Question 1

What is the difference between a normal good and an inferior good. Give an example of each.

Accepted Answer

A good is a normal good if an increase i

Question 2

-The above figures show the market for HD televisions. If the price of the LCD screens used to produce these televisions falls, which figure shows the effect of this change in price?

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.

Question 3

The law of supply states that other things remaining the same, a decrease in the price of a kayak leads to

Accepted Answer

A) a decrease in the supply of kayaks. 
B) a decrease in the quantity of kayaks supplied. 
C) an increase in the supply of kayaks. 
D) an increase in the quantity of kayaks supplied. 
E) an increase in the supply of kayaks and a decrease in the quantity of kayaks supplied. 
A) a decrease in the supply of kayaks. 
B) a decrease in the quantity of kayaks supplied. 
C) an increase in the supply of kayaks. 
D) an increase in the quantity of kayaks supplied. 
E) an increase in the supply of kayaks and a decrease in the quantity of kayaks supplied.

Question 4

-The above figure shows the market for game day t-shirts. If the price of t-shirts is $8, then

Accepted Answer

A) the market is in equilibrium. 
B) there is a surplus and the price of t-shirts will rise. 
C) the quantity demanded is greater than quantity supplied. 
D) there is a shortage and the price of t-shirts will fall. 
E) there is a surplus and the price of t-shirts will fall. 
A) the market is in equilibrium. 
B) there is a surplus and the price of t-shirts will rise. 
C) the quantity demanded is greater than quantity supplied. 
D) there is a shortage and the price of t-shirts will fall. 
E) there is a surplus and the price of t-shirts will fall.

Question 5

$$\begin{array} { c c c } 
\text { Price } & \begin{array} { c } 
\text { Quantity supplied } \
\text { (manicures per day) }
\end{array} \
\text { (dollars per manicure) } & \text { Nancy's Nails } & \text { Fancy Nails } \
\hline 10 & 5 & 10 \
15 & 10 & 16 \
20 & 14 & 20 \
25 & 16 & 23 \
\hline
\end{array}$$
-The table above shows supply schedules for the two nail salons in town, Nancy's Nails and Fancy Nails. What is the market supply of manicures?

Accepted Answer

\[\begin{array} { c c } 
\begin{array} {

Question 6

If the price of tangerines increases, the price of oranges also rises because

Accepted Answer

A) consumers consider the two goods complements and so sellers decreased the supply of oranges. 
B) consumers consider the two goods substitutes and demand for oranges increases. 
C) if the supply of tangerines decreased, then the supply of oranges also must decrease. 
D) buyers must have expected a higher price for oranges and thus increased their demand for oranges. 
E) buyers' incomes must have decreased and oranges are an inferior good. 
A) consumers consider the two goods complements and so sellers decreased the supply of oranges. 
B) consumers consider the two goods substitutes and demand for oranges increases. 
C) if the supply of tangerines decreased, then the supply of oranges also must decrease. 
D) buyers must have expected a higher price for oranges and thus increased their demand for oranges. 
E) buyers' incomes must have decreased and oranges are an inferior good.

Question 7

When the demand curve shifts rightward and the market moves to a new equilibrium, then the

Accepted Answer

A) supply increases. 
B) supply decreases. 
C) quantity supplied increases. 
D) quantity supplied decreases. 
E) price falls to restore the equilibrium. 
A) supply increases. 
B) supply decreases. 
C) quantity supplied increases. 
D) quantity supplied decreases. 
E) price falls to restore the equilibrium.

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

If both the supply and demand curves shift simultaneously, we can always predict what will happen to

Accepted Answer

A) both the price and the quantity. 
B) either the price or the quantity, but not both. 
C) only the price. 
D) only the quantity. 
E) neither the price nor the quantity. 
A) both the price and the quantity. 
B) either the price or the quantity, but not both. 
C) only the price. 
D) only the quantity. 
E) neither the price nor the quantity.

Question 10

In the above figure, the shift in the supply curve from S to S₂ might reflect

Accepted Answer

A) a decrease in the cost of the tomato sauce used to produce pizza. 
B) a decrease in the number of pizza producers. 
C) an increase in the price of a pizza. 
D) an increase in income if pizza is a normal good. 
E) an increase in the price of a good that is a substitute for consumers. 
A) a decrease in the cost of the tomato sauce used to produce pizza. 
B) a decrease in the number of pizza producers. 
C) an increase in the price of a pizza. 
D) an increase in income if pizza is a normal good. 
E) an increase in the price of a good that is a substitute for consumers.

