Question 1

Which of the following does NOT increase the supply of personal computers, that is, does NOT shift the supply curve of personal computers?

Accepted Answer

A)  an advance in the technology used to produce personal computers 
B)  an increase in the number of firms producing personal computer 
C)  a fall in the cost of the components used to assemble personal computers 
D)  a rise the price of a personal computer 
E)  a change in the expected future price of a personal computer. 
A)  an advance in the technology used to produce personal computers 
B)  an increase in the number of firms producing personal computer 
C)  a fall in the cost of the components used to assemble personal computers 
D)  a rise the price of a personal computer 
E)  a change in the expected future price of a personal computer.

Question 2

If both supply and demand decrease by the same amount, the equilibrium price

Accepted Answer

A)  does not change. 
B)  rises. 
C)  falls. 
D)  cannot be predicted. 
E)  None of the answers is correct because the price depends on what happens to the equilibrium quantity. 
A)  does not change. 
B)  rises. 
C)  falls. 
D)  cannot be predicted. 
E)  None of the answers is correct because the price depends on what happens to the equilibrium quantity.

Question 3

EBay

Accepted Answer

A)  will be considered a market when the Internet firms are profitable. 
B)  is a market because buyers and sellers are brought together to buy and sell. 
C)  would be a market if there was only one physical location. 
D)  cannot function as a market. 
E)  is not a market because buyers can buy from only one seller at any point in time. 
A)  will be considered a market when the Internet firms are profitable. 
B)  is a market because buyers and sellers are brought together to buy and sell. 
C)  would be a market if there was only one physical location. 
D)  cannot function as a market. 
E)  is not a market because buyers can buy from only one seller at any point in time.

Question 4

Suppose that the equilibrium price and quantity of new houses both increase.Which of the following could be a cause of this change?

Accepted Answer

A)  Both the supply and the demand for new houses increased and the supply increased by more than the demand. 
B)  The demand for new houses increased and the supply did not change. 
C)  Both the supply and demand for new houses decreased. 
D)  The supply of new houses decreased and the demand for new houses did not change. 
E)  The supply of new houses increased and the demand for new houses did not change. 
A)  Both the supply and the demand for new houses increased and the supply increased by more than the demand. 
B)  The demand for new houses increased and the supply did not change. 
C)  Both the supply and demand for new houses decreased. 
D)  The supply of new houses decreased and the demand for new houses did not change. 
E)  The supply of new houses increased and the demand for new houses did not change.

Question 5

-In the above figure, the shift in the supply curve from S to S₁ reflects

Accepted Answer

A)  an increase in the quantity of pizza supplied. 
B)  a decrease in the quantity of pizza supplied. 
C)  an increase in the supply of pizza. 
D)  a decrease in the supply of pizza. 
E)  None of the above answers is correct. 
A)  an increase in the quantity of pizza supplied. 
B)  a decrease in the quantity of pizza supplied. 
C)  an increase in the supply of pizza. 
D)  a decrease in the supply of pizza. 
E)  None of the above answers is correct.

Question 6

$\begin{array}{ccc}
\begin{array}{c}
\text { Price } \
\text { (dollars } \
\text { per stapler) }
\end{array} & \begin{array}{c}
\text { Quantity demanded } \
\text { (thousands of staplers } \
\text { per week) }
\end{array} & \begin{array}{c}
\text { Quantity supplied } \
\text { (thousands of staplers } \
\text { per week) }
\end{array} \
\hline 8 & 10 & 90 \
7 & 40 & 80 \
6 & 70 & 70 \
5 & 100 & 60
\end{array}$
-Using the data in the table above, if the price of a stapler is $8, then there is a ________ of staplers and the quantity of staplers demanded ________ the quantity of staplers supplied.

Accepted Answer

A)  surplus; is greater than 
B)  surplus; is less than 
C)  shortage; is greater than 
D)  shortage; is less than 
E)  neither a surplus nor a shortage; equals 
A)  surplus; is greater than 
B)  surplus; is less than 
C)  shortage; is greater than 
D)  shortage; is less than 
E)  neither a surplus nor a shortage; equals

Question 7

Which of the following increases the supply of gasoline?

Accepted Answer

A)  a situation where the quantity of gasoline demanded exceeds the quantity supplied 
B)  an increase in the price of gasoline 
C)  a decrease in the price of a resource used to produce gasoline, such as crude oil 
D)  a decrease in the demand for gas-guzzling, sport utility vehicles 
E)  an increase in income if gas-guzzling, sport utility vehicles are a normal good 
A)  a situation where the quantity of gasoline demanded exceeds the quantity supplied 
B)  an increase in the price of gasoline 
C)  a decrease in the price of a resource used to produce gasoline, such as crude oil 
D)  a decrease in the demand for gas-guzzling, sport utility vehicles 
E)  an increase in income if gas-guzzling, sport utility vehicles are a normal good

Question 8

-The figure above shows the market for iPods.Which of the following shifts the demand curve from D₀ to D₂?

Accepted Answer

A)  A decrease in the price of Zunes, a substitute for iPods. 
B)  An increase in the price of iPods. 
C)  A requirement that all students at universities have an iPod. 
D)  A decrease in the price of iPods. 
E)  A decrease in people's incomes if iPods are a normal good. 
A)  A decrease in the price of Zunes, a substitute for iPods. 
B)  An increase in the price of iPods. 
C)  A requirement that all students at universities have an iPod. 
D)  A decrease in the price of iPods. 
E)  A decrease in people's incomes if iPods are a normal good.

Question 9

The impact of an increase in the price of a particular good is illustrated as a

Accepted Answer

A)  leftward shift in its demand curve. 
B)  rightward shift in its demand curve. 
C)  movement upward and to the left along its demand curve. 
D)  movement downward and to the right along its demand curve. 
E)  rightward shift in its demand curve and a movement upward and to the left along its demand curve. 
A)  leftward shift in its demand curve. 
B)  rightward shift in its demand curve. 
C)  movement upward and to the left along its demand curve. 
D)  movement downward and to the right along its demand curve. 
E)  rightward shift in its demand curve and a movement upward and to the left along its demand curve.

Question 10

-Scooters and bicycles are substitutes.Suppose that the price of a bicycle falls.Which of the figures above best illustrates how this fall in price affects the demand curve for scooters?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  None of the above answers is correct because the change in the price of a bicycle will affect the supply curve not the demand curve. 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  None of the above answers is correct because the change in the price of a bicycle will affect the supply curve not the demand curve.

Question 11

The downward slope of a demand curve

Accepted Answer

A)  represents the law of demand. 
B)  shows that as the price of a good rises, consumers increase the quantity they demand. 
C)  indicates how the quantity demanded changes when incomes rise and the good is a normal good. 
D)  indicates how demand changes when incomes rise and the good is a normal good. 
E)  indicates how demand changes when the price changes and the good is a normal good. 
A)  represents the law of demand. 
B)  shows that as the price of a good rises, consumers increase the quantity they demand. 
C)  indicates how the quantity demanded changes when incomes rise and the good is a normal good. 
D)  indicates how demand changes when incomes rise and the good is a normal good. 
E)  indicates how demand changes when the price changes and the good is a normal good.

Question 12

Ramen noodles are a staple food item for many college students.Ramen noodles are very inexpensive, easy to prepare, and can be combined easily with other foods.After students graduate, find employment, and earn a higher income, they decrease their Ramen noodle purchases significantly.In this case, Ramen noodles are

Accepted Answer

A)  a normal good. 
B)  an inferior good. 
C)  a complement for higher income people. 
D)  a substitute good. 
E)  None of the above answers is correct. 
A)  a normal good. 
B)  an inferior good. 
C)  a complement for higher income people. 
D)  a substitute good. 
E)  None of the above answers is correct.

Question 13

-The figure above shows the market for iPods.Which of the following shifts the demand curve from D₀ to D₁?

Accepted Answer

A)  A decrease in the price of Zunes, a substitute for iPods. 
B)  An increase in the price of iPods. 
C)  A requirement that all students at universities have an iPod. 
D)  A decrease in the price of iPods. 
E)  An increase in people's incomes. 
A)  A decrease in the price of Zunes, a substitute for iPods. 
B)  An increase in the price of iPods. 
C)  A requirement that all students at universities have an iPod. 
D)  A decrease in the price of iPods. 
E)  An increase in people's incomes.

Question 14

The number of people looking to buy ceiling fan buyers increases, so there is an increase in the

Accepted Answer

A)  quantity of ceiling fans demanded and a surplus of ceiling fans. 
B)  demand for ceiling fans and a rise in the price of a ceiling fan. 
C)  demand for ceiling fans and a surplus of ceiling fans. 
D)  supply of ceiling fans and no change in the price of a ceiling fan. 
E)  demand for ceiling fans and in the supply of ceiling fans. 
A)  quantity of ceiling fans demanded and a surplus of ceiling fans. 
B)  demand for ceiling fans and a rise in the price of a ceiling fan. 
C)  demand for ceiling fans and a surplus of ceiling fans. 
D)  supply of ceiling fans and no change in the price of a ceiling fan. 
E)  demand for ceiling fans and in the supply of ceiling fans.

Question 15

-Which figure above shows the effect if research is published claiming that eating pizza is healthy?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  Both Figure A and Figure D 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  Both Figure A and Figure D

Question 16

$\begin{array}{ccc}
\begin{array}{c}
\text { Price } \
\text { (dollars per gallon) }
\end{array} & \begin{array}{c}
\text { Quantity demanded } \
\text { (gallons of gasoline) }
\end{array} & \begin{array}{c}
\text { Quantity supplied } \
\text { (gallons of gasoline }
\end{array} \
\hline 3.73 & 337,982 & 441,074 \
3.68 & 396,398 & 428,008 \
3.65 & 412,031 & 412,031 \
3.62 & 417,899 & 391,665
\end{array}$
-The table above shows the situation in the gasoline market in Tulsa, Oklahoma.If the price of a gallon of gasoline is $3.65, then

Accepted Answer

A)  there is a surplus of gasoline in Tulsa. 
B)  there is a shortage of gasoline in Tulsa. 
C)  the gasoline market in Tulsa is in equilibrium. 
D)  without more information we cannot determine if there is a surplus, a shortage, or an equilibrium in the gasoline market in Tulsa. 
E)  there is neither a surplus nor a shortage but the market is NOT in equilibrium. 
A)  there is a surplus of gasoline in Tulsa. 
B)  there is a shortage of gasoline in Tulsa. 
C)  the gasoline market in Tulsa is in equilibrium. 
D)  without more information we cannot determine if there is a surplus, a shortage, or an equilibrium in the gasoline market in Tulsa. 
E)  there is neither a surplus nor a shortage but the market is NOT in equilibrium.

