Question 1

The law of demand states that the quantity of a good demanded varies

Accepted Answer

A)  inversely with its price. 
B)  inversely with the price of substitute goods. 
C)  directly with income. 
D)  directly with population. 
A)  inversely with its price. 
B)  inversely with the price of substitute goods. 
C)  directly with income. 
D)  directly with population.

Question 2

If the money price of hats rises and no other prices change, the I. relative price of a hat rises.
II) opportunity cost of a hat rises.

Accepted Answer

A)  only I 
B)  both I and II 
C)  only II 
D)  neither I nor II 
A)  only I 
B)  both I and II 
C)  only II 
D)  neither I nor II

Question 3

-In the figure above, a decrease in the quantity of oil supplied but NOT a decrease in the supply of oil is shown by a movement from

Accepted Answer

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

Question 4

-Suppose the market for Blu-rays has the demand and supply schedules shown in the table above. Suppose a decrease in the price of a Blu-ray player increases the quantity of disks demanded at each price by 20 million. What are the new equilibrium price and equilibrium quantity of Blu-rays?

Accepted Answer

The initial equilibrium price is $11.50

Question 5

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 6

If there is surplus of a good, then the quantity demanded ________ the quantity supplied and the price will ________.

Accepted Answer

A)  is less than; rise 
B)  is less than; fall 
C)  is greater than; rise 
D)  is greater than; fall 
A)  is less than; rise 
B)  is less than; fall 
C)  is greater than; rise 
D)  is greater than; fall

Question 7

Which of the following decreases the supply of popcorn?

Accepted Answer

A)  a decrease in the price of popcorn 
B)  an increase in the price of popcorn 
C)  a technological advance in the production of popcorn 
D)  a decrease in the number of popcorn producers 
A)  a decrease in the price of popcorn 
B)  an increase in the price of popcorn 
C)  a technological advance in the production of popcorn 
D)  a decrease in the number of popcorn producers

Question 8

-In the above figure, a price of $15 per dozen roses would result in a ________ so that the price of roses will ________.

Accepted Answer

A)  surplus; rise 
B)  surplus; fall 
C)  shortage; rise 
D)  shortage; fall 
A)  surplus; rise 
B)  surplus; fall 
C)  shortage; rise 
D)  shortage; fall

Question 9

Consumers can use either natural gas or heating oil to warm their houses. Suppose the price of natural gas increases. Use a demand and supply diagram to show the impact of the higher price of natural gas on the market for home heating oil.

Accepted Answer

@#IMG-DLM& Natural gas and home heating oil are su

Question 10

If the quantity demanded exceeds the quantity supplied, then there is

Accepted Answer

A)  a shortage and the price is below the equilibrium price. 
B)  a shortage and the price is above the equilibrium price. 
C)  a surplus and the price is below the equilibrium price. 
D)  a surplus and the price is above the equilibrium price. 
A)  a shortage and the price is below the equilibrium price. 
B)  a shortage and the price is above the equilibrium price. 
C)  a surplus and the price is below the equilibrium price. 
D)  a surplus and the price is above the equilibrium price.

Question 11

Good A and good B are substitutes in production. The demand for good A decreases, which lowers the price of good A. The decrease in the price of good A

Accepted Answer

A)  decreases the supply of good B. 
B)  increases the supply of good B. 
C)  decreases the demand for good B. 
D)  increases the demand for good B. 
A)  decreases the supply of good B. 
B)  increases the supply of good B. 
C)  decreases the demand for good B. 
D)  increases the demand for good B.

Question 12

The Market for Wapanzo Beans
Quantity Demanded Price Quantity Supplied
(millions of pounds (dollars per (millions of pounds
per year) pound) per year)
  
-Refer to the table above. Suppose that in normal years demand is represented by Case 2 and supply is represented by Case B. In a normal year the price of wapanzo beans will be

Accepted Answer

A)  $1 per pound. 
B)  $2 per pound. 
C)  $3 per pound. 
D)  $4 per pound. 
A)  $1 per pound. 
B)  $2 per pound. 
C)  $3 per pound. 
D)  $4 per pound.

Question 13

A changes in which of the following shifts the demand curve for hamburgers?

