Question 1

If the price of pork rinds falls,the substitution effect due to the price change will cause

Accepted Answer

A) an increase in the demand for pork rinds. 
B) an increase in the demand for corn chips, a substitute for pork rinds. 
C) an increase in the quantity of pork rinds demanded. 
D) a decrease in the quantity of pork rinds demanded. 
A) an increase in the demand for pork rinds. 
B) an increase in the demand for corn chips, a substitute for pork rinds. 
C) an increase in the quantity of pork rinds demanded. 
D) a decrease in the quantity of pork rinds demanded.

Question 2

A decrease in the demand for eggs due to changes in consumer tastes,accompanied by a decrease in the supply of eggs as a result of an outbreak of Avian flu,will result in

Accepted Answer

A) a decrease in the equilibrium quantity of eggs and no change in the equilibrium price. 
B) a decrease in the equilibrium price of eggs and no change in the equilibrium quantity. 
C) a decrease in the equilibrium price of eggs; the equilibrium quantity may increase or decrease. 
D) a decrease in the equilibrium quantity of eggs; the equilibrium price may increase or decrease. 
A) a decrease in the equilibrium quantity of eggs and no change in the equilibrium price. 
B) a decrease in the equilibrium price of eggs and no change in the equilibrium quantity. 
C) a decrease in the equilibrium price of eggs; the equilibrium quantity may increase or decrease. 
D) a decrease in the equilibrium quantity of eggs; the equilibrium price may increase or decrease.

Question 3

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 4

By drawing a demand curve with price on the vertical axis and quantity on the horizontal axis,economists assume that the most important determinant of the demand for a good is

Accepted Answer

A) consumer income. 
B) consumer tastes and preferences. 
C) the price of the good. 
D) the quality of the good. 
A) consumer income. 
B) consumer tastes and preferences. 
C) the price of the good. 
D) the quality of the good.

Question 5

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 6

Which of the following would shift the supply curve for smartphones to the right?

Accepted Answer

A) an increase in the price of a substitute in production 
B) an increase in consumer income (assuming that all smartphones are normal goods) 
C) a decrease in the number of firms that produce smartphones 
D) a decrease in the price of an input used to produce smartphones 
A) an increase in the price of a substitute in production 
B) an increase in consumer income (assuming that all smartphones are normal goods) 
C) a decrease in the number of firms that produce smartphones 
D) a decrease in the price of an input used to produce smartphones

Question 7

A surplus occurs when the actual selling price is above the market equilibrium price.

Accepted Answer

A) True 
 B)False

Question 8

Assume there is a shortage in the market for digital music players.Which of the following statements correctly describes this situation?

Accepted Answer

A) The demand for digital music players is greater than the supply of digital music players. 
B) Some consumers will be unable to obtain digital music players at the market price and will have an incentive to offer to buy the product at a higher price. 
C) The price of digital music players will rise in response to the shortage; as the price rises the quantity demanded will increase and the quantity supplied will decrease. 
D) the shortage will cause an increase in the equilibrium price of digital music players. 
A) The demand for digital music players is greater than the supply of digital music players. 
B) Some consumers will be unable to obtain digital music players at the market price and will have an incentive to offer to buy the product at a higher price. 
C) The price of digital music players will rise in response to the shortage; as the price rises the quantity demanded will increase and the quantity supplied will decrease. 
D) the shortage will cause an increase in the equilibrium price of digital music players.

Question 9

Figure 3-2
  
-Refer to Figure 3-2.An increase in price of inputs would be represented by a movement from

Accepted Answer

A) A to B. 
B) B to A. 
C) S₁ to S₂. 
D) S₂ to S₁. 
A) A to B. 
B) B to A. 
C) S₁ to S₂. 
D) S₂ to S₁.