Question 17

-The above figure shows the market for laptops.Which of the following shifts the supply curve from S₀ to S₁?

Accepted Answer

A)  An increase in the cost of hard drives. 
B)  A decrease in the price of laptops. 
C)  An increase in the number of laptop manufactures and sellers. 
D)  An increase in the price of laptops. 
E)  An increase in the productivity of the workers manufacturing laptops. 
A)  An increase in the cost of hard drives. 
B)  A decrease in the price of laptops. 
C)  An increase in the number of laptop manufactures and sellers. 
D)  An increase in the price of laptops. 
E)  An increase in the productivity of the workers manufacturing laptops.

Question 18

-The graph illustrates the supply of sweaters.A fall in the price of sweaters brings

Accepted Answer

A)  a movement along the supply curve. 
B)  a decrease in the quantity supplied of sweaters. 
C)  a shift of the supply curve. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct. 
A)  a movement along the supply curve. 
B)  a decrease in the quantity supplied of sweaters. 
C)  a shift of the supply curve. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct.

Question 19

Personal computers are becoming less expensive as new technology reduces the cost of production.In a supply and demand model, explain the effects of the technological innovations and their effect on the quantity of computers.

Accepted Answer

Advances in technology increase the supp

Question 20

Other things remaining the same, the quantity of a good or service demanded will increase if the price of the good or service

Accepted Answer

A)  rises. 
B)  falls. 
C)  does not change. 
D)  rises or does not change. 
E)  rises or falls. 
A)  rises. 
B)  falls. 
C)  does not change. 
D)  rises or does not change. 
E)  rises or falls.

Which of the following does NOT increase the supply of personal computers, that is, does NOT shift the supply curve of personal computers?

If both supply and demand decrease by the same amount, the equilibrium price

EBay

Suppose that the equilibrium price and quantity of new houses both increase.Which of the following could be a cause of this change?

-In the above figure, the shift in the supply curve from S to S₁ reflects

Which of the following increases the supply of gasoline?

-The figure above shows the market for iPods.Which of the following shifts the demand curve from D₀ to D₂?

The impact of an increase in the price of a particular good is illustrated as a

-Scooters and bicycles are substitutes.Suppose that the price of a bicycle falls.Which of the figures above best illustrates how this fall in price affects the demand curve for scooters?

The downward slope of a demand curve

-The figure above shows the market for iPods.Which of the following shifts the demand curve from D₀ to D₁?

The number of people looking to buy ceiling fan buyers increases, so there is an increase in the

-Which figure above shows the effect if research is published claiming that eating pizza is healthy?

-The above figure shows the market for laptops.Which of the following shifts the supply curve from S₀ to S₁?

-The graph illustrates the supply of sweaters.A fall in the price of sweaters brings

Personal computers are becoming less expensive as new technology reduces the cost of production.In a supply and demand model, explain the effects of the technological innovations and their effect on the quantity of computers.

Other things remaining the same, the quantity of a good or service demanded will increase if the price of the good or service

Getting Started

The Usand Global Economies

The Economic Problem

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

Exam 4: Demand and Supply

Which of the following does NOT increase the supply of personal computers, that is, does NOT shift the supply curve of personal computers?

If both supply and demand decrease by the same amount, the equilibrium price

EBay

Suppose that the equilibrium price and quantity of new houses both increase.Which of the following could be a cause of this change?

-In the above figure, the shift in the supply curve from S to S₁ reflects

Which of the following increases the supply of gasoline?

-The figure above shows the market for iPods.Which of the following shifts the demand curve from D₀ to D₂?

The impact of an increase in the price of a particular good is illustrated as a

-Scooters and bicycles are substitutes.Suppose that the price of a bicycle falls.Which of the figures above best illustrates how this fall in price affects the demand curve for scooters?

The downward slope of a demand curve

-The figure above shows the market for iPods.Which of the following shifts the demand curve from D₀ to D₁?

The number of people looking to buy ceiling fan buyers increases, so there is an increase in the

-Which figure above shows the effect if research is published claiming that eating pizza is healthy?

-The above figure shows the market for laptops.Which of the following shifts the supply curve from S₀ to S₁?

-The graph illustrates the supply of sweaters.A fall in the price of sweaters brings

Personal computers are becoming less expensive as new technology reduces the cost of production.In a supply and demand model, explain the effects of the technological innovations and their effect on the quantity of computers.

Other things remaining the same, the quantity of a good or service demanded will increase if the price of the good or service

Getting Started

The Usand Global Economies

The Economic Problem

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters