Question 1

Studies have shown links between calcium consumption and a reduction in osteoporosis.How does this affect the market for calcium?

Accepted Answer

A)  The calcium supply curve shifts to the right because of a change in tastes in favor of calcium. 
B)  The calcium demand curve shifts to the right because of a change in tastes in favor of calcium. 
C)  The calcium demand curve shifts to the left because this new information will increase the price of calcium. 
D)  The calcium supply curve shifts to the left because this new information will increase the price of calcium. 
A)  The calcium supply curve shifts to the right because of a change in tastes in favor of calcium. 
B)  The calcium demand curve shifts to the right because of a change in tastes in favor of calcium. 
C)  The calcium demand curve shifts to the left because this new information will increase the price of calcium. 
D)  The calcium supply curve shifts to the left because this new information will increase the price of calcium.

Question 2

Assume that the hourly price for the services of tarot card readers has risen and sales of these services have also risen.One can conclude that

Accepted Answer

A)  the law of demand has been violated. 
B)  the number of tarot card readers has increased. 
C)  the demand for tarot card readers has increased. 
D)  tarot card readers are deliberately charging high prices because they provide services for superstitious clients. 
A)  the law of demand has been violated. 
B)  the number of tarot card readers has increased. 
C)  the demand for tarot card readers has increased. 
D)  tarot card readers are deliberately charging high prices because they provide services for superstitious clients.

Question 3

Table 3-1
  
-Refer to Table 3-1.The table above shows the demand schedules for loose-leaf tea of two individuals (Sunil and Mia)and the rest of the market.At a price of $5,the quantity demanded in the market would be

Accepted Answer

A)  51 lbs. 
B)  63 lbs. 
C)  76 lbs 
D)  146 lbs. 
A)  51 lbs. 
B)  63 lbs. 
C)  76 lbs 
D)  146 lbs.

Question 4

In October,market analysts predict that the price of platinum will fall in November.What happens in the platinum market in October,holding everything else constant?

Accepted Answer

A)  The supply curve shifts to the right. 
B)  The supply curve shifts to the left. 
C)  The quantity demanded and the quantity supplied of platinum increase. 
D)  The demand curve shifts to the right. 
A)  The supply curve shifts to the right. 
B)  The supply curve shifts to the left. 
C)  The quantity demanded and the quantity supplied of platinum increase. 
D)  The demand curve shifts to the right.

Question 5

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 6

If the price of grapefruit rises,the substitution effect due to the price change will cause

Accepted Answer

A)  a decrease in the demand for grapefruit. 
B)  a decrease in the demand for oranges, a substitute for grapefruit. 
C)  a decrease in the quantity demanded of grapefruit. 
D)  a decrease in the quantity supplied of grapefruit. 
A)  a decrease in the demand for grapefruit. 
B)  a decrease in the demand for oranges, a substitute for grapefruit. 
C)  a decrease in the quantity demanded of grapefruit. 
D)  a decrease in the quantity supplied of grapefruit.

Question 7

Figure 3-6
  
-Refer to Figure 3-6.The figure above represents the market for canvas tote bags.Assume that the price of tote bags is $15.At this price:

Accepted Answer

A)  the quantity demanded exceeds the quantity supplied of tote bags by 75. The price will eventually rise to $25 where quantity demanded will equal quantity supplied. 
B)  the demand exceeds the supply of tote bags by 55. Some consumers will have an incentive to offer to buy tote bags at a higher price. 
C)  there is a shortage, equal to 55 tote bags, that will be eliminated when the price rises to $25. 
D)  there is a shortage equal to 55 tote bags; the price of tote bags will rise until demand is equal to supply. 
A)  the quantity demanded exceeds the quantity supplied of tote bags by 75. The price will eventually rise to $25 where quantity demanded will equal quantity supplied. 
B)  the demand exceeds the supply of tote bags by 55. Some consumers will have an incentive to offer to buy tote bags at a higher price. 
C)  there is a shortage, equal to 55 tote bags, that will be eliminated when the price rises to $25. 
D)  there is a shortage equal to 55 tote bags; the price of tote bags will rise until demand is equal to supply.

Question 8

In October 2005,the U.S.Fish and Wildlife Service banned the importation of beluga caviar,the most prized of caviars,from the Caspian Sea.What happened in the market for caviar in the U.S.?

Accepted Answer

A)  The supply curve shifted to the left. 
B)  The supply curve shifted to the right. 
C)  The demand curve shifted to the right. 
D)  The demand curve shifted to the left. 
A)  The supply curve shifted to the left. 
B)  The supply curve shifted to the right. 
C)  The demand curve shifted to the right. 
D)  The demand curve shifted to the left.

