Question 1

Suppose there is a shortage in the market for athletic shoes.All things being equal, what change in price would help the shortage to be eliminated?

Accepted Answer

A)  if the price rises 
B)  if the price falls 
C)  if the price remains the same 
D)  if the price either rises or falls 
A)  if the price rises 
B)  if the price falls 
C)  if the price remains the same 
D)  if the price either rises or falls A

Question 2

Which of the following could shift the demand for a good to the right?

Accepted Answer

A)  a decrease in income, if the good is a normal good 
B)  an increase in the price of a complementary good 
C)  a decrease in the good's price, if the good is normal 
D)  an expectation of a future price increase 
A)  a decrease in income, if the good is a normal good 
B)  an increase in the price of a complementary good 
C)  a decrease in the good's price, if the good is normal 
D)  an expectation of a future price increase D

Question 3

Which of the following would be a result of an improvement in technology?

Accepted Answer

A)  a leftward shift in the demand curve 
B)  a rightward shift in the demand curve 
C)  a leftward shift in the supply curve 
D)  a rightward shift in the supply curve 
A)  a leftward shift in the demand curve 
B)  a rightward shift in the demand curve 
C)  a leftward shift in the supply curve 
D)  a rightward shift in the supply curve D

Question 4

Suppose good B is a complement to good A.What will a rise in the price of good B do to good A?

Accepted Answer

A)  It will increase the quantity demanded of A. 
B)  It will decrease the demand for A. 
C)  It will increase the demand for A. 
D)  It will decrease the quantity demanded of A. 
A)  It will increase the quantity demanded of A. 
B)  It will decrease the demand for A. 
C)  It will increase the demand for A. 
D)  It will decrease the quantity demanded of A.

Question 5

What does the income effect refer to?

Accepted Answer

A)  the effect of a change in income on the price of a good 
B)  the effect of a change in the general price level caused by a change in the price of another good 
C)  the effect of a change in the price of a good on real income 
D)  the effect of a change in the price of a substitute for the good under consideration 
A)  the effect of a change in income on the price of a good 
B)  the effect of a change in the general price level caused by a change in the price of another good 
C)  the effect of a change in the price of a good on real income 
D)  the effect of a change in the price of a substitute for the good under consideration

Question 6

Exhibit 4-6
 $$\begin{array} { r c c } 
\hline \text { Price } & \begin{array} { c } 
\text { Quantity } \
\text { demanded }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { supplied }
\end{array} \
\hline \$ 1.00 & 100 & 10 \
1.20 & 90 & 30 \
1.40 & 80 & 50 \
1.50 & 70 & 70 \
1.60 & 60 & 90 \
\hline
\end{array}$$
-Refer to the exhibit.Suppose the price of the good is $1.20.Is there a shortage or a surplus, and by what amount?

Accepted Answer

A)  a shortage, 30 units 
B)  a surplus, 30 units 
C)  a shortage, 60 units 
D)  a surplus, 60 units 
A)  a shortage, 30 units 
B)  a surplus, 30 units 
C)  a shortage, 60 units 
D)  a surplus, 60 units

Question 7

Which statement best characterizes the relationship between price and quantity supplied?

Accepted Answer

A)  There is an inverse relationship. 
B)  More is supplied at lower prices. 
C)  Producers work harder and sell more when the price decreases. 
D)  There is a direct relationship. 
A)  There is an inverse relationship. 
B)  More is supplied at lower prices. 
C)  Producers work harder and sell more when the price decreases. 
D)  There is a direct relationship.

Question 8

Exhibit 4-11
  
-Refer to the exhibit.In a rental market like the one in the exhibit, suppose the government sets a rent ceiling at $750 per month.What will be the result of imposing this rent ceiling?

Accepted Answer

A)  an increase in supply 
B)  a shortage 
C)  a price floor 
D)  a surplus 
A)  an increase in supply 
B)  a shortage 
C)  a price floor 
D)  a surplus

Question 9

Which of the following would be most likely to increase the demand for downtown parking in a large city?

Accepted Answer

A)  improved bus service to the downtown area 
B)  lower downtown parking fees 
C)  more downtown parking lots 
D)  more freeways leading to the downtown area 
A)  improved bus service to the downtown area 
B)  lower downtown parking fees 
C)  more downtown parking lots 
D)  more freeways leading to the downtown area

Question 10

Exhibit 4-10
  
-Refer to the exhibit.Which of the following will be caused by the discovery that breast milk offers greater health protection to babies than baby formula?

Accepted Answer

A)  a supply shift from S₂ to S₁ 
B)  a supply shift from S₁ to S₂ 
C)  a movement from c to d on supply curve S₂ 
D)  a movement from d to c on supply curve S₂ 
A)  a supply shift from S₂ to S₁ 
B)  a supply shift from S₁ to S₂ 
C)  a movement from c to d on supply curve S₂ 
D)  a movement from d to c on supply curve S₂

Question 11

Which of the following will occur due to a shortage of textbooks?

Accepted Answer

A)  a decrease in the supply of textbooks 
B)  a decrease in the demand for textbooks 
C)  a decrease in the price of textbooks 
D)  an increase in the price of textbooks 
A)  a decrease in the supply of textbooks 
B)  a decrease in the demand for textbooks 
C)  a decrease in the price of textbooks 
D)  an increase in the price of textbooks

Question 12

Why will larger quantities of any good be supplied at higher prices?

Accepted Answer

A)  because consumers will be more satisfied 
B)  because higher prices attract resources from other uses 
C)  because people are naturally lazy and have to be bribed to give up their leisure 
D)  because price and quantity supplied are inversely related 
A)  because consumers will be more satisfied 
B)  because higher prices attract resources from other uses 
C)  because people are naturally lazy and have to be bribed to give up their leisure 
D)  because price and quantity supplied are inversely related

Question 13

Which of the following would shift the supply curve for a good to the left?

Accepted Answer

A)  a decrease in the price of an alternative good 
B)  an improvement in technology for producing that good 
C)  an increase in the cost of an important resource used to make that good 
D)  an increase in the number of producers 
A)  a decrease in the price of an alternative good 
B)  an improvement in technology for producing that good 
C)  an increase in the cost of an important resource used to make that good 
D)  an increase in the number of producers

Question 14

If we say that demand has increased, what change regarding the demand curve has taken place?

Accepted Answer

A)  a leftward movement along the demand curve 
B)  a rightward movement along the demand curve 
C)  a leftward shift of the demand curve 
D)  a rightward shift of the demand curve 
A)  a leftward movement along the demand curve 
B)  a rightward movement along the demand curve 
C)  a leftward shift of the demand curve 
D)  a rightward shift of the demand curve

Question 15

Suppose butter is a substitute good for margarine.And suppose the price of butter increases.Which of the following is most likely to occur?

Accepted Answer

A)  a rightward shift of the demand curve for margarine 
B)  a leftward shift of the demand curve for margarine 
C)  an increase in the quantity of margarine demanded 
D)  a decrease in the quantity of margarine demanded 
A)  a rightward shift of the demand curve for margarine 
B)  a leftward shift of the demand curve for margarine 
C)  an increase in the quantity of margarine demanded 
D)  a decrease in the quantity of margarine demanded

Question 16

Suppose a market is in equilibrium and then a price ceiling is established below the equilibrium price.Which of the following best describes what will happen in this market?

Accepted Answer

A)  Quantity demanded will decrease. 
B)  A surplus will develop. 
C)  A shortage will develop. 
D)  The market will remain in equilibrium. 
A)  Quantity demanded will decrease. 
B)  A surplus will develop. 
C)  A shortage will develop. 
D)  The market will remain in equilibrium.

Question 17

Recently was been discovered that farm-raised lobsters can feed on algae, which would lower the cost of feeding the lobsters.Which of the following would be a result of this discovery?

Accepted Answer

A)  a leftward shift in the supply curve for lobster 
B)  a rightward shift in the supply curve for lobster 
C)  an increase in the quantity of lobsters supplied 
D)  a decrease in the quantity of lobsters supplied 
A)  a leftward shift in the supply curve for lobster 
B)  a rightward shift in the supply curve for lobster 
C)  an increase in the quantity of lobsters supplied 
D)  a decrease in the quantity of lobsters supplied

Question 18

Attempts are being made to use agricultural produce, such as potatoes, to create a biodegradable plastic.If these attempts are successful, what will happen to the equilibrium price and quantity of potatoes?

Accepted Answer

A)  Price will increase and quantity will decrease. 
B)  Price will increase and quantity will increase. 
C)  Price will decrease and quantity will increase. 
D)  Price will decrease and quantity will decrease. 
A)  Price will increase and quantity will decrease. 
B)  Price will increase and quantity will increase. 
C)  Price will decrease and quantity will increase. 
D)  Price will decrease and quantity will decrease.

Question 19

Exhibit 4-4
  
-Refer to the supply curve in the exhibit.Suppose the price increases from P to P'.What will happen to the quantity supplied?

Accepted Answer

A)  It will increase. 
B)  It will stay the same. 
C)  It will drop to zero. 
D)  It will decrease. 
A)  It will increase. 
B)  It will stay the same. 
C)  It will drop to zero. 
D)  It will decrease.

Question 20

Which statement best explains the substitution effect of a price change?

Accepted Answer

A)  It is caused by a change in relative prices. 
B)  It affects the consumer's ability, rather than willingness, to purchase a good. 
C)  It assumes that the consumer substitutes more expensive goods for cheaper ones when income increases. 
D)  It may cause the consumer to buy less of the good when its price falls. 
A)  It is caused by a change in relative prices. 
B)  It affects the consumer's ability, rather than willingness, to purchase a good. 
C)  It assumes that the consumer substitutes more expensive goods for cheaper ones when income increases. 
D)  It may cause the consumer to buy less of the good when its price falls.