Question 11

Researchers have found a hybrid of corn that is cheaper to grow. This technological breakthrough

Accepted Answer

A) increases the demand for corn. 
B) increases the supply of corn. 
C) decreases the supply of corn. 
D) Both answers A and C are correct. 
E) Both answers A and B are correct. 
A) increases the demand for corn. 
B) increases the supply of corn. 
C) decreases the supply of corn. 
D) Both answers A and C are correct. 
E) Both answers A and B are correct.

Question 12

A market is defined as

Accepted Answer

A) a physical place where people buy only goods. 
B) a physical place where people buy both goods and services. 
C) a store where people buy physical goods. 
D) any arrangement that brings buyers and sellers together. 
E) a place where one good is bartered for another. 
A) a physical place where people buy only goods. 
B) a physical place where people buy both goods and services. 
C) a store where people buy physical goods. 
D) any arrangement that brings buyers and sellers together. 
E) a place where one good is bartered for another.

Question 13

A rise in the price of a substitute in production for a good leads to

Accepted Answer

A) an increase in the supply of that good. 
B) a decrease in the supply of that good. 
C) no change in the supply of that good; instead there is a change in the quantity supplied. 
D) a decrease in the quantity of that good supplied. 
E) no change in either the supply or the quantity supplied of the good. 
A) an increase in the supply of that good. 
B) a decrease in the supply of that good. 
C) no change in the supply of that good; instead there is a change in the quantity supplied. 
D) a decrease in the quantity of that good supplied. 
E) no change in either the supply or the quantity supplied of the good.

Question 14

-The above figure shows the market for game day t-shirts. If the price of t-shirts is $12, then

Accepted Answer

A) there is a shortage and the price of t-shirts will fall. 
B) there is a shortage and the price of t-shirts will rise. 
C) there is a surplus and the price of t-shirts will rise. 
D) there is a surplus and the price of t-shirts will fall. 
E) the market is in equilibrium. 
A) there is a shortage and the price of t-shirts will fall. 
B) there is a shortage and the price of t-shirts will rise. 
C) there is a surplus and the price of t-shirts will rise. 
D) there is a surplus and the price of t-shirts will fall. 
E) the market is in equilibrium.

Question 15

Suppose that the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward. Which of the following could have caused these shifts?

Accepted Answer

A) Desktop computers are a normal good and incomes increased, while more firms entered the market. 
B) The price of a laptop computer, a substitute for desktop computers, fell and the cost of producing desktop computers decreased. 
C) Consumers purchased more computers because of the Christmas season and the labor costs of producing desktop computers decreased. 
D) Desktop computers are a normal good and incomes increased, while the labor costs of producing personal computers increased. 
E) Desktop computers are a normal good and incomes decreased, while the labor costs of producing personal computers increased. 
A) Desktop computers are a normal good and incomes increased, while more firms entered the market. 
B) The price of a laptop computer, a substitute for desktop computers, fell and the cost of producing desktop computers decreased. 
C) Consumers purchased more computers because of the Christmas season and the labor costs of producing desktop computers decreased. 
D) Desktop computers are a normal good and incomes increased, while the labor costs of producing personal computers increased. 
E) Desktop computers are a normal good and incomes decreased, while the labor costs of producing personal computers increased.

Question 16

Assume a market is in equilibrium. There is an increase in supply, but no change in demand As a result the equilibrium price ________, and the equilibrium quantity ________.

Accepted Answer

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

Question 17

The market demand curve for mangos is

Accepted Answer

A) the same as the demand curve of one buyer in a market with many buyers. 
B) upward sloping because rich people can afford more mangos than poor people can buy. 
C) the horizontal sum of the individual demand curves of all the buyers. 
D) the vertical sum of the individual demand curves of all the buyers. 
E) the horizontal average of the individual demand curves of all the buyers. 
A) the same as the demand curve of one buyer in a market with many buyers. 
B) upward sloping because rich people can afford more mangos than poor people can buy. 
C) the horizontal sum of the individual demand curves of all the buyers. 
D) the vertical sum of the individual demand curves of all the buyers. 
E) the horizontal average of the individual demand curves of all the buyers.

