Question 1

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 2

A shortage will exist if

Accepted Answer

A) the price is above the equilibrium price. 
B) the price is below the equilibrium price. 
C) there are not enough producers. 
D) there are not enough consumers. 
E) demand decreases. 
A) the price is above the equilibrium price. 
B) the price is below the equilibrium price. 
C) there are not enough producers. 
D) there are not enough consumers. 
E) demand decreases.

Question 3

The substitution effect influences food purchases because when the price of a certain food rises, other things remaining the same, ________.Consumers ________.

Accepted Answer

A) the relative price of all food rises; purchase less of the food that has experienced the price increase and more of all other foods 
B) its relative price does not change because most likely the prices of all other foods will also rise; continue to purchase all foods, but in smaller quantities 
C) its relative price rises; purchase more of a different food that is less expensive 
D) the relative price of all food rises; continue to purchase all foods, but in smaller quantities 
E) its relative price rises; purchase less of all foods 
A) the relative price of all food rises; purchase less of the food that has experienced the price increase and more of all other foods 
B) its relative price does not change because most likely the prices of all other foods will also rise; continue to purchase all foods, but in smaller quantities 
C) its relative price rises; purchase more of a different food that is less expensive 
D) the relative price of all food rises; continue to purchase all foods, but in smaller quantities 
E) its relative price rises; purchase less of all foods

Question 4

Some sales managers are talking shop.Which of the following quotations refers to a movement along the demand curve?

Accepted Answer

A) "Since our competitors raised their prices, our sales have doubled." 
B) "It has been an unusually mild winter; our sales of wool scarves are down from last year." 
C) "We decided to cut our prices, and the increase in our sales has been remarkable." 
D) "The Green movement has sparked an increase in our sales of biodegradable products." 
E) "More firms are producing biodegradable products." 
A) "Since our competitors raised their prices, our sales have doubled." 
B) "It has been an unusually mild winter; our sales of wool scarves are down from last year." 
C) "We decided to cut our prices, and the increase in our sales has been remarkable." 
D) "The Green movement has sparked an increase in our sales of biodegradable products." 
E) "More firms are producing biodegradable products."

Question 5

If the market for Twinkies is in equilibrium, then

Accepted Answer

A) Twinkies must be a normal good. 
B) producers would like to sell more at the current price. 
C) consumers would like to buy more at the current price. 
D) there is a surplus. 
E) the equilibrium quantity equals the quantity demanded. 
A) Twinkies must be a normal good. 
B) producers would like to sell more at the current price. 
C) consumers would like to buy more at the current price. 
D) there is a surplus. 
E) the equilibrium quantity equals the quantity demanded.

Question 6

If A and B are complements and the cost of a factor of production used in the production of A decreases, then the price of

Accepted Answer

A) both A and B will rise. 
B) both A and B will fall. 
C) A will fall and the price of B will rise. 
D) A will rise and the price of B will fall. 
E) A will fall and the price of B will remain unchanged. 
A) both A and B will rise. 
B) both A and B will fall. 
C) A will fall and the price of B will rise. 
D) A will rise and the price of B will fall. 
E) A will fall and the price of B will remain unchanged.

Question 7

The price of good X falls and the demand for good Y decreases.We can conclude that

Accepted Answer

A) X and Y are complements. 
B) X and Y are independent of each other. 
C) X is an inferior good. 
D) X is a normal good. 
E) X and Y are substitutes. 
A) X and Y are complements. 
B) X and Y are independent of each other. 
C) X is an inferior good. 
D) X is a normal good. 
E) X and Y are substitutes.

Question 8

A market where no single buyer or seller can influence the price is

Accepted Answer

A) a buyer's market. 
B) a seller's market. 
C) a competitive market. 
D) an output market. 
E) an input market. 
A) a buyer's market. 
B) a seller's market. 
C) a competitive market. 
D) an output market. 
E) an input market.