Question 10

Studies have shown that smoking cigarettes can cause heart disease.Assume this is true,and favorable weather has increased the tobacco harvest in North Carolina.In the market for cigarettes,these two developments would

Accepted Answer

A) decrease demand and decrease supply, resulting in an increase in the equilibrium quantity and a decrease in the equilibrium price of cigarettes. 
B) increase demand and increase supply resulting in an increase in the equilibrium quantity and an uncertain effect on the equilibrium price of cigarettes. 
C) decrease demand and increase supply, resulting in a decrease in the equilibrium price and an uncertain effect on the equilibrium quantity of cigarettes. 
D) decrease demand and increase supply, resulting in an increase in both the equilibrium price and the equilibrium quantity of cigarettes. 
A) decrease demand and decrease supply, resulting in an increase in the equilibrium quantity and a decrease in the equilibrium price of cigarettes. 
B) increase demand and increase supply resulting in an increase in the equilibrium quantity and an uncertain effect on the equilibrium price of cigarettes. 
C) decrease demand and increase supply, resulting in a decrease in the equilibrium price and an uncertain effect on the equilibrium quantity of cigarettes. 
D) decrease demand and increase supply, resulting in an increase in both the equilibrium price and the equilibrium quantity of cigarettes.

Question 11

If the demand curve for a product shifts to the right and the supply curve for the product shifts to the left,equilibrium price and equilibrium quantity will both increase.

Accepted Answer

A) True 
 B)False

Question 12

In response to a surplus the market price of a good will fall; as the price falls,the quantity demanded will increase and quantity supplies will decrease until equilibrium is reached.

Accepted Answer

A) True 
 B)False

Question 13

Table 3-2
 $$\begin{array} { | c | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Caviar } \
\text { Price per oz. } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Ari's } \
\text { Quantity } \
\text { Demanded } \
\text { (oz.) }
\end{array} & \begin{array} { c } 
\text { Sonia's } \
\text { Quantity } \
\text { Demanded } \
\text { (oz.) }
\end{array} & \begin{array} { c } 
\text { Rest of } \
\text { Market } \
\text { Quantity } \
\text { Demanded } \
\text { (oz.) }
\end{array} & \begin{array} { c } 
\text { Market } \
\text { Quantity } \
\text { Demanded } \
\text { (oz.) }
\end{array} \
\hline \$ 75 & 6 & 0 & 46 & \
\hline 65 & 18 & 6 & 64 & \
\hline 55 & 28 & 14 & 136 & \
\hline 45 & 36 & 24 & 170 & \
\hline 35 & 44 & 36 & 220 & \
\hline
\end{array}$$
-Refer to Table 3-2.The table above shows the demand schedules for caviar of two individuals (Ari and Sonia)and the rest of the market.At a price of $75,the quantity demanded in the market would be

Accepted Answer

A) 6 oz. 
B) 46 oz. 
C) 52 oz. 
D) 127 oz. 
A) 6 oz. 
B) 46 oz. 
C) 52 oz. 
D) 127 oz.

Question 14

Figure 3-3
  
-Refer to Figure 3-3.The figure above shows the supply and demand curves for two markets: the market for original Picasso paintings and the market for designer jeans.Which graph most likely represents which market?

Accepted Answer

A) Graph B represents the market for original Picasso paintings and Graph A represents the market for designer jeans. 
B) Graph A represents the market for original Picasso paintings and Graph B represents the market for designer jeans. 
C) Graph A represents both the market for original Picasso paintings and designer jeans. 
D) Graph B represents both the market for original Picasso paintings and designer jeans. 
A) Graph B represents the market for original Picasso paintings and Graph A represents the market for designer jeans. 
B) Graph A represents the market for original Picasso paintings and Graph B represents the market for designer jeans. 
C) Graph A represents both the market for original Picasso paintings and designer jeans. 
D) Graph B represents both the market for original Picasso paintings and designer jeans.

Question 15

Figure 3-1
  
-Refer to Figure 3-1.If the product represented is an inferior good,a decrease in income 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 16

If the demand for a product decreases and the supply of the same product decreases,the equilibrium price will decrease.

Accepted Answer

A) True 
 B)False

Question 17

Figure 3-7
  
-Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for rice.What happens in this market if buyers expect the price of rice to fall?

Accepted Answer

A) Panel (a) 
B) Panel (b) 
C) Panel (c) 
D) Panel (d) 
A) Panel (a) 
B) Panel (b) 
C) Panel (c) 
D) Panel (d)

Question 18

Figure 3-8
  
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₁ and S₁ (point A) If there is a surplus of motorcycles how will the equilibrium point change?

Accepted Answer

A) The equilibrium point will move from A to B. 
B) The equilibrium point will move from A to C. 
C) There will be no change in the equilibrium point. 
D) The equilibrium point will move from A to E. 
A) The equilibrium point will move from A to B. 
B) The equilibrium point will move from A to C. 
C) There will be no change in the equilibrium point. 
D) The equilibrium point will move from A to E.

