money price of wheat increases and no other prices change, the

Accepted Answer

A)  relative price of wheat falls. 
B)  opportunity cost of wheat rises. 
C)  demand for wheat increases. 
D)  relative price of wheat is unaffected. 
A)  relative price of wheat falls. 
B)  opportunity cost of wheat rises. 
C)  demand for wheat increases. 
D)  relative price of wheat is unaffected.

Question 15

If a decrease in the price of gasoline increases the demand for large cars, then

Accepted Answer

A)  gasoline and large cars are substitutes in consumption. 
B)  gasoline and large cars are complements in consumption. 
C)  gasoline is an inferior good. 
D)  large cars are an inferior good. 
A)  gasoline and large cars are substitutes in consumption. 
B)  gasoline and large cars are complements in consumption. 
C)  gasoline is an inferior good. 
D)  large cars are an inferior good.

Question 16

Cupcakes and granola bars are substitutes in consumption. The price of a granola bar increases so the demand for

Accepted Answer

A)  granola bars will increase, that is, the demand curve will shift rightward. 
B)  cupcakes will increase, that is, the demand curve will shift rightward. 
C)  granola bars will decrease, that is, the demand curve will shift leftward. 
D)  cupcakes will decrease, that is, the demand curve will shift leftward. 
A)  granola bars will increase, that is, the demand curve will shift rightward. 
B)  cupcakes will increase, that is, the demand curve will shift rightward. 
C)  granola bars will decrease, that is, the demand curve will shift leftward. 
D)  cupcakes will decrease, that is, the demand curve will shift leftward.

Question 17

List the factors change demand and shift the demand curve. Tell what happens to demand and the demand curve when there is an increase in the factor.

Accepted Answer

One factor that changes demand is a chan

Question 18

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

Accepted Answer

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

Question 19

Last year a very severe ice storm hit the north counties of New York state, and the states of Vermont and Maine. Electric poles were down and no one had power for days. It was reported that the price of kerosene heaters skyrocketed and the number purchased increased during this time. Using a supply and demand diagram, show the impact of the ice storm on the market for kerosene heaters.

Accepted Answer

@#IMG-DLM& The demand for kerosene heate

Question 20

Which of the following pairs of goods are most likely substitutes?

Accepted Answer

A)  DVDs and DVD players 
B)  cola and lemon lime soda 
C)  lettuce and salad dressing 
D)  peanut butter and gasoline 
A)  DVDs and DVD players 
B)  cola and lemon lime soda 
C)  lettuce and salad dressing 
D)  peanut butter and gasoline

If macaroni and cheese is an inferior good, an increase in income will

An increase in price results in increase in supply but not an increase in the quantity supplied.

Farmers can use their land to grow soy beans or corn. If the price of corn rises,

When the price of a good is

The law of demand implies that demand curves

-The figure above shows supply curves for soft drinks. Suppose the economy is at point a. An increase in the number of suppliers would be shown as a movement from point a to a point such as

When supply decreases and demand does NOT change, the equilibrium quantity and the equilibrium price .

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

-The above table gives the demand and supply schedules for cat food. If the supply increases by 20 tons at every price, what is the new equilibrium price and quantity?

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

Which of the following is NOT held constant while moving along a supply curve?

How does an unusually warm winter affect the equilibrium price and quantity of gloves?

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

If the money price of wheat increases and no other prices change, the

If a decrease in the price of gasoline increases the demand for large cars, then

Cupcakes and granola bars are substitutes in consumption. The price of a granola bar increases so the demand for

List the factors change demand and shift the demand curve. Tell what happens to demand and the demand curve when there is an increase in the factor.

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

Which of the following pairs of goods are most likely substitutes?

What Is Economics

The Economic Problem

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 3: Demand and Supply

If macaroni and cheese is an inferior good, an increase in income will

An increase in price results in increase in supply but not an increase in the quantity supplied.

Farmers can use their land to grow soy beans or corn. If the price of corn rises,

When the price of a good is

The law of demand implies that demand curves

-The figure above shows supply curves for soft drinks. Suppose the economy is at point a. An increase in the number of suppliers would be shown as a movement from point a to a point such as

When supply decreases and demand does NOT change, the equilibrium quantity ________ and the equilibrium price ________.

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

-The above table gives the demand and supply schedules for cat food. If the supply increases by 20 tons at every price, what is the new equilibrium price and quantity?

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

Which of the following is NOT held constant while moving along a supply curve?

How does an unusually warm winter affect the equilibrium price and quantity of gloves?

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

If the money price of wheat increases and no other prices change, the

If a decrease in the price of gasoline increases the demand for large cars, then

Cupcakes and granola bars are substitutes in consumption. The price of a granola bar increases so the demand for

List the factors change demand and shift the demand curve. Tell what happens to demand and the demand curve when there is an increase in the factor.

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

Which of the following pairs of goods are most likely substitutes?

What Is Economics

The Economic Problem

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

When supply decreases and demand does NOT change, the equilibrium quantity and the equilibrium price .