Question 1

The price of a good will rise if

Accepted Answer

A) demand for the good decreases. 
B) supply of the good decreases. 
C) there is a surplus of the good. 
D) the price of a substitute for the good decreases. 
E) the good is an inferior good and income increases. 
A) demand for the good decreases. 
B) supply of the good decreases. 
C) there is a surplus of the good. 
D) the price of a substitute for the good decreases. 
E) the good is an inferior good and income increases.

Question 2

The law of supply tells us that other things remaining the same, as the

Accepted Answer

A) price of gasoline falls, the quantity of gasoline supplied decreases. 
B) price of gasoline rises, the quantity of gasoline supplied decreases. 
C) supply of gasoline increases, the price of gasoline falls. 
D) cost of producing gasoline falls, the supply of gasoline will increase. 
E) cost of producing gasoline increases, the price of gasoline rises. 
A) price of gasoline falls, the quantity of gasoline supplied decreases. 
B) price of gasoline rises, the quantity of gasoline supplied decreases. 
C) supply of gasoline increases, the price of gasoline falls. 
D) cost of producing gasoline falls, the supply of gasoline will increase. 
E) cost of producing gasoline increases, the price of gasoline rises.

Question 3

Table 3.5.2
Demand and Supply Schedules for Cups of Coffee each day at CoolU
   
Use the figure below to answer the following questions.
-Refer to Table 3.5.2. Professor Hyper publishes a new study, showing that coffee raises the test performance of students. Students double their demand for coffee. This change would be represented as a

Accepted Answer

A) leftward shift of the demand curve. 
B) rightward shift of the demand curve. 
C) leftward shift of the supply curve. 
D) rightward shift of the supply curve. 
E) movement up along the demand curve. 
A) leftward shift of the demand curve. 
B) rightward shift of the demand curve. 
C) leftward shift of the supply curve. 
D) rightward shift of the supply curve. 
E) movement up along the demand curve.

Question 4

How many sides does a market have?

Accepted Answer

A) one side - buyers 
B) one side - sellers 
C) two sides - buyers and sellers 
D) three sides - buyers, sellers, and the government 
E) two sides - domestic and foreign 
A) one side - buyers 
B) one side - sellers 
C) two sides - buyers and sellers 
D) three sides - buyers, sellers, and the government 
E) two sides - domestic and foreign

Question 5

Figure 3.5.2
Original equilibrium at 1.
Use the figure below to answer the following questions.
  
-Refer to Figure 3.5.2, which represents the market for beans. If the price of peas, a substitute for beans in production, rises, what is the new beans equilibrium, ceteris paribus?

Accepted Answer

A) 8 
B) 3 
C) 9 
D) 5 
E) 6 
A) 8 
B) 3 
C) 9 
D) 5 
E) 6

Question 6

If both demand and supply increase, then the equilibrium price

Accepted Answer

A) and equilibrium quantity increases. 
B) falls but the equilibrium quantity increases. 
C) could either rise or fall, but the equilibrium quantity increases. 
D) rises, and the equilibrium quantity could either increase or decrease. 
E) falls, and the equilibrium quantity could either increase or decrease. 
A) and equilibrium quantity increases. 
B) falls but the equilibrium quantity increases. 
C) could either rise or fall, but the equilibrium quantity increases. 
D) rises, and the equilibrium quantity could either increase or decrease. 
E) falls, and the equilibrium quantity could either increase or decrease.

Question 7

Which one of the following events shifts the demand curve for grape jelly to the right?

Accepted Answer

A) an increase in income if grape jelly is a normal good 
B) a decrease in the price of strawberry preserves, a substitute for grape jelly 
C) a decrease in the price of grape jelly 
D) an increase in the price of peanut butter, a complement of grape jelly 
E) a decrease in the population 
A) an increase in income if grape jelly is a normal good 
B) a decrease in the price of strawberry preserves, a substitute for grape jelly 
C) a decrease in the price of grape jelly 
D) an increase in the price of peanut butter, a complement of grape jelly 
E) a decrease in the population

Question 8

Which of the following "other things" are not held constant along a demand curve?

Accepted Answer

A) income 
B) prices of related goods 
C) the price of the good itself 
D) preferences 
E) expected future income and credit 
A) income 
B) prices of related goods 
C) the price of the good itself 
D) preferences 
E) expected future income and credit

Question 9

Which market is an example of a market for factors of production?