Question 19

From a supply perspective,what impact would an increase in the price of motorcycles have on the market for motorcycles?

Accepted Answer

An increase in the price of mo

Question 20

A change in which variable will change the market demand for a product?

Accepted Answer

A) the price of the product 
B) population 
C) technology 
D) the prices of substitutes in production 
A) the price of the product 
B) population 
C) technology 
D) the prices of substitutes in production

If the price of pork rinds falls,the substitution effect due to the price change will cause

A decrease in the demand for eggs due to changes in consumer tastes,accompanied by a decrease in the supply of eggs as a result of an outbreak of Avian flu,will result in

If a demand curve shifts to the right,then

By drawing a demand curve with price on the vertical axis and quantity on the horizontal axis,economists assume that the most important determinant of the demand for a good is

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

Which of the following would shift the supply curve for smartphones to the right?

A surplus occurs when the actual selling price is above the market equilibrium price.

Assume there is a shortage in the market for digital music players.Which of the following statements correctly describes this situation?

Figure 3-2 -Refer to Figure 3-2.An increase in price of inputs would be represented by a movement from

Studies have shown that smoking cigarettes can cause heart disease.Assume this is true,and favorable weather has increased the tobacco harvest in North Carolina.In the market for cigarettes,these two developments would

If the demand curve for a product shifts to the right and the supply curve for the product shifts to the left,equilibrium price and equilibrium quantity will both increase.

In response to a surplus the market price of a good will fall; as the price falls,the quantity demanded will increase and quantity supplies will decrease until equilibrium is reached.

Figure 3-3 -Refer to Figure 3-3.The figure above shows the supply and demand curves for two markets: the market for original Picasso paintings and the market for designer jeans.Which graph most likely represents which market?

Figure 3-1 -Refer to Figure 3-1.If the product represented is an inferior good,a decrease in income would be represented by a movement from

If the demand for a product decreases and the supply of the same product decreases,the equilibrium price will decrease.

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for rice.What happens in this market if buyers expect the price of rice to fall?

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₁ and S₁ (point A) If there is a surplus of motorcycles how will the equilibrium point change?

From a supply perspective,what impact would an increase in the price of motorcycles have on the market for motorcycles?

A change in which variable will change the market demand for a product?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

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

If the price of pork rinds falls,the substitution effect due to the price change will cause

A decrease in the demand for eggs due to changes in consumer tastes,accompanied by a decrease in the supply of eggs as a result of an outbreak of Avian flu,will result in

If a demand curve shifts to the right,then

By drawing a demand curve with price on the vertical axis and quantity on the horizontal axis,economists assume that the most important determinant of the demand for a good is

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

Which of the following would shift the supply curve for smartphones to the right?

A surplus occurs when the actual selling price is above the market equilibrium price.

Assume there is a shortage in the market for digital music players.Which of the following statements correctly describes this situation?

Figure 3-2 -Refer to Figure 3-2.An increase in price of inputs would be represented by a movement from

Studies have shown that smoking cigarettes can cause heart disease.Assume this is true,and favorable weather has increased the tobacco harvest in North Carolina.In the market for cigarettes,these two developments would

If the demand curve for a product shifts to the right and the supply curve for the product shifts to the left,equilibrium price and equilibrium quantity will both increase.

In response to a surplus the market price of a good will fall; as the price falls,the quantity demanded will increase and quantity supplies will decrease until equilibrium is reached.

Figure 3-3 -Refer to Figure 3-3.The figure above shows the supply and demand curves for two markets: the market for original Picasso paintings and the market for designer jeans.Which graph most likely represents which market?

Figure 3-1 -Refer to Figure 3-1.If the product represented is an inferior good,a decrease in income would be represented by a movement from

If the demand for a product decreases and the supply of the same product decreases,the equilibrium price will decrease.

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for rice.What happens in this market if buyers expect the price of rice to fall?

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₁ and S₁ (point A) If there is a surplus of motorcycles how will the equilibrium point change?

From a supply perspective,what impact would an increase in the price of motorcycles have on the market for motorcycles?

A change in which variable will change the market demand for a product?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters