Question 1

When supply and demand both increase, the

Accepted Answer

A)  quantity definitely decreases. 
B)  quantity definitely increases. 
C)  price definitely increases. 
D)  price definitely decreases. 
A)  quantity definitely decreases. 
B)  quantity definitely increases. 
C)  price definitely increases. 
D)  price definitely decreases.

Question 2

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

Accepted Answer

The quantity supplie

Question 3

Which of the following raises the price of a used car and increases the equilibrium quantity sold?

Accepted Answer

A)  a new 8 percent federal excise tax placed on all new car purchases 
B)  an increase in wages for used car salespeople 
C)  a special rebate program on all new cars 
D)  None of the above answers is correct. 
A)  a new 8 percent federal excise tax placed on all new car purchases 
B)  an increase in wages for used car salespeople 
C)  a special rebate program on all new cars 
D)  None of the above answers is correct.

Question 4

The supply curve indicates the minimum quantity that a producer would be willing to supply at alternative prices.

Accepted Answer

A) True 
 B)False

Question 5

If shoes rise in price, the demand curve for shoes ________ and the quantity of shoes demanded ________.

Accepted Answer

A)  shifts leftward; decreases 
B)  shifts leftward; does not change 
C)  does not shift; decreases 
D)  does not shift; does not change 
A)  shifts leftward; decreases 
B)  shifts leftward; does not change 
C)  does not shift; decreases 
D)  does not shift; does not change

Question 6

An increase in the number of producers of gruel ________ the supply of gruel and shifts the supply curve of gruel ________.

Accepted Answer

A)  increases; rightward 
B)  increases; leftward 
C)  decreases; rightward 
D)  decreases; leftward 
A)  increases; rightward 
B)  increases; leftward 
C)  decreases; rightward 
D)  decreases; leftward

Question 7

A severe drought has damaged this year's lettuce crop. The initial effect on the lettuce market is a

Accepted Answer

A)  decrease in the demand for lettuce. 
B)  decrease in the supply of lettuce. 
C)  decrease in both the demand and supply of lettuce. 
D)  rightward movement along the demand curve for lettuce. 
A)  decrease in the demand for lettuce. 
B)  decrease in the supply of lettuce. 
C)  decrease in both the demand and supply of lettuce. 
D)  rightward movement along the demand curve for lettuce.

Question 8

-Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. Which of the following could result in a movement to point d?

Accepted Answer

A)  a decrease in income 
B)  an increase in the relative price of a soft drink 
C)  a decrease in the relative price of a soft drink 
D)  a decrease in the price of bottled water 
A)  a decrease in income 
B)  an increase in the relative price of a soft drink 
C)  a decrease in the relative price of a soft drink 
D)  a decrease in the price of bottled water

Question 9

There is a technological advance in the production of ice cream. As a result, the supply curve of ice cream shifts ________ and ________.

Accepted Answer

A)  leftward; both the equilibrium price and equilibrium quantity fall 
B)  rightward; both the equilibrium price and equilibrium quantity fall 
C)  rightward; the equilibrium price falls while the equilibrium quantity increases 
D)  rightward; both the equilibrium price and equilibrium quantity rise 
A)  leftward; both the equilibrium price and equilibrium quantity fall 
B)  rightward; both the equilibrium price and equilibrium quantity fall 
C)  rightward; the equilibrium price falls while the equilibrium quantity increases 
D)  rightward; both the equilibrium price and equilibrium quantity rise

Question 10

If technological advances lower the cost of computer chips, in the market for computers the equilibrium price will ________ and the equilibrium quantity will ________.

Accepted Answer

A)  fall; increase 
B)  fall; decrease 
C)  rise; increase 
D)  rise; decrease 
A)  fall; increase 
B)  fall; decrease 
C)  rise; increase 
D)  rise; decrease

Question 11

If the price of a video download is below its equilibrium price, the quantity supplied is ________ than the quantity demanded. If the price of a video download is above its equilibrium price, the quantity supplied is ________ than the quantity demanded.

Accepted Answer

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

Question 12

A movement along the demand curve shows a change in demand.

Accepted Answer

A) True 
 B)False

Question 13

The interaction of supply and demand explains

Accepted Answer

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

Question 14

-The table shows the demand and supply schedules for jeans.

Accepted Answer

A)  At $60 a pair, there is a shortage of jeans and the price will fall. 
B)  At $60 a pair, there is a surplus of jeans and the price will rise. 
C)  At $40 a pair, there is a shortage of jeans and the price will rise. 
D)  At $40 a pair, there is a shortage of jeans and the price will fall. 
A)  At $60 a pair, there is a shortage of jeans and the price will fall. 
B)  At $60 a pair, there is a surplus of jeans and the price will rise. 
C)  At $40 a pair, there is a shortage of jeans and the price will rise. 
D)  At $40 a pair, there is a shortage of jeans and the price will fall.

Question 15

-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 16

In 2014, the price of peanuts was rising, which lead peanut butter sellers and peanut butter buyers to expect the price of peanut butter would rise in the future. Consequently, in the current market for peanut butter there was ________ which resulted in a ________ in the price of peanut butter and ________ in the quantity of peanut butter.

Accepted Answer

A)  a decrease in supply of peanut butter and an increase in demand for peanut butter; rise; an increase, decrease or possibly no change 
B)  a decrease in supply of peanut butter and a decrease in demand for peanut butter; rise, fall, or possibly no change; a decrease 
C)  an increase in supply of peanut butter and a decrease in demand for peanut butter; fall; an increase, decrease or possibly no change 
D)  a decrease in supply of peanut butter and an increase in demand for peanut butter; fall; an increase, decrease or possibly no change 
A)  a decrease in supply of peanut butter and an increase in demand for peanut butter; rise; an increase, decrease or possibly no change 
B)  a decrease in supply of peanut butter and a decrease in demand for peanut butter; rise, fall, or possibly no change; a decrease 
C)  an increase in supply of peanut butter and a decrease in demand for peanut butter; fall; an increase, decrease or possibly no change 
D)  a decrease in supply of peanut butter and an increase in demand for peanut butter; fall; an increase, decrease or possibly no change

Question 17

Growers expect that the price of a bushel of wheat will increase in one month. This belief results in

Accepted Answer

A)  an increase in current supply of wheat. 
B)  a decrease in current supply of wheat. 
C)  a decrease in future supply of wheat. 
D)  no change in current or future supply of wheat. 
A)  an increase in current supply of wheat. 
B)  a decrease in current supply of wheat. 
C)  a decrease in future supply of wheat. 
D)  no change in current or future supply of wheat.

Question 18

Coffee and sugar are complements. If a poor sugar harvest leads to an increase in the price of sugar, there will also be

Accepted Answer

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

Question 19

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.

Question 20

-The figure above shows the demand for fruit snacks. Which movement reflects 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

When supply and demand both increase, the

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

Which of the following raises the price of a used car and increases the equilibrium quantity sold?

The supply curve indicates the minimum quantity that a producer would be willing to supply at alternative prices.

If shoes rise in price, the demand curve for shoes and the quantity of shoes demanded .

An increase in the number of producers of gruel the supply of gruel and shifts the supply curve of gruel .

A severe drought has damaged this year's lettuce crop. The initial effect on the lettuce market is a

-Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. Which of the following could result in a movement to point d?

There is a technological advance in the production of ice cream. As a result, the supply curve of ice cream shifts and .

If technological advances lower the cost of computer chips, in the market for computers the equilibrium price will and the equilibrium quantity will .

If the price of a video download is below its equilibrium price, the quantity supplied is than the quantity demanded. If the price of a video download is above its equilibrium price, the quantity supplied is than the quantity demanded.

A movement along the demand curve shows a change in demand.

The interaction of supply and demand explains

-The table shows the demand and supply schedules for jeans.

Growers expect that the price of a bushel of wheat will increase in one month. This belief results in

Coffee and sugar are complements. If a poor sugar harvest leads to an increase in the price of sugar, there will also be

A decrease in the expected future price of cars

-The figure above shows the demand for fruit snacks. Which movement reflects a decrease in demand?

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

When supply and demand both increase, the

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

Which of the following raises the price of a used car and increases the equilibrium quantity sold?

The supply curve indicates the minimum quantity that a producer would be willing to supply at alternative prices.

If shoes rise in price, the demand curve for shoes ________ and the quantity of shoes demanded ________.

An increase in the number of producers of gruel ________ the supply of gruel and shifts the supply curve of gruel ________.

A severe drought has damaged this year's lettuce crop. The initial effect on the lettuce market is a

-Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. Which of the following could result in a movement to point d?

There is a technological advance in the production of ice cream. As a result, the supply curve of ice cream shifts ________ and ________.

If technological advances lower the cost of computer chips, in the market for computers the equilibrium price will ________ and the equilibrium quantity will ________.

If the price of a video download is below its equilibrium price, the quantity supplied is ________ than the quantity demanded. If the price of a video download is above its equilibrium price, the quantity supplied is ________ than the quantity demanded.

A movement along the demand curve shows a change in demand.

The interaction of supply and demand explains

-The table shows the demand and supply schedules for jeans.

Growers expect that the price of a bushel of wheat will increase in one month. This belief results in

Coffee and sugar are complements. If a poor sugar harvest leads to an increase in the price of sugar, there will also be

A decrease in the expected future price of cars

-The figure above shows the demand for fruit snacks. Which movement reflects a decrease in demand?

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

If shoes rise in price, the demand curve for shoes and the quantity of shoes demanded .

An increase in the number of producers of gruel the supply of gruel and shifts the supply curve of gruel .

There is a technological advance in the production of ice cream. As a result, the supply curve of ice cream shifts and .

If technological advances lower the cost of computer chips, in the market for computers the equilibrium price will and the equilibrium quantity will .

If the price of a video download is below its equilibrium price, the quantity supplied is than the quantity demanded. If the price of a video download is above its equilibrium price, the quantity supplied is than the quantity demanded.