Question 1

Peanut butter and jelly are complements for many consumers. Consider the market for peanut butter. If there is an increase in the price of jelly,

Accepted Answer

A) there is a movement along the supply curve of peanut butter. 
B) the price of peanut butter rises. 
C) the quantity of peanut butter increases. 
D) there is a shift in the supply curve for jelly. 
E) the demand curve for peanut butter does not shift; instead there is a movement along it. 
A) there is a movement along the supply curve of peanut butter. 
B) the price of peanut butter rises. 
C) the quantity of peanut butter increases. 
D) there is a shift in the supply curve for jelly. 
E) the demand curve for peanut butter does not shift; instead there is a movement along it.

Question 2

Computer chips are a normal good. Suppose the economy slips into a recession so that income falls. As a result, the demand for computer chips ________ so that the price of a computer chip ________.

Accepted Answer

A) increases; rises 
B) increases; falls 
C) decreases; rises 
D) decreases; falls 
E) decreases; does not change 
A) increases; rises 
B) increases; falls 
C) decreases; rises 
D) decreases; falls 
E) decreases; does not change

Question 3

-The number of logging firms increases. Which of the figures above best illustrates this change?

Accepted Answer

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

Question 4

-The graph illustrates the market for bottled water. When the price exceeds the equilibrium price, the quantity demanded is ________ the quantity supplied and the price of the good will ________.

Accepted Answer

A) less then; fall 
B) greater than; rise 
C) greater than; fall 
D) less than; rise 
E) equal to; fall 
A) less then; fall 
B) greater than; rise 
C) greater than; fall 
D) less than; rise 
E) equal to; fall

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

Kiwis and strawberries are substitutes for consumers. An increase in the price of a kiwi coupled with an increase in the number of strawberry growers ________ the equilibrium price of a pound of strawberries and ________ the equilibrium quantity of strawberries.

Accepted Answer

A) raises; increases 
B) probably changes, but more information is needed to determine if it rises or falls; increases 
C) raises; probably changes, but more information is needed to determine if it increases or decreases 
D) lowers; probably changes, but more information is needed to determine if it increases or decreases 
E) lowers; increases 
A) raises; increases 
B) probably changes, but more information is needed to determine if it rises or falls; increases 
C) raises; probably changes, but more information is needed to determine if it increases or decreases 
D) lowers; probably changes, but more information is needed to determine if it increases or decreases 
E) lowers; increases

Question 7

-In the above figure, the shift in the demand curve from D to D₂ can be the result of

Accepted Answer

A) an increase in income if pizza is a normal good. 
B) an increase in the price of a sub sandwich, a substitute for pizza. 
C) an increase in the price of soda, a complement to pizza. 
D) a change in quantity demanded. 
E) a decrease in the supply of pizza that raises the price of pizza. 
A) an increase in income if pizza is a normal good. 
B) an increase in the price of a sub sandwich, a substitute for pizza. 
C) an increase in the price of soda, a complement to pizza. 
D) a change in quantity demanded. 
E) a decrease in the supply of pizza that raises the price of pizza.

Question 8

Consider the market for wheat. If there is an improvement in harvesting technology,

Accepted Answer

A) the supply curve for wheat shifts rightward. 
B) the demand curve for wheat shifts rightward. 
C) there is a movement up along the demand curve. 
D) the equilibrium price rises. 
E) the demand curve for wheat shifts leftward. 
A) the supply curve for wheat shifts rightward. 
B) the demand curve for wheat shifts rightward. 
C) there is a movement up along the demand curve. 
D) the equilibrium price rises. 
E) the demand curve for wheat shifts leftward.

Question 9

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Quantity demanded } \
\text { (tons of cat food per year) }
\end{array} & \begin{array} { c } 
\text { Price } \
\text { (dollars per pound of cat } \
\text { food) }
\end{array} & \begin{array} { c } 
\text { Quantity supplied } \
\text { (tons of cat food per year) }
\end{array} \
\hline 52 & 1.00 & 15 \
46 & 1.50 & 26 \
43 & 2.00 & 34 \
40 & 2.50 & 40 \
35 & 3.00 & 44 \
\hline
\end{array}$$
-The above table gives the demand and supply schedules for cat food. If the price is $3.00 per pound of cat food, will there be a shortage, a surplus, or is this price the equilibrium price?
 If there is a shortage, how much is the shortage?
 If there is a surplus, how much is the surplus?
 If $3.00 is the equilibrium price, what is the equilibrium quantity?

