Question 1

A decrease in the demand for beef because of concerns over cholesterol results in

Accepted Answer

A)  lower beef prices. 
B)  higher beef prices. 
C)  an increase in the supply of beef. 
D)  an offsetting increase in the demand for beef if the price of beef falls. 
A)  lower beef prices. 
B)  higher beef prices. 
C)  an increase in the supply of beef. 
D)  an offsetting increase in the demand for beef if the price of beef falls.

Question 2

In the market for magazines, the "income effect" means that

Accepted Answer

A)  magazines are usually purchased by people with higher than average incomes. 
B)  a decrease in the price of a substitute product like books will make magazine readers feel a little poorer than they were before. 
C)  an increase in the price of magazines will reduce the total purchasing power of magazine readers, making them able to afford fewer magazines. 
D)  an increase in the price of magazines will raise the relative price of magazines to books, causing magazine readers to read more books and fewer magazines. 
A)  magazines are usually purchased by people with higher than average incomes. 
B)  a decrease in the price of a substitute product like books will make magazine readers feel a little poorer than they were before. 
C)  an increase in the price of magazines will reduce the total purchasing power of magazine readers, making them able to afford fewer magazines. 
D)  an increase in the price of magazines will raise the relative price of magazines to books, causing magazine readers to read more books and fewer magazines.

Question 3

If the price of product X falls and this change increases the demand for product Y, then

Accepted Answer

A)  X and Y are complements. 
B)  X and Y are substitutes. 
C)  X is an inferior good. 
D)  Y is an inferior good. 
A)  X and Y are complements. 
B)  X and Y are substitutes. 
C)  X is an inferior good. 
D)  Y is an inferior good.

Question 4

An increase in the demand for computers and a decrease in the number of sellers of computers will definitely

Accepted Answer

A)  increase the number of computers bought. 
B)  increase the price of a computer. 
C)  increase the price of a computer and the number of computers bought. 
D)  not change the price of a computer and increase the number of computers bought. 
A)  increase the number of computers bought. 
B)  increase the price of a computer. 
C)  increase the price of a computer and the number of computers bought. 
D)  not change the price of a computer and increase the number of computers bought.

Question 5

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 6

-In the above figure, if D2 is the demand curve, then a price of P3 would result in

Accepted Answer

A)  a shortage of Q3 - Q1. 
B)  a shortage of Q4 - Q3. 
C)  a surplus of Q3 - Q1. 
D)  a surplus of Q4 - Q0. 
A)  a shortage of Q3 - Q1. 
B)  a shortage of Q4 - Q3. 
C)  a surplus of Q3 - Q1. 
D)  a surplus of Q4 - Q0.

Question 7

Which of the following leads to a movement along the demand curve for spinach but does NOT shift the demand curve for spinach?

Accepted Answer

A)  a rise in the price of spinach 
B)  a newly discovered health benefit from eating spinach 
C)  an increase in the price of broccoli, a substitute for spinach 
D)  an increase in income for all spinach lovers 
A)  a rise in the price of spinach 
B)  a newly discovered health benefit from eating spinach 
C)  an increase in the price of broccoli, a substitute for spinach 
D)  an increase in income for all spinach lovers

Question 8

-The figure above shows the demand for fruit snacks. Which movement reflects a decrease in quantity demanded but NOT a decrease in demand?

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

Every spring, motorists do more driving than during the winter months. Every spring, the price of gasoline increases and the motorists buy more gasoline. This experience suggests that the

Accepted Answer

A)  "law of supply" does not always hold for necessities like gasoline. 
B)  "law of demand" does not always hold for necessities like gasoline. 
C)  laws of supply and demand are both contradicted for gasoline, though only during the spring driving season. 
D)  None of the above answers are correct. 
A)  "law of supply" does not always hold for necessities like gasoline. 
B)  "law of demand" does not always hold for necessities like gasoline. 
C)  laws of supply and demand are both contradicted for gasoline, though only during the spring driving season. 
D)  None of the above answers are correct.

Question 10

-The equilibrium quantity in the above figure is

Accepted Answer

A)  200 units. 
B)  300 units. 
C)  400 units. 
D)  600 units. 
A)  200 units. 
B)  300 units. 
C)  400 units. 
D)  600 units.

Question 11

-The figure illustrates the demand for and supply for jeans. Suppose jeans are a normal good and people's incomes increase. At the initial price of $50 for a pair of jeans, after the increase in income the quantity demanded is ________ than the equilibrium quantity and there is a ________ of jeans.

Accepted Answer

A)  greater; surplus 
B)  greater; shortage 
C)  less; surplus 
D)  less; shortage 
A)  greater; surplus 
B)  greater; shortage 
C)  less; surplus 
D)  less; shortage

Question 12

Sweatshirts and tee-shirts are complements in consumption and the price of a sweatshirt increases. As a result, the demand for

Accepted Answer

A)  sweatshirts will increase that is, the demand curve will shift rightward. 
B)  tee-shirts will increase that is, the demand curve will shift rightward. 
C)  sweatshirts will decrease that is, the demand curve will shift leftward. 
D)  tee-shirts will decrease that is, the demand curve will shift leftward. 
A)  sweatshirts will increase that is, the demand curve will shift rightward. 
B)  tee-shirts will increase that is, the demand curve will shift rightward. 
C)  sweatshirts will decrease that is, the demand curve will shift leftward. 
D)  tee-shirts will decrease that is, the demand curve will shift leftward.

