Question 1

Figure 3-2
  
-Refer to Figure 3-2.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) S₁ to S₂. 
D) S₂ to S₁. 
A) A to B. 
B) B to A. 
C) S₁ to S₂. 
D) S₂ to S₁.

Question 2

The law of demand implies, holding everything else constant, that as the price of gelato

Accepted Answer

A) increases, the demand for gelato will increase. 
B) increases, the quantity of gelato demanded will increase. 
C) decreases, the quantity of gelato demanded will increase. 
D) decreases, the demand for gelato will increase. 
A) increases, the demand for gelato will increase. 
B) increases, the quantity of gelato demanded will increase. 
C) decreases, the quantity of gelato demanded will increase. 
D) decreases, the demand for gelato will increase.

Question 3

What are the five variables that will shift the demand curve?

Accepted Answer

1.Income
2.Price of

Question 4

If a firm has an incentive to increase supply now and decrease supply in the future, then the firm expects that the

Accepted Answer

A) price of its product will be lower in the future than it is today. 
B) price of its product will be higher in the future than it is today. 
C) price of inputs will be lower in the future than they are today. 
D) demand for the product will be lower in the future than it is today. 
A) price of its product will be lower in the future than it is today. 
B) price of its product will be higher in the future than it is today. 
C) price of inputs will be lower in the future than they are today. 
D) demand for the product will be lower in the future than it is today.

Question 5

Which of the following is evidence of a shortage of walnuts?

Accepted Answer

A) Firms lower the price of walnuts. 
B) The price of cashews is lowered in order to make up for the walnut shortage. 
C) The equilibrium price of walnuts falls due to a decrease in demand. 
D) The quantity of walnuts demanded is greater than the quantity supplied. 
A) Firms lower the price of walnuts. 
B) The price of cashews is lowered in order to make up for the walnut shortage. 
C) The equilibrium price of walnuts falls due to a decrease in demand. 
D) The quantity of walnuts demanded is greater than the quantity supplied.

Question 6

Last year, the Pottery Palace supplied 8,000 ceramic pots at $40 each.This year, the company supplied the same quantity of ceramic pots at $55 each.Based on this evidence, The Pottery Palace has experienced

Accepted Answer

A) a decrease in supply. 
B) an increase in supply. 
C) an increase in the quantity supplied. 
D) a decrease in the quantity supplied. 
A) a decrease in supply. 
B) an increase in supply. 
C) an increase in the quantity supplied. 
D) a decrease in the quantity supplied.

Question 7

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

Question 8

If the number of firms producing mouthwash increases and consumer preference for mouthwash increases, the equilibrium price of mouthwash will definitely increase.

Accepted Answer

A) True 
 B)False

Question 9

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 10

An inferior good is a good for which the quantity demanded decreases as the price increases, holding everything else constant.

Accepted Answer

A) True 
 B)False

Question 11

Figure 3-5
  
-Refer to Figure 3-5.At a price of $5, the quantity sold

Accepted Answer

A) is 2 units. 
B) is 4 units. 
C) is 6 units. 
D) cannot be determined. 
A) is 2 units. 
B) is 4 units. 
C) is 6 units. 
D) cannot be determined.

Question 12

A shortage is defined as the situation that exists when the quantity of a good supplied is greater than the quantity demanded.

Accepted Answer

A) True 
 B)False

Question 13

Studies have shown that drinking one glass of red wine per day may help prevent heart disease.Assume this is true, and favorable weather has increased the grape harvest of California vineyards.In the market for red wine, these two developments would

Accepted Answer

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

Question 14

A supply schedule

Accepted Answer

A) is a table that shows the relationship between the price of a product and the quantity of the product supplied. 
B) is a curve that shows the relationship between the price of a product and the quantity of the product supplied. 
C) is the relationship between the supply of a product and the cost of producing the product. 
D) is a table that shows the relationship between the price of a product and the quantity of the product that producers and consumers are willing to exchange. 
A) is a table that shows the relationship between the price of a product and the quantity of the product supplied. 
B) is a curve that shows the relationship between the price of a product and the quantity of the product supplied. 
C) is the relationship between the supply of a product and the cost of producing the product. 
D) is a table that shows the relationship between the price of a product and the quantity of the product that producers and consumers are willing to exchange.

Question 15

An increase in the price of inputs will cause the supply curve for a product to shift to the right.