Accepted Answer

At a price of $3.00 per pound

Question 10

Consider the market for peanut butter. If there is an increase in the price of peanuts,

Accepted Answer

A) there is an upward movement along the supply curve for peanut butter. 
B) the supply curve for peanuts shifts rightward. 
C) there is a decrease in the supply of peanuts. 
D) there is a decrease in the supply of peanut butter. 
E) there is a decrease in the demand for peanut butter. 
A) there is an upward movement along the supply curve for peanut butter. 
B) the supply curve for peanuts shifts rightward. 
C) there is a decrease in the supply of peanuts. 
D) there is a decrease in the supply of peanut butter. 
E) there is a decrease in the demand for peanut butter.

Question 11

Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers. The equilibrium quantity of beef will

Accepted Answer

A) decrease. 
B) perhaps increase, decrease, or stay the same, but more information is needed to determine which it does. 
C) stay the same. 
D) increase. 
E) definitely either stay the same or decrease. 
A) decrease. 
B) perhaps increase, decrease, or stay the same, but more information is needed to determine which it does. 
C) stay the same. 
D) increase. 
E) definitely either stay the same or decrease.

Question 12

The law of supply reflects the fact that

Accepted Answer

A) people buy more of a good when its price falls. 
B) suppliers have an incentive to use their resources in the way that brings the biggest return. 
C) higher prices are more attractive to consumers because they signal a higher quality product. 
D) businesses can sell more goods at lower prices. 
E) the demand curve is downward sloping. 
A) people buy more of a good when its price falls. 
B) suppliers have an incentive to use their resources in the way that brings the biggest return. 
C) higher prices are more attractive to consumers because they signal a higher quality product. 
D) businesses can sell more goods at lower prices. 
E) the demand curve is downward sloping.

Question 13

A change in the price of a good ________ its supply curve and ________ a movement along its supply curve.

Accepted Answer

A) shifts; causes 
B) shifts; does not cause 
C) does not shift; causes 
D) does not shift; does not cause 
E) None of the above because the change in the price might cause either a shift in the supply curve or a movement along the supply curve depending on the size of the change. 
A) shifts; causes 
B) shifts; does not cause 
C) does not shift; causes 
D) does not shift; does not cause 
E) None of the above because the change in the price might cause either a shift in the supply curve or a movement along the supply curve depending on the size of the change.

Question 14

-The table above indicates how many thousands of containers of ice cream three different companies are willing to produce at different prices. Does this information reflect the law of supply?
 Why or why not?

Accepted Answer

Yes, the information in the ta

Question 15

Which of the following is the best explanation for why the price of gasoline increases during the summer months?

Accepted Answer

A) Oil producers have higher costs of production in the summer. 
B) Sellers have to earn profits during the summer to cover losses in the winter. 
C) There is increased driving by families going on vacation. 
D) There is less competition among oil refineries in the summer. 
E) The number of gas stations open 24 hours a day rises in the summer months and so the price must rise to cover the higher costs. 
A) Oil producers have higher costs of production in the summer. 
B) Sellers have to earn profits during the summer to cover losses in the winter. 
C) There is increased driving by families going on vacation. 
D) There is less competition among oil refineries in the summer. 
E) The number of gas stations open 24 hours a day rises in the summer months and so the price must rise to cover the higher costs.

Question 16

Which of the following brings only an increase in the quantity demanded of a good?

Accepted Answer

A) a decrease in income, assuming the good is an inferior good 
B) a rise in the price of a substitute good 
C) a fall in the price of the good itself 
D) an expectation that the good's price will rise in the future 
E) a decrease in income, assuming the good is a normal good 
A) a decrease in income, assuming the good is an inferior good 
B) a rise in the price of a substitute good 
C) a fall in the price of the good itself 
D) an expectation that the good's price will rise in the future 
E) a decrease in income, assuming the good is a normal good

Question 17

Which of the following shifts the demand curve for movies rightward?

Accepted Answer

A) an increase in the price of NetFlix, a substitute for movies. 
B) an increase in the price of movie tickets. 
C) a decrease in the price of move tickets. 
D) an increase in movie star salaries. 
E) an increase in the price of HDTV sets. 
A) an increase in the price of NetFlix, a substitute for movies. 
B) an increase in the price of movie tickets. 
C) a decrease in the price of move tickets. 
D) an increase in movie star salaries. 
E) an increase in the price of HDTV sets.

Question 18

Suppose that the price of lettuce used to produce tacos increases. This change means that the equilibrium price of a taco ________ and the equilibrium quantity ________.

Accepted Answer

A) rises; increases 
B) rises; decreases 
C) falls; increases 
D) falls; decreases 
E) does not change; decreases 
A) rises; increases 
B) rises; decreases 
C) falls; increases 
D) falls; decreases 
E) does not change; decreases

Question 19

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Price } \
\text { (dollars per gallon) }
\end{array} & \begin{array} { c } 
\text { Quantity demanded } \
\text { (gallons of gasoline) }
\end{array} & \begin{array} { c } 
\text { Quantity supplied } \
\text { (gallons of gasoline) }
\end{array} \
\hline 3.73 & 337,982 & 441,074 \
3.68 & 396,398 & 428,008 \
3.65 & 412,031 & 412,031 \
3.62 & 417,899 & 391,665 \
\hline
\end{array}$$
-The table above shows the situation in the gasoline market in Tulsa, Oklahoma. If the price of a gallon of gasoline is $3.62, 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 20

-The above figures show the market for HD televisions. If cable television providers lower the price of providing HD cable service, which figure shows the effect of this change ?