Question 9

Figure 3-1
  
-Refer to Figure 3-1.An increase in population 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 10

Table 3-2
  
-Refer to Table 3-2.The table contains information about the corn market.Use the table to answer the following questions.
a.What are the equilibrium price and quantity of corn?
b.Suppose the prevailing price is $9 per bushel.Is there a shortage or a surplus in the market?
c.What is the quantity of the shortage or surplus?
d.How many bushels will be sold if the market price is $9 per bushel?
e.If the market price is $9 per bushel,what must happen to restore equilibrium in the market?
f.At what price will suppliers be able to sell 22,000 bushels of corn?
g.Suppose the market price is $21 per bushel.Is there a shortage or a surplus in the market?
h.What is the quantity of the shortage or surplus?
i.How many bushels will be sold if the market price is $21 per bushel?
j.If the market price is $21 per bushel,what must happen to restore equilibrium in the market?

Accepted Answer

a.Equilibrium price = $15; Equilibrium q

Question 11

Assume that both the demand curve and the supply curve for MP3 players shift to the right but the demand curve shifts more than the supply curve.As a result

Accepted Answer

A)  both the equilibrium price and quantity of MP3 players will increase. 
B)  the equilibrium price of MP3 players will increase; the equilibrium quantity may increase or decrease. 
C)  the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will increase. 
D)  the equilibrium price of MP3 players will decrease; the equilibrium quantity may increase or decrease. 
A)  both the equilibrium price and quantity of MP3 players will increase. 
B)  the equilibrium price of MP3 players will increase; the equilibrium quantity may increase or decrease. 
C)  the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will increase. 
D)  the equilibrium price of MP3 players will decrease; the equilibrium quantity may increase or decrease.

Question 12

Suppose that when the price of hamburgers decreases,the Ruiz family increases their purchases of ketchup.To the Ruiz family,

Accepted Answer

A)  hamburgers and ketchup are complements. 
B)  hamburgers and ketchup and substitutes. 
C)  hamburgers and ketchup are normal goods. 
D)  hamburgers are normal goods and hot dogs are inferior goods. 
A)  hamburgers and ketchup are complements. 
B)  hamburgers and ketchup and substitutes. 
C)  hamburgers and ketchup are normal goods. 
D)  hamburgers are normal goods and hot dogs are inferior goods.

Question 13

Which of the following is the correct way to describe equilibrium in a market?

Accepted Answer

A)  At equilibrium, demand equals supply. 
B)  At equilibrium, quantity demanded equals quantity supplied. 
C)  At equilibrium, market forces no longer apply. 
D)  At equilibrium, scarcity is eliminated. 
A)  At equilibrium, demand equals supply. 
B)  At equilibrium, quantity demanded equals quantity supplied. 
C)  At equilibrium, market forces no longer apply. 
D)  At equilibrium, scarcity is eliminated.

Question 14

Figure 3-6
  
-Refer to Figure 3-6.The figure above represents the market for canvas tote bags.Compare the conditions in the market when the price is $50 and when the price is $35.Which of the following describes how the market differs at these prices?

Accepted Answer

A)  At each price there is a surplus; the surplus is greater at $35 than at $50. 
B)  The difference between quantity supplied and quantity demanded is greater at $50 than at $35. 
C)  At each price there is a surplus; firms will lower the equilibrium price in order to eliminate the surplus. 
D)  At each price the supply of tote bags exceeds that demand for tote bags. 
A)  At each price there is a surplus; the surplus is greater at $35 than at $50. 
B)  The difference between quantity supplied and quantity demanded is greater at $50 than at $35. 
C)  At each price there is a surplus; firms will lower the equilibrium price in order to eliminate the surplus. 
D)  At each price the supply of tote bags exceeds that demand for tote bags.

Question 15

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 16

Auctions in recent years have resulted in higher prices paid for letters written by John Wilkes Booth than those written by Abraham Lincoln.What is a reason for this difference in price?

Accepted Answer

A)  There is a surplus of letters written by Booth and a shortage of letters written by Lincoln. 
B)  Many people are more fascinated by villains and anti-heroes than by heroic figures. 
C)  There are more letters available for collectors to buy that were written by Lincoln than there are letters that were written by Booth. 
D)  Booth was a well-known actor; the demand for his letters rose as wealthy actors attempted to buy them. 
A)  There is a surplus of letters written by Booth and a shortage of letters written by Lincoln. 
B)  Many people are more fascinated by villains and anti-heroes than by heroic figures. 
C)  There are more letters available for collectors to buy that were written by Lincoln than there are letters that were written by Booth. 
D)  Booth was a well-known actor; the demand for his letters rose as wealthy actors attempted to buy them.

Question 17

The following appeared in a Florida newspaper a week after a hurricane hit the state."Floridians are relieved that the storm produced no fatalities but homeowners face weeks,if not months,of rebuilding.Matters are made worse by the soaring prices of plywood and other building materials that always follow in a hurricane's path.Complaints of profiteering and price gouging have not deterred firms from raising their prices by over 100 percent." Which of the following offers the best explanation for the price increases referred to in the article?

