Question 1

An increase in supply is shown by

Accepted Answer

A) a movement down along the supply curve. 
B) a movement up along the supply curve. 
C) a rightward shift of the supply curve. 
D) a leftward shift of the supply curve. 
E) an initial movement up and then down along the same supply curve. 
A) a movement down along the supply curve. 
B) a movement up along the supply curve. 
C) a rightward shift of the supply curve. 
D) a leftward shift of the supply curve. 
E) an initial movement up and then down along the same supply curve.

Question 2

Refer to the table below for the following question.
Table 3.4.2
  
-Refer to Table 3.4.2.The table shows the demand and supply schedules for shampoo.If the price is $6 a bottle, there is a ________ of shampoo.So the price of a bottle of shampoo ________, the quantity demanded ________ and the quantity supplied ________.The market moves to equilibrium.

Accepted Answer

A) shortage; rises; decreases; increases 
B) shortage; falls; decreases; increases 
C) surplus; rises; increases; decreases 
D) surplus; falls; increases; decreases 
E) shortage; rises; increases; decreases 
A) shortage; rises; decreases; increases 
B) shortage; falls; decreases; increases 
C) surplus; rises; increases; decreases 
D) surplus; falls; increases; decreases 
E) shortage; rises; increases; decreases

Question 3

The price at which sellers are not willing to supply a good is $70 a unit.As the quantity supplied of the good increases by one unit, the minimum price at which someone is willing to sell that unit increased by $5.What is the equation of this supply curve?

Accepted Answer

A) P = 70 - 5QS 
B) QS = 70 - 5P 
C) P = 5 + 70QS 
D) QS = 5 + 70P 
E) P = 70 + 5QS 
A) P = 70 - 5QS 
B) QS = 70 - 5P 
C) P = 5 + 70QS 
D) QS = 5 + 70P 
E) P = 70 + 5QS

Question 4

The price of a good will fall if

Accepted Answer

A) demand for the good increases. 
B) supply of the good decreases. 
C) supply of the good increases. 
D) demand for the good remains constant. 
E) supply of the good remains constant. 
A) demand for the good increases. 
B) supply of the good decreases. 
C) supply of the good increases. 
D) demand for the good remains constant. 
E) supply of the good remains constant.

Question 5

Use the table below to answer the following questions.
Table 3.5.4
Quantities demanded and supplied in equilibrium
before and after a drought strikes potato farms
  
-Refer to Table 3.5.4.In Region 1, potatoes and hamburgers are

Accepted Answer

A) substitutes. 
B) complements. 
C) normal goods. 
D) unrelated goods. 
E) inferior goods. 
A) substitutes. 
B) complements. 
C) normal goods. 
D) unrelated goods. 
E) inferior goods.

Question 6

Some producers are chatting over a beer.Which one of the following quotations refers to a movement along the supply curve?

Accepted Answer

A) "Wage increases have forced us to raise our prices." 
B) "Our new, sophisticated equipment will enable us to undercut our competitors." 
C) "Raw material prices have sky-rocketed; we will have to pass the cost on to our customers." 
D) "We anticipate a big increase in demand. Our product price should rise, so we are planning for an increase in output." 
E) "New competitors in the industry are causing prices to fall." 
A) "Wage increases have forced us to raise our prices." 
B) "Our new, sophisticated equipment will enable us to undercut our competitors." 
C) "Raw material prices have sky-rocketed; we will have to pass the cost on to our customers." 
D) "We anticipate a big increase in demand. Our product price should rise, so we are planning for an increase in output." 
E) "New competitors in the industry are causing prices to fall."

Question 7

Some sales managers are talking shop.Which one of the following quotations refers to a leftward shift of 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 8

The fish stocks in the Atlantic fishing industry have decreased.As a result, we would expect

Accepted Answer

A) an increase in the demand for meat (e.g., beef)because meat is a complement of fish. 
B) a fall in the price of fish, leading to a decrease in the demand for meat, because meat and fish are substitutes. 
C) a fall in the price of fish, leading to an increase in the demand for meat, because meat and fish are substitutes. 
D) an increase in the demand for meat because meat is a substitute for fish. 
E) a rise in the price of fish, leading to a decrease in the demand for meat, because meat and fish are complements. 
A) an increase in the demand for meat (e.g., beef)because meat is a complement of fish. 
B) a fall in the price of fish, leading to a decrease in the demand for meat, because meat and fish are substitutes. 
C) a fall in the price of fish, leading to an increase in the demand for meat, because meat and fish are substitutes. 
D) an increase in the demand for meat because meat is a substitute for fish. 
E) a rise in the price of fish, leading to a decrease in the demand for meat, because meat and fish are complements.

Question 9

Use the table below to answer the following questions.
Table 3.1.1
  
-Refer to Table 3.1.1.Between 2012 and 2013, the price of coffee relative to the price of tea ________ while the price of coffee relative to the price of cola ________.