Question 9

When a shortage occurs, there is a tendency for the

Accepted Answer

A) price to fall. 
B) price to remain unchanged. 
C) price to rise. 
D) quantity demanded to increase. 
E) quantity supplied to decrease. 
A) price to fall. 
B) price to remain unchanged. 
C) price to rise. 
D) quantity demanded to increase. 
E) quantity supplied to decrease.

Question 10

The y- axis intercept of the supply curve is 40 and the slope is 6.The equation of the supply curve is

Accepted Answer

A) P = 3 + 40QS. 
B) P = 40 + 6QS. 
C) P = 40 - 6QS. 
D) QS = 40 + 6P. 
E) QS = 40 - 6P. 
A) P = 3 + 40QS. 
B) P = 40 + 6QS. 
C) P = 40 - 6QS. 
D) QS = 40 + 6P. 
E) QS = 40 - 6P.

Question 11

A shortage is the amount by which quantity

Accepted Answer

A) demanded exceeds quantity supplied. 
B) supplied exceeds quantity demanded. 
C) demanded increases when the price rises. 
D) demanded exceeds the equilibrium quantity. 
E) supplied exceeds the equilibrium quantity. 
A) demanded exceeds quantity supplied. 
B) supplied exceeds quantity demanded. 
C) demanded increases when the price rises. 
D) demanded exceeds the equilibrium quantity. 
E) supplied exceeds the equilibrium quantity.

Question 12

Use the figure below to answer the following questions.
   
Figure 3.2.2
-Refer to Figure 3.2.2.If consumers' income increases,

Accepted Answer

A) the quantity of pizzas demanded increases. 
B) the demand curve for pizzas shifts from D₁ to D₂ if a pizza is a normal good. 
C) the supply of pizzas increases. 
D) the quantity of pizzas supplied decreases. 
E) a movement from point A to point B on D₁ occurs. 
A) the quantity of pizzas demanded increases. 
B) the demand curve for pizzas shifts from D₁ to D₂ if a pizza is a normal good. 
C) the supply of pizzas increases. 
D) the quantity of pizzas supplied decreases. 
E) a movement from point A to point B on D₁ occurs.

Question 13

Use the table below to answer the following questions.
Table 3.5.1
The Market for Car-Seat Heaters
  
-Refer to Table 3.5.1.The equilibrium price is $________ and the equilibrium quantity is ________ heaters per month.

Accepted Answer

A) 80; 500 
B) 80; 300 
C) 50; 450 
D) 50; 350 
E) 60; 400 
A) 80; 500 
B) 80; 300 
C) 50; 450 
D) 50; 350 
E) 60; 400

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

Which one of the following correctly describes how price adjustment eliminates a surplus?

Accepted Answer

A) As the price rises, the quantity demanded decreases and the quantity supplied increases. 
B) As the price rises, the quantity demanded increases and the quantity supplied decreases. 
C) As the price falls, the quantity demanded decreases and the quantity supplied increases. 
D) As the price falls, the quantity demanded increases and the quantity supplied decreases. 
E) As the price falls, the demand for substitutes decreases, which eliminates the surplus. 
A) As the price rises, the quantity demanded decreases and the quantity supplied increases. 
B) As the price rises, the quantity demanded increases and the quantity supplied decreases. 
C) As the price falls, the quantity demanded decreases and the quantity supplied increases. 
D) As the price falls, the quantity demanded increases and the quantity supplied decreases. 
E) As the price falls, the demand for substitutes decreases, which eliminates the surplus.

Question 16

Use the information below to answer the following questions.
Fact 3.5.1
The market for coffee is initially in equilibrium. Pepsi is a substitute for coffee; cream is a complement of coffee. Consider the market for coffee. Assume that all ceteris paribus assumptions continue to hold except for the event listed.
-Refer to Fact 3.5.1.The price of cream falls.Simultaneously, there is an increase in the wages of farm workers who harvest coffee beans.The equilibrium quantity of coffee

Accepted Answer

A) increases. 
B) decreases. 
C) remains the same. 
D) increases or decreases depending on the slope of the supply and demand curves. 
E) increases, decreases, or remains the same depending on the relative shifts of the supply and demand curves. 
A) increases. 
B) decreases. 
C) remains the same. 
D) increases or decreases depending on the slope of the supply and demand curves. 
E) increases, decreases, or remains the same depending on the relative shifts of the supply and demand curves.