Accepted Answer

A) Figure A 
B) Figure B 
C) Figure C 
D) Figure D 
E) None of the figures represent this change. 
A) Figure A 
B) Figure B 
C) Figure C 
D) Figure D 
E) None of the figures represent this change.

Peanut butter and jelly are complements for many consumers. Consider the market for peanut butter. If there is an increase in the price of jelly,

Computer chips are a normal good. Suppose the economy slips into a recession so that income falls. As a result, the demand for computer chips so that the price of a computer chip .

-The number of logging firms increases. Which of the figures above best illustrates this change?

-The graph illustrates the market for bottled water. When the price exceeds the equilibrium price, the quantity demanded is the quantity supplied and the price of the good will .

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

Kiwis and strawberries are substitutes for consumers. An increase in the price of a kiwi coupled with an increase in the number of strawberry growers the equilibrium price of a pound of strawberries and the equilibrium quantity of strawberries.

-In the above figure, the shift in the demand curve from D to D₂ can be the result of

Consider the market for wheat. If there is an improvement in harvesting technology,

Consider the market for peanut butter. If there is an increase in the price of peanuts,

Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers. The equilibrium quantity of beef will

The law of supply reflects the fact that

A change in the price of a good its supply curve and a movement along its supply curve.

-The table above indicates how many thousands of containers of ice cream three different companies are willing to produce at different prices. Does this information reflect the law of supply? Why or why not?

Which of the following is the best explanation for why the price of gasoline increases during the summer months?

Which of the following brings only an increase in the quantity demanded of a good?

Which of the following shifts the demand curve for movies rightward?

Suppose that the price of lettuce used to produce tacos increases. This change means that the equilibrium price of a taco and the equilibrium quantity .

-The above figures show the market for HD televisions. If cable television providers lower the price of providing HD cable service, which figure shows the effect of this change ?

Getting Started

The Us and Global Economies

The Economic Problem

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 4: Demand and Supply

Peanut butter and jelly are complements for many consumers. Consider the market for peanut butter. If there is an increase in the price of jelly,

Computer chips are a normal good. Suppose the economy slips into a recession so that income falls. As a result, the demand for computer chips ________ so that the price of a computer chip ________.

-The number of logging firms increases. Which of the figures above best illustrates this change?

-The graph illustrates the market for bottled water. When the price exceeds the equilibrium price, the quantity demanded is ________ the quantity supplied and the price of the good will ________.

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

Kiwis and strawberries are substitutes for consumers. An increase in the price of a kiwi coupled with an increase in the number of strawberry growers ________ the equilibrium price of a pound of strawberries and ________ the equilibrium quantity of strawberries.

-In the above figure, the shift in the demand curve from D to D₂ can be the result of

Consider the market for wheat. If there is an improvement in harvesting technology,

Consider the market for peanut butter. If there is an increase in the price of peanuts,

Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers. The equilibrium quantity of beef will

The law of supply reflects the fact that

A change in the price of a good ________ its supply curve and ________ a movement along its supply curve.

-The table above indicates how many thousands of containers of ice cream three different companies are willing to produce at different prices. Does this information reflect the law of supply? Why or why not?

Which of the following is the best explanation for why the price of gasoline increases during the summer months?

Which of the following brings only an increase in the quantity demanded of a good?

Which of the following shifts the demand curve for movies rightward?

Suppose that the price of lettuce used to produce tacos increases. This change means that the equilibrium price of a taco ________ and the equilibrium quantity ________.

-The above figures show the market for HD televisions. If cable television providers lower the price of providing HD cable service, which figure shows the effect of this change ?

Getting Started

The Us and Global Economies

The Economic Problem

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Computer chips are a normal good. Suppose the economy slips into a recession so that income falls. As a result, the demand for computer chips so that the price of a computer chip .

-The graph illustrates the market for bottled water. When the price exceeds the equilibrium price, the quantity demanded is the quantity supplied and the price of the good will .

Kiwis and strawberries are substitutes for consumers. An increase in the price of a kiwi coupled with an increase in the number of strawberry growers the equilibrium price of a pound of strawberries and the equilibrium quantity of strawberries.

A change in the price of a good its supply curve and a movement along its supply curve.

Suppose that the price of lettuce used to produce tacos increases. This change means that the equilibrium price of a taco and the equilibrium quantity .