Question 1

-The above figures show the market for oranges. Which figure(s) shows the effect of a nation-wide consumer boycott of eating oranges?

Accepted Answer

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

Question 2

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 3

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. If it is discovered that wapanzo beans help prevent cancer, then supply will ________ and demand will ________.

Accepted Answer

A)  become case C; become case 1 
B)  become case C; stay at case 2 
C)  stay at case B; become case 1 
D)  become case A; become case 1 
A)  become case C; become case 1 
B)  become case C; stay at case 2 
C)  stay at case B; become case 1 
D)  become case A; become case 1

Question 4

During the mid-2000s, the average price of a used car fell by nearly $500 and the quantity sold nation-wide decreased by several thousands each year. This set of results is a contradiction of the law of demand.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following leads to a movement along the supply curve for shredded wheat but does NOT shift the supply curve for shredded wheat?

Accepted Answer

A)  a fall in the price of shredded wheat 
B)  an increase in the cost of machinery used to shred wheat 
C)  perfect weather conditions that resulted in a large wheat crop 
D)  a decrease in the number of shredded wheat producers 
A)  a fall in the price of shredded wheat 
B)  an increase in the cost of machinery used to shred wheat 
C)  perfect weather conditions that resulted in a large wheat crop 
D)  a decrease in the number of shredded wheat producers

Question 6

Until 2007, the price of sport utility vehicles (SUVs) rose and each year more were purchased. This experience suggests that

Accepted Answer

A)  there must have been technological advances in the way SUVs are produced. 
B)  the "law of demand" does not hold true in this market. 
C)  there must have movement leftward along the supply curve for SUVs. 
D)  there must have been a rightward shift of the demand curve for SUVs. 
A)  there must have been technological advances in the way SUVs are produced. 
B)  the "law of demand" does not hold true in this market. 
C)  there must have movement leftward along the supply curve for SUVs. 
D)  there must have been a rightward shift of the demand curve for SUVs.

Question 7

What is the difference between quantity supplied and supply?

Accepted Answer

Quantity supplied is the amount that peo

Question 8

As the price of a pound of peanuts falls, the

Accepted Answer

A)  supply of peanuts increases. 
B)  supply of peanuts decreases. 
C)  quantity of peanuts supplied increases. 
D)  quantity of peanuts supplied decreases. 
A)  supply of peanuts increases. 
B)  supply of peanuts decreases. 
C)  quantity of peanuts supplied increases. 
D)  quantity of peanuts supplied decreases.

Question 9

-The above figures show the market for gasoline. Which figure(s) shows the effect of a freezing cold winter which drives up the price of home heating oil (a substitute in production for gasoline because each is made from crude oil)?

Accepted Answer

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

Question 10

-The table gives the demand and supply schedules for boat rides. If the supply of boat rides increases by 20 rides a day, the price will

Accepted Answer

A)  remain unchanged. 
B)  fall to $6 a ride. 
C)  rise to $6 a ride. 
D)  rise to $10 a ride. 
A)  remain unchanged. 
B)  fall to $6 a ride. 
C)  rise to $6 a ride. 
D)  rise to $10 a ride.

Question 11

When the price of a pizza decreases from $12 to $10, it is definitely the case that the

Accepted Answer

A)  income effect means people buy less pizza. 
B)  substitution effect means people buy more pizza. 
C)  quantity demanded of pizza will not change. 
D)  None of the above answers is correct. 
A)  income effect means people buy less pizza. 
B)  substitution effect means people buy more pizza. 
C)  quantity demanded of pizza will not change. 
D)  None of the above answers is correct.

Question 12

-Using the above figure, suppose that roses are a normal good. If there is an increase in income

Accepted Answer

A)  the equilibrium price will rise above $25 per dozen roses. 
B)  the equilibrium quantity will decrease below 10 dozen roses. 
C)  we cannot predict what will happen to the equilibrium price. 
D)  we cannot predict what will happen to the equilibrium quantity. 
A)  the equilibrium price will rise above $25 per dozen roses. 
B)  the equilibrium quantity will decrease below 10 dozen roses. 
C)  we cannot predict what will happen to the equilibrium price. 
D)  we cannot predict what will happen to the equilibrium quantity.

Question 13

If more people buy hybrid cars that have high gas mileage, the equilibrium price of gasoline will ________ and the equilibrium quantity will ________.

Accepted Answer

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

Question 14

If the price of aluminum used to make bicycles increases, the price of a bicycle rises because of a

Accepted Answer

A)  rightward shift of the demand curve for bicycles. 
B)  rightward shift of the supply curve of bicycles. 
C)  leftward shift of the demand curve for bicycles. 
D)  leftward shift of the supply curve of bicycles. 
A)  rightward shift of the demand curve for bicycles. 
B)  rightward shift of the supply curve of bicycles. 
C)  leftward shift of the demand curve for bicycles. 
D)  leftward shift of the supply curve of bicycles.