Accepted Answer

A) rose; rose 
B) rose; fell 
C) fell; rose 
D) fell; fell 
E) fell; stayed constant 
A) rose; rose 
B) rose; fell 
C) fell; rose 
D) fell; fell 
E) fell; stayed constant

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

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 cow manure.If the price of milk, a complement in production of manure, rises, what is the new manure 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 12

Since 1980, there has been a dramatic increase in the number of working mothers.Based on this information alone, we can predict that the market for child care services has experienced

Accepted Answer

A) an increase in demand. 
B) a decrease in demand. 
C) an increase in quantity demanded. 
D) a decrease in quantity supplied. 
E) an increase in supply. 
A) an increase in demand. 
B) a decrease in demand. 
C) an increase in quantity demanded. 
D) a decrease in quantity supplied. 
E) an increase in supply.

Question 13

French fries and baked potatoes are

Accepted Answer

A) complements for consumers and complements in production for producers. 
B) substitutes for consumers and substitutes in production for producers. 
C) complements for consumers and substitutes in production for producers. 
D) substitutes in production for consumers and inferior goods for producers. 
E) normal goods for consumers and complements for producers. 
A) complements for consumers and complements in production for producers. 
B) substitutes for consumers and substitutes in production for producers. 
C) complements for consumers and substitutes in production for producers. 
D) substitutes in production for consumers and inferior goods for producers. 
E) normal goods for consumers and complements for producers.

Question 14

If a factor of production can be used to produce either good A or good B, then A and B are

Accepted Answer

A) substitutes in production. 
B) complements in production. 
C) substitutes. 
D) complements. 
E) normal goods. 
A) substitutes in production. 
B) complements in production. 
C) substitutes. 
D) complements. 
E) normal goods.

Question 15

Tom and Don have different opportunity costs of producing two goods.If Tom and Don specialize in producing the goods in which each has a comparative advantage and they exchange goods, then

Accepted Answer

A) they each lose because they are no longer able to produce and consume both goods. 
B) one of them will gain and one of them will lose. 
C) each will gain because each can consume a combination of goods that is outside his production possibility frontier. 
D) each will produce a combination of goods that is outside his production possibilities frontier. 
E) each will produce a combination of goods that is inside his production possibilities frontier. 
A) they each lose because they are no longer able to produce and consume both goods. 
B) one of them will gain and one of them will lose. 
C) each will gain because each can consume a combination of goods that is outside his production possibility frontier. 
D) each will produce a combination of goods that is outside his production possibilities frontier. 
E) each will produce a combination of goods that is inside his production possibilities frontier.

Question 16

If a turnip is an inferior good, then, ceteris paribus, an increase in the price of a turnip will

Accepted Answer

A) decrease the demand for turnips. 
B) increase the demand for turnips. 
C) decrease the supply of turnips. 
D) increase the supply of turnips. 
E) decrease the quantity of turnips demanded. 
A) decrease the demand for turnips. 
B) increase the demand for turnips. 
C) decrease the supply of turnips. 
D) increase the supply of turnips. 
E) decrease the quantity of turnips demanded.

Question 17

Use the table below to answer the following questions.
Table 3.4.1
  
-Refer to Table 3.4.1.If the price is $7, then the surplus is

Accepted Answer

A) 360 units. 
B) 400 units. 
C) 160 units. 
D) zero units. 
E) 290 units. 
A) 360 units. 
B) 400 units. 
C) 160 units. 
D) zero units. 
E) 290 units.

Question 18

If demand decreases and supply increases, then the

Accepted Answer

A) equilibrium quantity increases, but the effect on the equilibrium price is unknown. 
B) equilibrium quantity decreases, but the effect on the equilibrium price is unknown. 
C) equilibrium price falls, but the effect on the equilibrium quantity is unknown. 
D) equilibrium price rises, but the effect on the equilibrium quantity is unknown. 
E) effect on both equilibrium price and quantity is unknown. 
A) equilibrium quantity increases, but the effect on the equilibrium price is unknown. 
B) equilibrium quantity decreases, but the effect on the equilibrium price is unknown. 
C) equilibrium price falls, but the effect on the equilibrium quantity is unknown. 
D) equilibrium price rises, but the effect on the equilibrium quantity is unknown. 
E) effect on both equilibrium price and quantity is unknown.

Question 19

Use the figure below to answer the following questions.
   
Figure 3.5.1
-Initially, the demand curve for good A is D₂ in Figure 3.5.1.If income increases and A is a normal good, we would expect to see a movement from point A to point

Accepted Answer

A) B. 
B) C. 
C) D. 
D) E. 
E) C and back to point A. 
A) B. 
B) C. 
C) D. 
D) E. 
E) C and back to point A.

