Question 1

One would speak of a change in the quantity of a good supplied, rather than a change in supply, if

Accepted Answer

A) supplier expectations about future prices change. 
B) the price of the good changes. 
C) the cost of producing the good changes. 
D) prices of substitutes in production change. 
A) supplier expectations about future prices change. 
B) the price of the good changes. 
C) the cost of producing the good changes. 
D) prices of substitutes in production change. B

Question 2

Hurricane Juan hit Halifax in 2003.The storm did over $300 million in damage.In the effort to repair the damage done by the storm, the prices of basic building materials and contractors increased dramatically.Many residents complained of profiteering and price gouging by contractors and home improvement stores.Which of the following offers the best explanation of the price increases people were seeing?

Accepted Answer

A) The hurricane reduced the number of suppliers of building materials. 
B) The hurricane created an artificial shortage of building materials. 
C) The hurricane caused an increase in the demand for building materials. 
D) There was a reduction in supply as firms shipped plywood and other materials to locations not affected by the storm. 
A) The hurricane reduced the number of suppliers of building materials. 
B) The hurricane created an artificial shortage of building materials. 
C) The hurricane caused an increase in the demand for building materials. 
D) There was a reduction in supply as firms shipped plywood and other materials to locations not affected by the storm. C

Question 3

A decrease in the price of GPS systems will result in

Accepted Answer

A) a smaller quantity of GPS systems supplied. 
B) a larger quantity of GPS systems supplied. 
C) a decrease in the demand for GPS systems. 
D) an increase in the supply of GPS systems. 
A) a smaller quantity of GPS systems supplied. 
B) a larger quantity of GPS systems supplied. 
C) a decrease in the demand for GPS systems. 
D) an increase in the supply of GPS systems. A

Question 4

Tom Searchinger, a senior attorney at the Environmental Defense Fund, observed that generous U.S.farm subsidies have encouraged farmers to produce more corn and more wheat.How does this affect the market for fertilizer?

Accepted Answer

A) The supply of fertilizer increases. 
B) The supply of fertilizer decreases 
C) The demand for fertilizer increases. 
D) The demand for fertilizer decreases. 
A) The supply of fertilizer increases. 
B) The supply of fertilizer decreases 
C) The demand for fertilizer increases. 
D) The demand for fertilizer decreases.

Question 5

If in the market for blueberries, the supply curve has shifted to the left

Accepted Answer

A) the supply of peaches has increased. 
B) the supply of peaches has decreased. 
C) the quantity of peaches supplied has increased. 
D) the quantity of peaches supplied has decreased. 
A) the supply of peaches has increased. 
B) the supply of peaches has decreased. 
C) the quantity of peaches supplied has increased. 
D) the quantity of peaches supplied has decreased.

Question 6

Figure 3.6
  
-Refer to Figure 3.6.The figure above represents the market for canvas tote bags.Assume that the market price is $35.Which of the following statement is true?

Accepted Answer

A) There is a surplus that will cause the price to decrease; quantity demanded will then increase and quantity supplied will decrease until the price equals $25. 
B) There is a surplus that will cause the price to decrease; quantity supplied will then increase and quantity demanded will decrease until the price equals $25. 
C) There will be a surplus that will cause the price to decrease; demand will then increase and supply will decrease until the price equals $25. 
D) There is a surplus that will cause the price to increase; quantity demanded will then decrease and quantity supplied will increase until the price equals $25. 
A) There is a surplus that will cause the price to decrease; quantity demanded will then increase and quantity supplied will decrease until the price equals $25. 
B) There is a surplus that will cause the price to decrease; quantity supplied will then increase and quantity demanded will decrease until the price equals $25. 
C) There will be a surplus that will cause the price to decrease; demand will then increase and supply will decrease until the price equals $25. 
D) There is a surplus that will cause the price to increase; quantity demanded will then decrease and quantity supplied will increase until the price equals $25.

Question 7

The following equations represent the demand and supply for silver pendants.
QD = 50 - 2P
QS = -10 + 2P
What is the equilibrium price (P)and quantity (Q - in thousands)of pendants?

Accepted Answer

A) P = $15; Q = 20 thousand 
B) P = $50; Q = 10 thousand 
C) P = $20; Q = 15 thousand 
D) P = $10; Q = 30 thousand 
A) P = $15; Q = 20 thousand 
B) P = $50; Q = 10 thousand 
C) P = $20; Q = 15 thousand 
D) P = $10; Q = 30 thousand

Question 8

Suppose that when the price of hamburgers decreases, the Li family increases their purchases of ketchup.To the Li family

Accepted Answer

A) hamburgers and ketchup are complements. 
B) hamburgers and ketchup and substitutes. 
C) hamburgers and ketchup are normal goods. 
D) hamburgers are normal goods and hot dogs are inferior goods. 
A) hamburgers and ketchup are complements. 
B) hamburgers and ketchup and substitutes. 
C) hamburgers and ketchup are normal goods. 
D) hamburgers are normal goods and hot dogs are inferior goods.