Question 13

The quantity demanded of a good or service is the quantity that a consumer

Accepted Answer

A)  is willing to buy at a particular price during a given time period. 
B)  actually buys at a particular price during a given time period. 
C)  needs to buy at a particular price during a given time period. 
D)  should buy at a particular price during a given time period. 
A)  is willing to buy at a particular price during a given time period. 
B)  actually buys at a particular price during a given time period. 
C)  needs to buy at a particular price during a given time period. 
D)  should buy at a particular price during a given time period.

Question 14

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 15

Which of the following shifts the demand curve for movie downloads rightward?

Accepted Answer

A)  a decrease in the price of downloading a movie 
B)  a 10 percent increase in people's income if movie downloads are a normal good 
C)  a decrease in the price of cable television service 
D)  an increase in the quantity and quality of programming included in the basic cable television service package 
A)  a decrease in the price of downloading a movie 
B)  a 10 percent increase in people's income if movie downloads are a normal good 
C)  a decrease in the price of cable television service 
D)  an increase in the quantity and quality of programming included in the basic cable television service package

Question 16

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

Question 17

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 18

-The figure above shows the market for candy. People become more concerned that eating candy 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 D1 to D2 and the supply curve shifts from S1 to S2. 
C)  demand curve shifts from D2 to D1 and the supply curve shifts from S2 to S1. 
D)  demand curve does not shift, 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 D1 to D2 and the supply curve shifts from S1 to S2. 
C)  demand curve shifts from D2 to D1 and the supply curve shifts from S2 to S1. 
D)  demand curve does not shift, and the supply curve shifts from S1 to S2.

Question 19

When both the demand for a good increases and the supply of the good increases, the equilibrium quantity definitely increases.

Accepted Answer

A) True 
 B)False

Question 20

-The above figures show the market for oranges. Which figure(s) shows the effect of an increase in the price of bananas, a substitute for oranges?

Accepted Answer

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

A decrease in the demand for beef because of concerns over cholesterol results in

In the market for magazines, the "income effect" means that

If the price of product X falls and this change increases the demand for product Y, then

An increase in the demand for computers and a decrease in the number of sellers of computers will definitely

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

-In the above figure, if D₂ is the demand curve, then a price of P₃ would result in

Which of the following leads to a movement along the demand curve for spinach but does NOT shift the demand curve for spinach?

-The figure above shows the demand for fruit snacks. Which movement reflects a decrease in quantity demanded but NOT a decrease in demand?

Every spring, motorists do more driving than during the winter months. Every spring, the price of gasoline increases and the motorists buy more gasoline. This experience suggests that the

-The equilibrium quantity in the above figure is

-The figure illustrates the demand for and supply for jeans. Suppose jeans are a normal good and people's incomes increase. At the initial price of $50 for a pair of jeans, after the increase in income the quantity demanded is than the equilibrium quantity and there is a of jeans.

Sweatshirts and tee-shirts are complements in consumption and the price of a sweatshirt increases. As a result, the demand for

The quantity demanded of a good or service is the quantity that a consumer

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

Which of the following shifts the demand curve for movie downloads rightward?

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

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

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

When both the demand for a good increases and the supply of the good increases, the equilibrium quantity definitely increases.

-The above figures show the market for oranges. Which figure(s) shows the effect of an increase in the price of bananas, a substitute for oranges?

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

A decrease in the demand for beef because of concerns over cholesterol results in

In the market for magazines, the "income effect" means that

If the price of product X falls and this change increases the demand for product Y, then

An increase in the demand for computers and a decrease in the number of sellers of computers will definitely

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

-In the above figure, if D2 is the demand curve, then a price of P3 would result in

Which of the following leads to a movement along the demand curve for spinach but does NOT shift the demand curve for spinach?

-The figure above shows the demand for fruit snacks. Which movement reflects a decrease in quantity demanded but NOT a decrease in demand?

Every spring, motorists do more driving than during the winter months. Every spring, the price of gasoline increases and the motorists buy more gasoline. This experience suggests that the

-The equilibrium quantity in the above figure is

-The figure illustrates the demand for and supply for jeans. Suppose jeans are a normal good and people's incomes increase. At the initial price of $50 for a pair of jeans, after the increase in income the quantity demanded is ________ than the equilibrium quantity and there is a ________ of jeans.

Sweatshirts and tee-shirts are complements in consumption and the price of a sweatshirt increases. As a result, the demand for

The quantity demanded of a good or service is the quantity that a consumer

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

Which of the following shifts the demand curve for movie downloads rightward?

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

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

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

When both the demand for a good increases and the supply of the good increases, the equilibrium quantity definitely increases.

-The above figures show the market for oranges. Which figure(s) shows the effect of an increase in the price of bananas, a substitute for oranges?

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

-In the above figure, if D₂ is the demand curve, then a price of P₃ would result in

-The figure illustrates the demand for and supply for jeans. Suppose jeans are a normal good and people's incomes increase. At the initial price of $50 for a pair of jeans, after the increase in income the quantity demanded is than the equilibrium quantity and there is a of jeans.