Question 20

Use the figure below to answer the following questions.
   
Figure 3.4.2
-At a price of $4 a unit in Figure 3.4.2,

Accepted Answer

A) the equilibrium quantity is 400 units. 
B) there is a surplus of 200 units. 
C) the quantity supplied is 400 units. 
D) there is a shortage of 200 units. 
E) the quantity demanded is 200 units. 
A) the equilibrium quantity is 400 units. 
B) there is a surplus of 200 units. 
C) the quantity supplied is 400 units. 
D) there is a shortage of 200 units. 
E) the quantity demanded is 200 units.

An increase in supply is shown by

The price at which sellers are not willing to supply a good is $70 a unit.As the quantity supplied of the good increases by one unit, the minimum price at which someone is willing to sell that unit increased by $5.What is the equation of this supply curve?

The price of a good will fall if

Use the table below to answer the following questions. Table 3.5.4 Quantities demanded and supplied in equilibrium before and after a drought strikes potato farms -Refer to Table 3.5.4.In Region 1, potatoes and hamburgers are

Some producers are chatting over a beer.Which one of the following quotations refers to a movement along the supply curve?

Some sales managers are talking shop.Which one of the following quotations refers to a leftward shift of the demand curve?

The fish stocks in the Atlantic fishing industry have decreased.As a result, we would expect

Use the table below to answer the following questions. Table 3.1.1 -Refer to Table 3.1.1.Between 2012 and 2013, the price of coffee relative to the price of tea while the price of coffee relative to the price of cola .

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

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 cow manure.If the price of milk, a complement in production of manure, rises, what is the new manure equilibrium, ceteris paribus?

Since 1980, there has been a dramatic increase in the number of working mothers.Based on this information alone, we can predict that the market for child care services has experienced

French fries and baked potatoes are

If a factor of production can be used to produce either good A or good B, then A and B are

Tom and Don have different opportunity costs of producing two goods.If Tom and Don specialize in producing the goods in which each has a comparative advantage and they exchange goods, then

If a turnip is an inferior good, then, ceteris paribus, an increase in the price of a turnip will

Use the table below to answer the following questions. Table 3.4.1 -Refer to Table 3.4.1.If the price is $7, then the surplus is

If demand decreases and supply increases, then the

Use the figure below to answer the following questions. Figure 3.5.1 -Initially, the demand curve for good A is D₂ in Figure 3.5.1.If income increases and A is a normal good, we would expect to see a movement from point A to point

Use the figure below to answer the following questions. Figure 3.4.2 -At a price of $4 a unit in Figure 3.4.2,

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

An increase in supply is shown by

The price at which sellers are not willing to supply a good is $70 a unit.As the quantity supplied of the good increases by one unit, the minimum price at which someone is willing to sell that unit increased by $5.What is the equation of this supply curve?

The price of a good will fall if

Use the table below to answer the following questions. Table 3.5.4 Quantities demanded and supplied in equilibrium before and after a drought strikes potato farms -Refer to Table 3.5.4.In Region 1, potatoes and hamburgers are

Some producers are chatting over a beer.Which one of the following quotations refers to a movement along the supply curve?

Some sales managers are talking shop.Which one of the following quotations refers to a leftward shift of the demand curve?

The fish stocks in the Atlantic fishing industry have decreased.As a result, we would expect

Use the table below to answer the following questions. Table 3.1.1 -Refer to Table 3.1.1.Between 2012 and 2013, the price of coffee relative to the price of tea ________ while the price of coffee relative to the price of cola ________.

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

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 cow manure.If the price of milk, a complement in production of manure, rises, what is the new manure equilibrium, ceteris paribus?

Since 1980, there has been a dramatic increase in the number of working mothers.Based on this information alone, we can predict that the market for child care services has experienced

French fries and baked potatoes are

If a factor of production can be used to produce either good A or good B, then A and B are

Tom and Don have different opportunity costs of producing two goods.If Tom and Don specialize in producing the goods in which each has a comparative advantage and they exchange goods, then

If a turnip is an inferior good, then, ceteris paribus, an increase in the price of a turnip will

Use the table below to answer the following questions. Table 3.4.1 -Refer to Table 3.4.1.If the price is $7, then the surplus is

If demand decreases and supply increases, then the

Use the figure below to answer the following questions. Figure 3.5.1 -Initially, the demand curve for good A is D₂ in Figure 3.5.1.If income increases and A is a normal good, we would expect to see a movement from point A to point

Use the figure below to answer the following questions. Figure 3.4.2 -At a price of $4 a unit in Figure 3.4.2,

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

Use the table below to answer the following questions. Table 3.1.1 -Refer to Table 3.1.1.Between 2012 and 2013, the price of coffee relative to the price of tea while the price of coffee relative to the price of cola .