Question 18

If the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward, then

Accepted Answer

A) the equilibrium quantity definitely increases. 
B) the equilibrium quantity definitely decreases. 
C) the equilibrium quantity definitely remains the same. 
D) More information is needed to determine the effect on the equilibrium quantity. 
E) the equilibrium price definitely falls. 
A) the equilibrium quantity definitely increases. 
B) the equilibrium quantity definitely decreases. 
C) the equilibrium quantity definitely remains the same. 
D) More information is needed to determine the effect on the equilibrium quantity. 
E) the equilibrium price definitely falls.

Question 19

The quantity supplied of a good, service, or resource is ________ during a specified period and at a specified price.

Accepted Answer

A) the amount that people are able to sell 
B) the amount that people are willing to sell 
C) the amount that people are able and willing to sell 
D) the amount that people are willing and able to buy 
E) the amount sold 
A) the amount that people are able to sell 
B) the amount that people are willing to sell 
C) the amount that people are able and willing to sell 
D) the amount that people are willing and able to buy 
E) the amount sold

Question 20

-The above figures show the market for HD televisions. If more firms start to produce HD televisions , 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.

What is the difference between a normal good and an inferior good. Give an example of each.

-The above figures show the market for HD televisions. If the price of the LCD screens used to produce these televisions falls, which figure shows the effect of this change in price?

The law of supply states that other things remaining the same, a decrease in the price of a kayak leads to

-The above figure shows the market for game day t-shirts. If the price of t-shirts is $8, then

Price Quantity supplied (manicures per day) (dollars per manicure) Nancy's Nails Fancy Nails 10 5 10 15 10 16 20 14 20 25 16 23 -The table above shows supply schedules for the two nail salons in town, Nancy's Nails and Fancy Nails. What is the market supply of manicures?

If the price of tangerines increases, the price of oranges also rises because

When the demand curve shifts rightward and the market moves to a new equilibrium, then the

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

If both the supply and demand curves shift simultaneously, we can always predict what will happen to

In the above figure, the shift in the supply curve from S to S₂ might reflect

Researchers have found a hybrid of corn that is cheaper to grow. This technological breakthrough

A market is defined as

A rise in the price of a substitute in production for a good leads to

-The above figure shows the market for game day t-shirts. If the price of t-shirts is $12, then

Suppose that the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward. Which of the following could have caused these shifts?

Assume a market is in equilibrium. There is an increase in supply, but no change in demand As a result the equilibrium price , and the equilibrium quantity .

The market demand curve for mangos is

If the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward, then

The quantity supplied of a good, service, or resource is ________ during a specified period and at a specified price.

-The above figures show the market for HD televisions. If more firms start to produce HD televisions , 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

What is the difference between a normal good and an inferior good. Give an example of each.

-The above figures show the market for HD televisions. If the price of the LCD screens used to produce these televisions falls, which figure shows the effect of this change in price?

The law of supply states that other things remaining the same, a decrease in the price of a kayak leads to

-The above figure shows the market for game day t-shirts. If the price of t-shirts is $8, then

Price Quantity supplied (manicures per day) (dollars per manicure) Nancy's Nails Fancy Nails 10 5 10 15 10 16 20 14 20 25 16 23 -The table above shows supply schedules for the two nail salons in town, Nancy's Nails and Fancy Nails. What is the market supply of manicures?

If the price of tangerines increases, the price of oranges also rises because

When the demand curve shifts rightward and the market moves to a new equilibrium, then the

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

If both the supply and demand curves shift simultaneously, we can always predict what will happen to

In the above figure, the shift in the supply curve from S to S₂ might reflect

Researchers have found a hybrid of corn that is cheaper to grow. This technological breakthrough

A market is defined as

A rise in the price of a substitute in production for a good leads to

-The above figure shows the market for game day t-shirts. If the price of t-shirts is $12, then

Suppose that the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward. Which of the following could have caused these shifts?

Assume a market is in equilibrium. There is an increase in supply, but no change in demand As a result the equilibrium price ________, and the equilibrium quantity ________.

The market demand curve for mangos is

If the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward, then

The quantity supplied of a good, service, or resource is ________ during a specified period and at a specified price.

-The above figures show the market for HD televisions. If more firms start to produce HD televisions , 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

Assume a market is in equilibrium. There is an increase in supply, but no change in demand As a result the equilibrium price , and the equilibrium quantity .