Question 9

Figure 3.1
  
-Refer to Figure 3.1.A decrease in the price of the product would be represented by a movement from

Accepted Answer

A) A to B. 
B) B to A. 
C) D₁ to D₂. 
D) D₂ to D₁. 
A) A to B. 
B) B to A. 
C) D₁ to D₂. 
D) D₂ to D₁.

Question 10

If an increase in income leads to in an increase in the demand for peanut butter, then peanut butter is

Accepted Answer

A) a neutral good. 
B) a normal good. 
C) a necessity. 
D) a complement. 
A) a neutral good. 
B) a normal good. 
C) a necessity. 
D) a complement.

Question 11

The Internet has created a new category in the book selling market, namely, the "barely used" book.How does the availability of barely used books affect the market for new books?

Accepted Answer

A) The demand curve for new books shifts to the right. 
B) The demand curve for new books shifts to the left. 
C) The supply curve for new books shifts to the right. 
D) The supply curve for new books shifts to the left. 
A) The demand curve for new books shifts to the right. 
B) The demand curve for new books shifts to the left. 
C) The supply curve for new books shifts to the right. 
D) The supply curve for new books shifts to the left.

Question 12

If a demand curve shifts to the right, then

Accepted Answer

A) demand has increased. 
B) quantity demanded has increased. 
C) demand has decreased. 
D) quantity demanded has decreased. 
A) demand has increased. 
B) quantity demanded has increased. 
C) demand has decreased. 
D) quantity demanded has decreased.

Question 13

Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall.Holding everything else constant, how would this affect the market for Blu-ray players (a complement to LCD televisions)?

Accepted Answer

A) The supply of blu-ray players would increase and the equilibrium price of blu-ray players would decrease. 
B) The demand for blu-ray players would increase and the equilibrium price of blu-ray players would increase. 
C) The demand for blu-ray players would decrease because consumers could afford to buy fewer LCD televisions and blu-ray players. 
D) The demand for blu-ray players would increase and the equilibrium price of blu-ray players would decrease. 
A) The supply of blu-ray players would increase and the equilibrium price of blu-ray players would decrease. 
B) The demand for blu-ray players would increase and the equilibrium price of blu-ray players would increase. 
C) The demand for blu-ray players would decrease because consumers could afford to buy fewer LCD televisions and blu-ray players. 
D) The demand for blu-ray players would increase and the equilibrium price of blu-ray players would decrease.

Question 14

Table 3.3
 $\begin{array}{|l|c|}
\hline \text { Demand } & \text { Supply } \
\hline P=80-Q D & P=50+1 / 2 Q S \
\hline Q D=80-P & Q S=2 P-100\
\hline
\end{array}$
-Refer to Table 3.3.The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick.The equilibrium price and quantity for Chef Ernie's sushi are $60 and 20 thousand units.What is the value of economic surplus in this market?

Accepted Answer

A) $300 thousand 
B) $600 thousand 
C) $1,200 thousand 
D) $1,600 thousand 
A) $300 thousand 
B) $600 thousand 
C) $1,200 thousand 
D) $1,600 thousand

Question 15

What is the difference between an "increase in supply" and an "increase in quantity supplied"?

Accepted Answer

A) There is no difference between the two terms; they both refer to a shift of the supply curve. 
B) There is no difference between the two terms; they both refer to a movement along a given supply curve. 
C) An "increase in supply" means the supply curve has shifted to the right while an "increase in quantity supplied" means at any given price supply has increased. 
D) An "increase in supply" means the supply curve has shifted to the right while an "increase in quantity supplied" refers to a movement along a given supply curve in response to an increase in price. 
A) There is no difference between the two terms; they both refer to a shift of the supply curve. 
B) There is no difference between the two terms; they both refer to a movement along a given supply curve. 
C) An "increase in supply" means the supply curve has shifted to the right while an "increase in quantity supplied" means at any given price supply has increased. 
D) An "increase in supply" means the supply curve has shifted to the right while an "increase in quantity supplied" refers to a movement along a given supply curve in response to an increase in price.

Question 16

Holding everything else constant, an increase in the price of MP3 players will result in

Accepted Answer

A) a decrease in the quantity of MP3 players supplied. 
B) a decrease in the demand for MP3 players. 
C) an increase in the supply of MP3 players. 
D) a decrease in the quantity of MP3 players demanded. 
A) a decrease in the quantity of MP3 players supplied. 
B) a decrease in the demand for MP3 players. 
C) an increase in the supply of MP3 players. 
D) a decrease in the quantity of MP3 players demanded.

Question 17

The demand for lobster is higher at Christmas than in February.If the equilibrium price of lobster is lower at Christmas than in February then

Accepted Answer

A) the supply of lobster is lower in February than at Christmas. 
B) consumers' tastes for lobster are greater in February than at Christmas. 
C) there is a surplus of lobster at Christmas and a shortage of lobster in February. 
D) there are more substitutes for lobster at Christmas than there are in February. 
A) the supply of lobster is lower in February than at Christmas. 
B) consumers' tastes for lobster are greater in February than at Christmas. 
C) there is a surplus of lobster at Christmas and a shortage of lobster in February. 
D) there are more substitutes for lobster at Christmas than there are in February.