Accepted Answer

A) furniture market 
B) apple market 
C) automobile market 
D) haircut market 
E) labour market 
A) furniture market 
B) apple market 
C) automobile market 
D) haircut market 
E) labour market

Question 10

Crude oil is a very important factor of production used in the production of gasoline. If the price of crude oil rises, we would expect the

Accepted Answer

A) price of gasoline to rise due to an increase in demand. 
B) price of gasoline to fall due to an increase in demand. 
C) price of gasoline to rise due to a decrease in supply. 
D) equilibrium quantity of gasoline to fall due to an increase in supply. 
E) equilibrium quantity of gasoline to rise due to an increase in demand. 
A) price of gasoline to rise due to an increase in demand. 
B) price of gasoline to fall due to an increase in demand. 
C) price of gasoline to rise due to a decrease in supply. 
D) equilibrium quantity of gasoline to fall due to an increase in supply. 
E) equilibrium quantity of gasoline to rise due to an increase in demand.

Question 11

All shredded wheat producers have decided to add a new ingredient, the "crunch enhancer" to shredded wheat. Crunch enhancer keeps cereals crisper longer in milk and, as a result, consumers decide they like shredded wheat more than before. What happens to the supply and demand curves for shredded wheat now that it costs more to produce and consumers like it better?

Accepted Answer

A) The supply and demand curves both shift rightward. 
B) The supply curve shifts rightward and the demand curve remains unchanged. 
C) The supply curve shifts leftward and the demand curve shifts rightward. 
D) The supply curve shifts leftward and the demand curve remains unchanged. 
E) Neither curve changes but a movement occurs up along the demand curve and a movement occurs up along the supply curve. 
A) The supply and demand curves both shift rightward. 
B) The supply curve shifts rightward and the demand curve remains unchanged. 
C) The supply curve shifts leftward and the demand curve shifts rightward. 
D) The supply curve shifts leftward and the demand curve remains unchanged. 
E) Neither curve changes but a movement occurs up along the demand curve and a movement occurs up along the supply curve.

Question 12

Figure 3.4.2
Use the figure below to answer the following questions.
  
-The equilibrium price in the market illustrated by Figure 3.4.2 is

Accepted Answer

A) $2 a unit. 
B) $4 a unit. 
C) $6 a unit. 
D) $8 a unit. 
E) $10 a unit. 
A) $2 a unit. 
B) $4 a unit. 
C) $6 a unit. 
D) $8 a unit. 
E) $10 a unit.

Question 13

When the supply of good A decreases,

Accepted Answer

A) the equilibrium price and the equilibrium quantity will increase. 
B) the equilibrium price will increase, but the equilibrium quantity will decrease. 
C) the equilibrium price and the equilibrium quantity will decrease. 
D) the equilibrium price will decrease, but the equilibrium quantity will increase. 
E) a surplus will result. 
A) the equilibrium price and the equilibrium quantity will increase. 
B) the equilibrium price will increase, but the equilibrium quantity will decrease. 
C) the equilibrium price and the equilibrium quantity will decrease. 
D) the equilibrium price will decrease, but the equilibrium quantity will increase. 
E) a surplus will result.

Question 14

The cost of producing aspirin increases at the same time as doctors discover that taking one aspirin per day reduces the risk of heart attacks. As a result, the

Accepted Answer

A) supply of aspirin decreases and the demand for aspirin increases. 
B) supply of aspirin decreases by more than the demand for aspirin increases. 
C) supply of aspirin increases and the demand for aspirin decreases. 
D) equilibrium quantity of aspirin increases and the equilibrium price of aspirin rises. 
E) equilibrium quantity of aspirin decreases and the equilibrium price of aspirin rises. 
A) supply of aspirin decreases and the demand for aspirin increases. 
B) supply of aspirin decreases by more than the demand for aspirin increases. 
C) supply of aspirin increases and the demand for aspirin decreases. 
D) equilibrium quantity of aspirin increases and the equilibrium price of aspirin rises. 
E) equilibrium quantity of aspirin decreases and the equilibrium price of aspirin rises.

Question 15

Suppose income increases. Choose the correct statement.

Accepted Answer

A) The equilibrium price of turnips falls if a turnip is an inferior good. 
B) The equilibrium price of turnips rises if a turnip is an inferior good. 
C) The equilibrium quantity of turnips decreases if a turnip is an inferior good. 
D) The supply of turnips decreases whether or not a turnip is an inferior good. 
E) Both A and C 
A) The equilibrium price of turnips falls if a turnip is an inferior good. 
B) The equilibrium price of turnips rises if a turnip is an inferior good. 
C) The equilibrium quantity of turnips decreases if a turnip is an inferior good. 
D) The supply of turnips decreases whether or not a turnip is an inferior good. 
E) Both A and C

Question 16

Table 3.1.1
  
-Refer to Table 3.1.1. In 2012, the relative price of coffee in terms of tea is

Accepted Answer

A) 1.25. 
B) 1.10. 
C) 1.00. 
D) 0.88. 
E) 1.14. 
A) 1.25. 
B) 1.10. 
C) 1.00. 
D) 0.88. 
E) 1.14.