Accepted Answer

A)  an increase in the price of the meat used to produce hamburgers 
B)  an increase in the price of a hamburger 
C)  a fall in the price of french fries, a complement for hamburgers 
D)  an increase in the number of hamburger restaurants 
A)  an increase in the price of the meat used to produce hamburgers 
B)  an increase in the price of a hamburger 
C)  a fall in the price of french fries, a complement for hamburgers 
D)  an increase in the number of hamburger restaurants

Question 14

-The above figure shows the market for hamburger. Which panel shows the effect of a drought in "cattle country"?

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 15

Crude oil can be refined into home heating oil or gasoline. If very cold weather caused the price of home heating oil to increase then, the

Accepted Answer

A)  supply of gasoline would increase. 
B)  demand for gasoline would increase. 
C)  equilibrium price of gasoline would rise. 
D)  Both answers A and C are correct. 
A)  supply of gasoline would increase. 
B)  demand for gasoline would increase. 
C)  equilibrium price of gasoline would rise. 
D)  Both answers A and C are correct.

Question 16

Blank DVDs and prerecorded DVDs are substitutes in production. An increase in the price of a blank DVD will lead to

Accepted Answer

A)  an increase in the supply of prerecorded DVDs. 
B)  a decrease in the supply of prerecorded DVDs. 
C)  an increase in the quantity supplied of prerecorded DVDs but not in the supply of prerecorded DVDs. 
D)  a decrease in the quantity supplied of prerecorded DVDs but not in the supply of prerecorded DVDs. 
A)  an increase in the supply of prerecorded DVDs. 
B)  a decrease in the supply of prerecorded DVDs. 
C)  an increase in the quantity supplied of prerecorded DVDs but not in the supply of prerecorded DVDs. 
D)  a decrease in the quantity supplied of prerecorded DVDs but not in the supply of prerecorded DVDs.

Question 17

Which of the following statements is CORRECT?

Accepted Answer

A)  When both demand and supply increase, the quantity decreases and the price might rise, fall, or remain the same. 
B)  When both demand and supply increase, the price rises and the quantity might increase, decrease, or remain the same. 
C)  When both demand and supply decrease, the quantity increases and the price might rise, fall, or remain the same. 
D)  When both demand and supply decrease, the quantity decreases and the price might rise, fall, or remain the same. 
A)  When both demand and supply increase, the quantity decreases and the price might rise, fall, or remain the same. 
B)  When both demand and supply increase, the price rises and the quantity might increase, decrease, or remain the same. 
C)  When both demand and supply decrease, the quantity increases and the price might rise, fall, or remain the same. 
D)  When both demand and supply decrease, the quantity decreases and the price might rise, fall, or remain the same.

Question 18

Pizza and hamburgers are substitutes for consumers. A fall in the price of a pizza ________ the price of a hamburger and ________ the quantity of hamburgers.

Accepted Answer

A)  raises; increases 
B)  raises; decreases 
C)  lowers; increases 
D)  lowers; decreases 
A)  raises; increases 
B)  raises; decreases 
C)  lowers; increases 
D)  lowers; decreases

Question 19

If demand increases and supply decreases, what is the effect on equilibrium price and equilibrium quantity?

Accepted Answer

A)  The price falls and the quantity might increase, decrease, or remain the same. 
B)  The price rises and the quantity might increase, decrease or remain the same. 
C)  The quantity decreases and the price might rise, fall, or remain the same. 
D)  The quantity increases and the price might rise, fall, or remain the same. 
A)  The price falls and the quantity might increase, decrease, or remain the same. 
B)  The price rises and the quantity might increase, decrease or remain the same. 
C)  The quantity decreases and the price might rise, fall, or remain the same. 
D)  The quantity increases and the price might rise, fall, or remain the same.

Question 20

Producers of tablet computers will be able to lower the wage rate that they pay to their workers. You are asked to predict the effects on the supply of tablet computers, and the price of a tablet computer. You predict that the supply curve shifts

Accepted Answer

A)  rightward, and the price is constant. 
B)  leftward, and the price is constant. 
C)  rightward, and the price falls. 
D)  leftward, and the price rises. 
A)  rightward, and the price is constant. 
B)  leftward, and the price is constant. 
C)  rightward, and the price falls. 
D)  leftward, and the price rises.

The law of demand states that the quantity of a good demanded varies

If the money price of hats rises and no other prices change, the I. relative price of a hat rises. II) opportunity cost of a hat rises.

-In the figure above, a decrease in the quantity of oil supplied but NOT a decrease in the supply of oil is shown by a movement from

-Suppose the market for Blu-rays has the demand and supply schedules shown in the table above. Suppose a decrease in the price of a Blu-ray player increases the quantity of disks demanded at each price by 20 million. What are the new equilibrium price and equilibrium quantity of Blu-rays?

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

If there is surplus of a good, then the quantity demanded the quantity supplied and the price will .

Which of the following decreases the supply of popcorn?

-In the above figure, a price of $15 per dozen roses would result in a so that the price of roses will .

Consumers can use either natural gas or heating oil to warm their houses. Suppose the price of natural gas increases. Use a demand and supply diagram to show the impact of the higher price of natural gas on the market for home heating oil.

If the quantity demanded exceeds the quantity supplied, then there is

Good A and good B are substitutes in production. The demand for good A decreases, which lowers the price of good A. The decrease in the price of good A

A changes in which of the following shifts the demand curve for hamburgers?

-The above figure shows the market for hamburger. Which panel shows the effect of a drought in "cattle country"?

Crude oil can be refined into home heating oil or gasoline. If very cold weather caused the price of home heating oil to increase then, the

Blank DVDs and prerecorded DVDs are substitutes in production. An increase in the price of a blank DVD will lead to

Which of the following statements is CORRECT?

Pizza and hamburgers are substitutes for consumers. A fall in the price of a pizza the price of a hamburger and the quantity of hamburgers.

If demand increases and supply decreases, what is the effect on equilibrium price and equilibrium quantity?

Producers of tablet computers will be able to lower the wage rate that they pay to their workers. You are asked to predict the effects on the supply of tablet computers, and the price of a tablet computer. You predict that the supply curve shifts

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

The law of demand states that the quantity of a good demanded varies

If the money price of hats rises and no other prices change, the I. relative price of a hat rises. II) opportunity cost of a hat rises.

-In the figure above, a decrease in the quantity of oil supplied but NOT a decrease in the supply of oil is shown by a movement from

-Suppose the market for Blu-rays has the demand and supply schedules shown in the table above. Suppose a decrease in the price of a Blu-ray player increases the quantity of disks demanded at each price by 20 million. What are the new equilibrium price and equilibrium quantity of Blu-rays?

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

If there is surplus of a good, then the quantity demanded ________ the quantity supplied and the price will ________.

Which of the following decreases the supply of popcorn?

-In the above figure, a price of $15 per dozen roses would result in a ________ so that the price of roses will ________.

Consumers can use either natural gas or heating oil to warm their houses. Suppose the price of natural gas increases. Use a demand and supply diagram to show the impact of the higher price of natural gas on the market for home heating oil.

If the quantity demanded exceeds the quantity supplied, then there is

Good A and good B are substitutes in production. The demand for good A decreases, which lowers the price of good A. The decrease in the price of good A

A changes in which of the following shifts the demand curve for hamburgers?

-The above figure shows the market for hamburger. Which panel shows the effect of a drought in "cattle country"?

Crude oil can be refined into home heating oil or gasoline. If very cold weather caused the price of home heating oil to increase then, the

Blank DVDs and prerecorded DVDs are substitutes in production. An increase in the price of a blank DVD will lead to

Which of the following statements is CORRECT?

Pizza and hamburgers are substitutes for consumers. A fall in the price of a pizza ________ the price of a hamburger and ________ the quantity of hamburgers.

If demand increases and supply decreases, what is the effect on equilibrium price and equilibrium quantity?

Producers of tablet computers will be able to lower the wage rate that they pay to their workers. You are asked to predict the effects on the supply of tablet computers, and the price of a tablet computer. You predict that the supply curve shifts

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 there is surplus of a good, then the quantity demanded the quantity supplied and the price will .

-In the above figure, a price of $15 per dozen roses would result in a so that the price of roses will .

Pizza and hamburgers are substitutes for consumers. A fall in the price of a pizza the price of a hamburger and the quantity of hamburgers.