Suppose there is a shortage in the market for athletic shoes.All things being equal, what change in price would help the shortage to be eliminated?

Which of the following could shift the demand for a good to the right?

Which of the following would be a result of an improvement in technology?

Suppose good B is a complement to good A.What will a rise in the price of good B do to good A?

What does the income effect refer to?

Exhibit 4-6 Price Quantity demanded Quantity supplied \ 1.00 100 10 1.20 90 30 1.40 80 50 1.50 70 70 1.60 60 90 -Refer to the exhibit.Suppose the price of the good is $1.20.Is there a shortage or a surplus, and by what amount?

Which statement best characterizes the relationship between price and quantity supplied?

Exhibit 4-11 -Refer to the exhibit.In a rental market like the one in the exhibit, suppose the government sets a rent ceiling at $750 per month.What will be the result of imposing this rent ceiling?

Which of the following would be most likely to increase the demand for downtown parking in a large city?

Exhibit 4-10 -Refer to the exhibit.Which of the following will be caused by the discovery that breast milk offers greater health protection to babies than baby formula?

Which of the following will occur due to a shortage of textbooks?

Why will larger quantities of any good be supplied at higher prices?

Which of the following would shift the supply curve for a good to the left?

If we say that demand has increased, what change regarding the demand curve has taken place?

Suppose butter is a substitute good for margarine.And suppose the price of butter increases.Which of the following is most likely to occur?

Suppose a market is in equilibrium and then a price ceiling is established below the equilibrium price.Which of the following best describes what will happen in this market?

Recently was been discovered that farm-raised lobsters can feed on algae, which would lower the cost of feeding the lobsters.Which of the following would be a result of this discovery?

Attempts are being made to use agricultural produce, such as potatoes, to create a biodegradable plastic.If these attempts are successful, what will happen to the equilibrium price and quantity of potatoes?

Exhibit 4-4 -Refer to the supply curve in the exhibit.Suppose the price increases from P to P'.What will happen to the quantity supplied?

Which statement best explains the substitution effect of a price change?

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Algebraic Approach to Demand, Supply, and Equilibrium

Introduction to Macroeconomics

Tracking the Canadian Economy

Unemployment and Inflation

Productivity and Growth

Aggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy in an Open Economy

Macro Policy Debate: Active or Passive

International Finance

International Trade

Economic Development

Understanding Graphs

Filters

Exam 4: Demand, Supply, and Markets

Suppose there is a shortage in the market for athletic shoes.All things being equal, what change in price would help the shortage to be eliminated?

Which of the following could shift the demand for a good to the right?

Which of the following would be a result of an improvement in technology?

Suppose good B is a complement to good A.What will a rise in the price of good B do to good A?

What does the income effect refer to?

Exhibit 4-6 Price Quantity demanded Quantity supplied \ 1.00 100 10 1.20 90 30 1.40 80 50 1.50 70 70 1.60 60 90 -Refer to the exhibit.Suppose the price of the good is $1.20.Is there a shortage or a surplus, and by what amount?

Which statement best characterizes the relationship between price and quantity supplied?

Exhibit 4-11 -Refer to the exhibit.In a rental market like the one in the exhibit, suppose the government sets a rent ceiling at $750 per month.What will be the result of imposing this rent ceiling?

Which of the following would be most likely to increase the demand for downtown parking in a large city?

Exhibit 4-10 -Refer to the exhibit.Which of the following will be caused by the discovery that breast milk offers greater health protection to babies than baby formula?

Which of the following will occur due to a shortage of textbooks?

Why will larger quantities of any good be supplied at higher prices?

Which of the following would shift the supply curve for a good to the left?

If we say that demand has increased, what change regarding the demand curve has taken place?

Suppose butter is a substitute good for margarine.And suppose the price of butter increases.Which of the following is most likely to occur?

Suppose a market is in equilibrium and then a price ceiling is established below the equilibrium price.Which of the following best describes what will happen in this market?

Recently was been discovered that farm-raised lobsters can feed on algae, which would lower the cost of feeding the lobsters.Which of the following would be a result of this discovery?

Attempts are being made to use agricultural produce, such as potatoes, to create a biodegradable plastic.If these attempts are successful, what will happen to the equilibrium price and quantity of potatoes?

Exhibit 4-4 -Refer to the supply curve in the exhibit.Suppose the price increases from P to P'.What will happen to the quantity supplied?

Which statement best explains the substitution effect of a price change?

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Algebraic Approach to Demand, Supply, and Equilibrium

Introduction to Macroeconomics

Tracking the Canadian Economy

Unemployment and Inflation

Productivity and Growth

Aggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy in an Open Economy

Macro Policy Debate: Active or Passive

International Finance

International Trade

Economic Development

Understanding Graphs

Filters