Accepted Answer

A)  The hurricane reduced the number of suppliers of building materials. 
B)  The hurricane created an artificial shortage of building materials. 
C)  The hurricane caused an increase in the demand for building materials. 
D)  There was a reduction in supply as firms shipped plywood and other materials to locations not affected by the storm. 
A)  The hurricane reduced the number of suppliers of building materials. 
B)  The hurricane created an artificial shortage of building materials. 
C)  The hurricane caused an increase in the demand for building materials. 
D)  There was a reduction in supply as firms shipped plywood and other materials to locations not affected by the storm.

Question 18

How does the increasing use of MP3 players affect the market for compact discs?

Accepted Answer

A)  The demand curve for compact discs shifts to the right. 
B)  The supply curve for compact discs shifts to the left. 
C)  The supply curve for compact discs shifts to the right. 
D)  The demand curve for compact discs shifts to the left. 
A)  The demand curve for compact discs shifts to the right. 
B)  The supply curve for compact discs shifts to the left. 
C)  The supply curve for compact discs shifts to the right. 
D)  The demand curve for compact discs shifts to the left.

Question 19

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 20

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

Studies have shown links between calcium consumption and a reduction in osteoporosis.How does this affect the market for calcium?

Assume that the hourly price for the services of tarot card readers has risen and sales of these services have also risen.One can conclude that

Table 3-1 -Refer to Table 3-1.The table above shows the demand schedules for loose-leaf tea of two individuals (Sunil and Mia)and the rest of the market.At a price of $5,the quantity demanded in the market would be

In October,market analysts predict that the price of platinum will fall in November.What happens in the platinum market in October,holding everything else constant?

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

If the price of grapefruit rises,the substitution effect due to the price change will cause

Figure 3-6 -Refer to Figure 3-6.The figure above represents the market for canvas tote bags.Assume that the price of tote bags is $15.At this price:

In October 2005,the U.S.Fish and Wildlife Service banned the importation of beluga caviar,the most prized of caviars,from the Caspian Sea.What happened in the market for caviar in the U.S.?

Figure 3-1 -Refer to Figure 3-1.An increase in population would be represented by a movement from

Assume that both the demand curve and the supply curve for MP3 players shift to the right but the demand curve shifts more than the supply curve.As a result

Suppose that when the price of hamburgers decreases,the Ruiz family increases their purchases of ketchup.To the Ruiz family,

Which of the following is the correct way to describe equilibrium in a market?

Figure 3-6 -Refer to Figure 3-6.The figure above represents the market for canvas tote bags.Compare the conditions in the market when the price is $50 and when the price is $35.Which of the following describes how the market differs at these prices?

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.

Auctions in recent years have resulted in higher prices paid for letters written by John Wilkes Booth than those written by Abraham Lincoln.What is a reason for this difference in price?

How does the increasing use of MP3 players affect the market for compact discs?

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

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

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

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

Studies have shown links between calcium consumption and a reduction in osteoporosis.How does this affect the market for calcium?

Assume that the hourly price for the services of tarot card readers has risen and sales of these services have also risen.One can conclude that

Table 3-1 -Refer to Table 3-1.The table above shows the demand schedules for loose-leaf tea of two individuals (Sunil and Mia)and the rest of the market.At a price of $5,the quantity demanded in the market would be

In October,market analysts predict that the price of platinum will fall in November.What happens in the platinum market in October,holding everything else constant?

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

If the price of grapefruit rises,the substitution effect due to the price change will cause

Figure 3-6 -Refer to Figure 3-6.The figure above represents the market for canvas tote bags.Assume that the price of tote bags is $15.At this price:

In October 2005,the U.S.Fish and Wildlife Service banned the importation of beluga caviar,the most prized of caviars,from the Caspian Sea.What happened in the market for caviar in the U.S.?

Figure 3-1 -Refer to Figure 3-1.An increase in population would be represented by a movement from

Assume that both the demand curve and the supply curve for MP3 players shift to the right but the demand curve shifts more than the supply curve.As a result

Suppose that when the price of hamburgers decreases,the Ruiz family increases their purchases of ketchup.To the Ruiz family,

Which of the following is the correct way to describe equilibrium in a market?

Figure 3-6 -Refer to Figure 3-6.The figure above represents the market for canvas tote bags.Compare the conditions in the market when the price is $50 and when the price is $35.Which of the following describes how the market differs at these prices?

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.

Auctions in recent years have resulted in higher prices paid for letters written by John Wilkes Booth than those written by Abraham Lincoln.What is a reason for this difference in price?

How does the increasing use of MP3 players affect the market for compact discs?

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

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

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

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