Question 17

The price of a good will fall if

Accepted Answer

A) there is a shortage of the good. 
B) demand for the good increases. 
C) there is a surplus of the good. 
D) the supply of the good decreases. 
E) demand for the good does not change. 
A) there is a shortage of the good. 
B) demand for the good increases. 
C) there is a surplus of the good. 
D) the supply of the good decreases. 
E) demand for the good does not change.

Question 18

The demand curve is P = 800 - 25QD. The supply curve is P = 500 + 25QS. At market equilibrium, the equilibrium quantity is ________ and the equilibrium price is ________.

Accepted Answer

A) 25; 0.17 
B) 650; 6.0 
C) 0.17; 25 
D) 6.0; 650 
E) 1,300; zero 
A) 25; 0.17 
B) 650; 6.0 
C) 0.17; 25 
D) 6.0; 650 
E) 1,300; zero

Question 19

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 demand for popcorn 
E) 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 demand for popcorn 
E) a decrease in the number of popcorn producers

Question 20

Which one of the following would not shift the supply curve of good X to the right?

Accepted Answer

A) a fall in the price of the factors of production used in producing X 
B) an improvement in technology used in the production of X 
C) a rise in the price of X 
D) an increase in the price of Y, a complement in production of X 
E) a fall in the price of Y, a substitute in production of X 
A) a fall in the price of the factors of production used in producing X 
B) an improvement in technology used in the production of X 
C) a rise in the price of X 
D) an increase in the price of Y, a complement in production of X 
E) a fall in the price of Y, a substitute in production of X

The price of a good will rise if

The law of supply tells us that other things remaining the same, as the

How many sides does a market have?

Figure 3.5.2 Original equilibrium at 1. Use the figure below to answer the following questions. -Refer to Figure 3.5.2, which represents the market for beans. If the price of peas, a substitute for beans in production, rises, what is the new beans equilibrium, ceteris paribus?

If both demand and supply increase, then the equilibrium price

Which one of the following events shifts the demand curve for grape jelly to the right?

Which of the following "other things" are not held constant along a demand curve?

Which market is an example of a market for factors of production?

Crude oil is a very important factor of production used in the production of gasoline. If the price of crude oil rises, we would expect the

Figure 3.4.2 Use the figure below to answer the following questions. -The equilibrium price in the market illustrated by Figure 3.4.2 is

When the supply of good A decreases,

The cost of producing aspirin increases at the same time as doctors discover that taking one aspirin per day reduces the risk of heart attacks. As a result, the

Suppose income increases. Choose the correct statement.

Table 3.1.1 -Refer to Table 3.1.1. In 2012, the relative price of coffee in terms of tea is

The price of a good will fall if

The demand curve is P = 800 - 25QD. The supply curve is P = 500 + 25QS. At market equilibrium, the equilibrium quantity is and the equilibrium price is .

Which of the following decreases the supply of popcorn?

Which one of the following would not shift the supply curve of good X to the right?

What Is Economics

The Economic Problem

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 3: Demand and Supply

The price of a good will rise if

The law of supply tells us that other things remaining the same, as the

How many sides does a market have?

Figure 3.5.2 Original equilibrium at 1. Use the figure below to answer the following questions. -Refer to Figure 3.5.2, which represents the market for beans. If the price of peas, a substitute for beans in production, rises, what is the new beans equilibrium, ceteris paribus?

If both demand and supply increase, then the equilibrium price

Which one of the following events shifts the demand curve for grape jelly to the right?

Which of the following "other things" are not held constant along a demand curve?

Which market is an example of a market for factors of production?

Crude oil is a very important factor of production used in the production of gasoline. If the price of crude oil rises, we would expect the

Figure 3.4.2 Use the figure below to answer the following questions. -The equilibrium price in the market illustrated by Figure 3.4.2 is

When the supply of good A decreases,

The cost of producing aspirin increases at the same time as doctors discover that taking one aspirin per day reduces the risk of heart attacks. As a result, the

Suppose income increases. Choose the correct statement.

Table 3.1.1 -Refer to Table 3.1.1. In 2012, the relative price of coffee in terms of tea is

The price of a good will fall if

The demand curve is P = 800 - 25QD. The supply curve is P = 500 + 25QS. At market equilibrium, the equilibrium quantity is ________ and the equilibrium price is ________.

Which of the following decreases the supply of popcorn?

Which one of the following would not shift the supply curve of good X to the right?

What Is Economics

The Economic Problem

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

The demand curve is P = 800 - 25QD. The supply curve is P = 500 + 25QS. At market equilibrium, the equilibrium quantity is and the equilibrium price is .