Question 15

Joe pays $8,000.00 in tuition. The 8,000 dollar tuition Joe pays is an example of what economists call

Accepted Answer

A)  a relative price. 
B)  a money price. 
C)  an indexed price. 
D)  an opportunity price. 
A)  a relative price. 
B)  a money price. 
C)  an indexed price. 
D)  an opportunity price.

Question 16

If house purchases and renting an apartment are substitutes, then an increase in the price of a new house results in a rise in the rent charged for apartments.

Accepted Answer

A) True 
 B)False

Question 17

You notice that the price and quantity of wheat both decrease. This observation can be the result of the

Accepted Answer

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

Question 18

-In the above figure, if D2 is the original demand curve and the price of a substitute in consumption rises, which price and quantity might result?

Accepted Answer

A)  point a, with price P2 and quantity Q2 
B)  point b, with price P1 and quantity Q1 
C)  point c, with price P3 and quantity Q3 
D)  point d, with price P1 and quantity Q3 
A)  point a, with price P2 and quantity Q2 
B)  point b, with price P1 and quantity Q1 
C)  point c, with price P3 and quantity Q3 
D)  point d, with price P1 and quantity Q3

Question 19

-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 20

Personal computers are becoming less expensive as new technology reduces the cost of production. In a supply and demand model, explain the effects of the technological innovations and their effect on the quantity of computers.

Accepted Answer

Advances in technology increase the supp

-The above figures show the market for oranges. Which figure(s) shows the effect of a nation-wide consumer boycott of eating oranges?

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

During the mid-2000s, the average price of a used car fell by nearly $500 and the quantity sold nation-wide decreased by several thousands each year. This set of results is a contradiction of the law of demand.

Which of the following leads to a movement along the supply curve for shredded wheat but does NOT shift the supply curve for shredded wheat?

Until 2007, the price of sport utility vehicles (SUVs) rose and each year more were purchased. This experience suggests that

What is the difference between quantity supplied and supply?

As the price of a pound of peanuts falls, the

-The above figures show the market for gasoline. Which figure(s) shows the effect of a freezing cold winter which drives up the price of home heating oil (a substitute in production for gasoline because each is made from crude oil)?

-The table gives the demand and supply schedules for boat rides. If the supply of boat rides increases by 20 rides a day, the price will

When the price of a pizza decreases from $12 to $10, it is definitely the case that the

-Using the above figure, suppose that roses are a normal good. If there is an increase in income

If more people buy hybrid cars that have high gas mileage, the equilibrium price of gasoline will and the equilibrium quantity will .

If the price of aluminum used to make bicycles increases, the price of a bicycle rises because of a

Joe pays $8,000.00 in tuition. The 8,000 dollar tuition Joe pays is an example of what economists call

If house purchases and renting an apartment are substitutes, then an increase in the price of a new house results in a rise in the rent charged for apartments.

You notice that the price and quantity of wheat both decrease. This observation can be the result of the

-In the above figure, if D₂ is the original demand curve and the price of a substitute in consumption rises, which price and quantity might result?

-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?

Personal computers are becoming less expensive as new technology reduces the cost of production. In a supply and demand model, explain the effects of the technological innovations and their effect on the quantity of computers.

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 above figures show the market for oranges. Which figure(s) shows the effect of a nation-wide consumer boycott of eating oranges?

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

During the mid-2000s, the average price of a used car fell by nearly $500 and the quantity sold nation-wide decreased by several thousands each year. This set of results is a contradiction of the law of demand.

Which of the following leads to a movement along the supply curve for shredded wheat but does NOT shift the supply curve for shredded wheat?

Until 2007, the price of sport utility vehicles (SUVs) rose and each year more were purchased. This experience suggests that

What is the difference between quantity supplied and supply?

As the price of a pound of peanuts falls, the

-The above figures show the market for gasoline. Which figure(s) shows the effect of a freezing cold winter which drives up the price of home heating oil (a substitute in production for gasoline because each is made from crude oil)?

-The table gives the demand and supply schedules for boat rides. If the supply of boat rides increases by 20 rides a day, the price will

When the price of a pizza decreases from $12 to $10, it is definitely the case that the

-Using the above figure, suppose that roses are a normal good. If there is an increase in income

If more people buy hybrid cars that have high gas mileage, the equilibrium price of gasoline will ________ and the equilibrium quantity will ________.

If the price of aluminum used to make bicycles increases, the price of a bicycle rises because of a

Joe pays $8,000.00 in tuition. The 8,000 dollar tuition Joe pays is an example of what economists call

If house purchases and renting an apartment are substitutes, then an increase in the price of a new house results in a rise in the rent charged for apartments.

You notice that the price and quantity of wheat both decrease. This observation can be the result of the

-In the above figure, if D2 is the original demand curve and the price of a substitute in consumption rises, which price and quantity might result?

-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?

Personal computers are becoming less expensive as new technology reduces the cost of production. In a supply and demand model, explain the effects of the technological innovations and their effect on the quantity of computers.

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 more people buy hybrid cars that have high gas mileage, the equilibrium price of gasoline will and the equilibrium quantity will .

-In the above figure, if D₂ is the original demand curve and the price of a substitute in consumption rises, which price and quantity might result?