Question 17

If the number of suppliers of good Y increases, then

Accepted Answer

A) a movement up along the supply curve of good Y will occur. 
B) a movement down along the supply curve of good Y will occur. 
C) the supply curve of good Y shifts rightward. 
D) the supply curve of good Y shifts leftward. 
E) the supply curve of good Y will remain unchanged. 
A) a movement up along the supply curve of good Y will occur. 
B) a movement down along the supply curve of good Y will occur. 
C) the supply curve of good Y shifts rightward. 
D) the supply curve of good Y shifts leftward. 
E) the supply curve of good Y will remain unchanged.

Question 18

Use the figure below to answer the following questions.
   
Figure 3.5.2
Original equilibrium at 1.
-Refer to Figure 3.5.2, which represents the market for beans.If the price of peas, a substitute for beans 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

Which of the following decreases the supply of popcorn?

A shortage will exist if

The substitution effect influences food purchases because when the price of a certain food rises, other things remaining the same, .Consumers .

Some sales managers are talking shop.Which of the following quotations refers to a movement along the demand curve?

If the market for Twinkies is in equilibrium, then

If A and B are complements and the cost of a factor of production used in the production of A decreases, then the price of

The price of good X falls and the demand for good Y decreases.We can conclude that

A market where no single buyer or seller can influence the price is

When a shortage occurs, there is a tendency for the

The y- axis intercept of the supply curve is 40 and the slope is 6.The equation of the supply curve is

A shortage is the amount by which quantity

Use the figure below to answer the following questions. Figure 3.2.2 -Refer to Figure 3.2.2.If consumers' income increases,

Use the table below to answer the following questions. Table 3.5.1 The Market for Car-Seat Heaters -Refer to Table 3.5.1.The equilibrium price is $ and the equilibrium quantity is heaters per month.

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

Which one of the following correctly describes how price adjustment eliminates a surplus?

If the number of suppliers of good Y increases, then

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

What Is Economics

The Economic Problem

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters

Exam 3: Demand and Supply

Which of the following decreases the supply of popcorn?

A shortage will exist if

The substitution effect influences food purchases because when the price of a certain food rises, other things remaining the same, ________.Consumers ________.

Some sales managers are talking shop.Which of the following quotations refers to a movement along the demand curve?

If the market for Twinkies is in equilibrium, then

If A and B are complements and the cost of a factor of production used in the production of A decreases, then the price of

The price of good X falls and the demand for good Y decreases.We can conclude that

A market where no single buyer or seller can influence the price is

When a shortage occurs, there is a tendency for the

The y- axis intercept of the supply curve is 40 and the slope is 6.The equation of the supply curve is

A shortage is the amount by which quantity

Use the figure below to answer the following questions. Figure 3.2.2 -Refer to Figure 3.2.2.If consumers' income increases,

Use the table below to answer the following questions. Table 3.5.1 The Market for Car-Seat Heaters -Refer to Table 3.5.1.The equilibrium price is $________ and the equilibrium quantity is ________ heaters per month.

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

Which one of the following correctly describes how price adjustment eliminates a surplus?

If the number of suppliers of good Y increases, then

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

What Is Economics

The Economic Problem

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters

The substitution effect influences food purchases because when the price of a certain food rises, other things remaining the same, .Consumers .

Use the table below to answer the following questions. Table 3.5.1 The Market for Car-Seat Heaters -Refer to Table 3.5.1.The equilibrium price is $ and the equilibrium quantity is heaters per month.