Question 18

In January, buyers of gold expect that the price of gold will rise in February.What happens in the gold market in January, holding all else constant?

Accepted Answer

A) The supply curve shifts to the right. 
B) The demand curve shifts to the left. 
C) The demand curve shifts to the right. 
D) The quantity demanded increases. 
A) The supply curve shifts to the right. 
B) The demand curve shifts to the left. 
C) The demand curve shifts to the right. 
D) The quantity demanded increases.

Question 19

Quantity supplied refers to the amount of a good or service that a firm is willing and able to supply at a given price.

Accepted Answer

A) True 
 B)False

Question 20

If the demand curve for a product shifts to the left and the supply curve for the product shifts to the left, the equilibrium quantity will decrease.

Accepted Answer

A) True 
 B)False

One would speak of a change in the quantity of a good supplied, rather than a change in supply, if

A decrease in the price of GPS systems will result in

Tom Searchinger, a senior attorney at the Environmental Defense Fund, observed that generous U.S.farm subsidies have encouraged farmers to produce more corn and more wheat.How does this affect the market for fertilizer?

If in the market for blueberries, the supply curve has shifted to the left

Figure 3.6 -Refer to Figure 3.6.The figure above represents the market for canvas tote bags.Assume that the market price is $35.Which of the following statement is true?

The following equations represent the demand and supply for silver pendants. QD = 50 - 2P QS = -10 + 2P What is the equilibrium price (P)and quantity (Q - in thousands)of pendants?

Suppose that when the price of hamburgers decreases, the Li family increases their purchases of ketchup.To the Li family

Figure 3.1 -Refer to Figure 3.1.A decrease in the price of the product would be represented by a movement from

If an increase in income leads to in an increase in the demand for peanut butter, then peanut butter is

The Internet has created a new category in the book selling market, namely, the "barely used" book.How does the availability of barely used books affect the market for new books?

If a demand curve shifts to the right, then

Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall.Holding everything else constant, how would this affect the market for Blu-ray players (a complement to LCD televisions)?

What is the difference between an "increase in supply" and an "increase in quantity supplied"?

Holding everything else constant, an increase in the price of MP3 players will result in

The demand for lobster is higher at Christmas than in February.If the equilibrium price of lobster is lower at Christmas than in February then

In January, buyers of gold expect that the price of gold will rise in February.What happens in the gold market in January, holding all else constant?

Quantity supplied refers to the amount of a good or service that a firm is willing and able to supply at a given price.

If the demand curve for a product shifts to the left and the supply curve for the product shifts to the left, the equilibrium quantity will decrease.

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

The Markets for Labour and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Pricing Strategy

Firms, the Stock Market, and Corporate Governance

Filters

Exam 3: Where Prices Come From: the Interaction of Demand and Supply

One would speak of a change in the quantity of a good supplied, rather than a change in supply, if

A decrease in the price of GPS systems will result in

Tom Searchinger, a senior attorney at the Environmental Defense Fund, observed that generous U.S.farm subsidies have encouraged farmers to produce more corn and more wheat.How does this affect the market for fertilizer?

If in the market for blueberries, the supply curve has shifted to the left

Figure 3.6 -Refer to Figure 3.6.The figure above represents the market for canvas tote bags.Assume that the market price is $35.Which of the following statement is true?

The following equations represent the demand and supply for silver pendants. QD = 50 - 2P QS = -10 + 2P What is the equilibrium price (P)and quantity (Q - in thousands)of pendants?

Suppose that when the price of hamburgers decreases, the Li family increases their purchases of ketchup.To the Li family

Figure 3.1 -Refer to Figure 3.1.A decrease in the price of the product would be represented by a movement from

If an increase in income leads to in an increase in the demand for peanut butter, then peanut butter is

The Internet has created a new category in the book selling market, namely, the "barely used" book.How does the availability of barely used books affect the market for new books?

If a demand curve shifts to the right, then

Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall.Holding everything else constant, how would this affect the market for Blu-ray players (a complement to LCD televisions)?

What is the difference between an "increase in supply" and an "increase in quantity supplied"?

Holding everything else constant, an increase in the price of MP3 players will result in

The demand for lobster is higher at Christmas than in February.If the equilibrium price of lobster is lower at Christmas than in February then

In January, buyers of gold expect that the price of gold will rise in February.What happens in the gold market in January, holding all else constant?

Quantity supplied refers to the amount of a good or service that a firm is willing and able to supply at a given price.

If the demand curve for a product shifts to the left and the supply curve for the product shifts to the left, the equilibrium quantity will decrease.

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

The Markets for Labour and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Pricing Strategy

Firms, the Stock Market, and Corporate Governance

Filters