Accepted Answer

A) True 
 B)False

Question 16

Danielle Ocean pays for monthly pool maintenance for her home swimming pool.Last week the owner of the pool service informed Danielle that he will have to raise his monthly service fee because of increases in the price of pool chemicals.How is the market for pool maintenance services affected by this?

Accepted Answer

A) There is an increase in the supply of pool maintenance services. 
B) There is a decrease in the demand for pool maintenance services. 
C) There is a decrease in the quantity of pool maintenance services supplied. 
D) There is a decrease in the supply of pool maintenance services. 
A) There is an increase in the supply of pool maintenance services. 
B) There is a decrease in the demand for pool maintenance services. 
C) There is a decrease in the quantity of pool maintenance services supplied. 
D) There is a decrease in the supply of pool maintenance services.

Question 17

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 statements 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 18

Figure 3-1
  
-Refer to Figure 3-1.A decrease in the price of a complementary good 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 19

If the price of peaches, a substitute for plums, decreases the demand for plums will increase.

Accepted Answer

A) True 
 B)False

Question 20

A change in all of the following variables will change the market demand for a product except

Accepted Answer

A) the price of the product. 
B) population and demographics. 
C) income. 
D) tastes. 
A) the price of the product. 
B) population and demographics. 
C) income. 
D) tastes.

Figure 3-2 -Refer to Figure 3-2.A decrease in the price of the product would be represented by a movement from

The law of demand implies, holding everything else constant, that as the price of gelato

What are the five variables that will shift the demand curve?

If a firm has an incentive to increase supply now and decrease supply in the future, then the firm expects that the

Which of the following is evidence of a shortage of walnuts?

Last year, the Pottery Palace supplied 8,000 ceramic pots at $40 each.This year, the company supplied the same quantity of ceramic pots at $55 each.Based on this evidence, The Pottery Palace has experienced

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

If the number of firms producing mouthwash increases and consumer preference for mouthwash increases, the equilibrium price of mouthwash will definitely increase.

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?

An inferior good is a good for which the quantity demanded decreases as the price increases, holding everything else constant.

Figure 3-5 -Refer to Figure 3-5.At a price of $5, the quantity sold

A shortage is defined as the situation that exists when the quantity of a good supplied is greater than the quantity demanded.

Studies have shown that drinking one glass of red wine per day may help prevent heart disease.Assume this is true, and favorable weather has increased the grape harvest of California vineyards.In the market for red wine, these two developments would

A supply schedule

An increase in the price of inputs will cause the supply curve for a product to shift to the right.

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 statements is true?

Figure 3-1 -Refer to Figure 3-1.A decrease in the price of a complementary good would be represented by a movement from

If the price of peaches, a substitute for plums, decreases the demand for plums will increase.

A change in all of the following variables will change the market demand for a product except

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

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

Figure 3-2 -Refer to Figure 3-2.A decrease in the price of the product would be represented by a movement from

The law of demand implies, holding everything else constant, that as the price of gelato

What are the five variables that will shift the demand curve?

If a firm has an incentive to increase supply now and decrease supply in the future, then the firm expects that the

Which of the following is evidence of a shortage of walnuts?

Last year, the Pottery Palace supplied 8,000 ceramic pots at $40 each.This year, the company supplied the same quantity of ceramic pots at $55 each.Based on this evidence, The Pottery Palace has experienced

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

If the number of firms producing mouthwash increases and consumer preference for mouthwash increases, the equilibrium price of mouthwash will definitely increase.

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?

An inferior good is a good for which the quantity demanded decreases as the price increases, holding everything else constant.

Figure 3-5 -Refer to Figure 3-5.At a price of $5, the quantity sold

A shortage is defined as the situation that exists when the quantity of a good supplied is greater than the quantity demanded.

Studies have shown that drinking one glass of red wine per day may help prevent heart disease.Assume this is true, and favorable weather has increased the grape harvest of California vineyards.In the market for red wine, these two developments would

A supply schedule

An increase in the price of inputs will cause the supply curve for a product to shift to the right.

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 statements is true?

Figure 3-1 -Refer to Figure 3-1.A decrease in the price of a complementary good would be represented by a movement from

If the price of peaches, a substitute for plums, decreases the demand for plums will increase.

A change in all of the following variables will change the market demand for a product except

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Filters