Question 1

Suppose that the technology used to produce computers advances.How does this change affect the supply of computers and the supply curve of computers?

Accepted Answer

An advance in technology incre

Question 2

For "an increase in the quantity demanded" but not "an increase in demand" to occur,there must be a

Accepted Answer

A)  rightward shift of the demand curve. 
B)  movement along the demand curve. 
C)  rightward shift of the demand curve and a movement along the demand curve. 
D)  Both answers B and C are correct. 
A)  rightward shift of the demand curve. 
B)  movement along the demand curve. 
C)  rightward shift of the demand curve and a movement along the demand curve. 
D)  Both answers B and C are correct.

Question 3

A decrease in the quantity supplied is represented by a

Accepted Answer

A)  movement down the supply curve. 
B)  movement up the supply curve. 
C)  rightward shift in the supply curve. 
D)  leftward shift in the supply curve. 
A)  movement down the supply curve. 
B)  movement up the supply curve. 
C)  rightward shift in the supply curve. 
D)  leftward shift in the supply curve.

Question 4

A shortage causes the

Accepted Answer

A)  demand curve to shift leftward. 
B)  supply curve to shift rightward. 
C)  price to fall. 
D)  price to rise. 
A)  demand curve to shift leftward. 
B)  supply curve to shift rightward. 
C)  price to fall. 
D)  price to rise.

Question 5

What is the difference between a money price and a relative price?
When the demand and supply model predicts that the price of coffee will rise,is the model predicting that the money price rises or the relative price rises?

Accepted Answer

The money price of a good is the number

Question 6

If both demand and supply increase,what will be the effect on the equilibrium price and quantity?

Accepted Answer

A)  Both the price and the quantity will increase. 
B)  The quantity will increase but the price could either rise, fall, or remain the same. 
C)  The price will fall but the quantity will increase. 
D)  The price will rise but the quantity could either increase, decrease, or remain the same. 
A)  Both the price and the quantity will increase. 
B)  The quantity will increase but the price could either rise, fall, or remain the same. 
C)  The price will fall but the quantity will increase. 
D)  The price will rise but the quantity could either increase, decrease, or remain the same.

Question 7

$$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Price } \
\text { (dollars } \
\text { per ride) }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { demanded } \
\text { (rides per day) }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { supplied } \
\text { (rides per day) }
\end{array} \
\hline 2 & 100 & 40 \
\hline 4 & 90 & 50 \
\hline 6 & 80 & 60 \
\hline 8 & 70 & 70 \
\hline 10 & 60 & 80 \
\hline 12 & 50 & 90 \
\hline
\end{array}$$
-The table gives the demand and supply schedules for boat rides.If the supply of boat rides increases by 20 rides a day,the price will ________.

Accepted Answer

A)  remain unchanged 
B)  fall to $6 a ride 
C)  rise to $6 a ride 
D)  rise to $10 a ride 
A)  remain unchanged 
B)  fall to $6 a ride 
C)  rise to $6 a ride 
D)  rise to $10 a ride

Question 8

What will happen to the equilibrium price and quantity of coffee if it is discovered to help prevent colds and,at the same time,Brazil and Vietnam emerge in the global market as massive producers of coffee?

Accepted Answer

A)  The price will fall and the effect on the quantity is uncertain. 
B)  The quantity will increase and the effect on the price is uncertain. 
C)  The quantity will decrease and the price will rise. 
D)  The quantity will increase and the price will remain unchanged. 
A)  The price will fall and the effect on the quantity is uncertain. 
B)  The quantity will increase and the effect on the price is uncertain. 
C)  The quantity will decrease and the price will rise. 
D)  The quantity will increase and the price will remain unchanged.

Question 9

There is a technological advance in the production of a good and simultaneously also an increase in the expected future price.Which of the following will happen?

Accepted Answer

A)  The equilibrium price will rise because the supply curve shifts rightward. 
B)  The equilibrium price falls because the supply curve shifts leftward. 
C)  The technological improvement shifts the supply curve rightward while the increase in the expected future price shifts the supply curve leftward. The net effect is not known. 
D)  The demand curve shifts rightward and the supply curve does not shift. 
A)  The equilibrium price will rise because the supply curve shifts rightward. 
B)  The equilibrium price falls because the supply curve shifts leftward. 
C)  The technological improvement shifts the supply curve rightward while the increase in the expected future price shifts the supply curve leftward. The net effect is not known. 
D)  The demand curve shifts rightward and the supply curve does not shift.

Question 10

If the price of aluminum used to make bicycles increases,the price of a bicycle rises because of a

Accepted Answer

A)  rightward shift of the demand curve for bicycles. 
B)  rightward shift of the supply curve of bicycles. 
C)  leftward shift of the demand curve for bicycles. 
D)  leftward shift of the supply curve of bicycles. 
A)  rightward shift of the demand curve for bicycles. 
B)  rightward shift of the supply curve of bicycles. 
C)  leftward shift of the demand curve for bicycles. 
D)  leftward shift of the supply curve of bicycles.

Question 11

The quantity of CDs that firms plan to sell this month depends on all of the following except the

Accepted Answer

A)  number of producers of CDs. 
B)  quantity of CDs that people plan to buy. 
C)  wage rate of workers who produce CDs. 
D)  price of a CD. 
A)  number of producers of CDs. 
B)  quantity of CDs that people plan to buy. 
C)  wage rate of workers who produce CDs. 
D)  price of a CD.

Question 12

General Electric (GE) produces wind turbines that generate wind power.Over the past 10 years,the advances in technology used to produce wind turbines has resulted in

Accepted Answer

A)  a movement up along the supply curve for wind-generated power. 
B)  a rightward shift in the supply curve for wind-generated power. 
C)  a decrease in the supply of wind-generated power. 
D)  GE increasing the quantity supplied of wind turbines. 
A)  a movement up along the supply curve for wind-generated power. 
B)  a rightward shift in the supply curve for wind-generated power. 
C)  a decrease in the supply of wind-generated power. 
D)  GE increasing the quantity supplied of wind turbines.

Question 13

$$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Price } \
\text { (dollars per disk) }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { demanded } \
\text { (millions of disks } \
\text { per month) }
\end{array} & \begin{array} { c } 
\text { Quantity supplied } \
\text { (millions of disks } \
\text { per month) }
\end{array} \
\hline 0.50 & 50 & 0 \
\hline 1.00 & 40 & 15 \
\hline 1.50 & 30 & 30 \
\hline 2.00 & 20 & 45 \
\hline 2.50 & 10 & 60 \
\hline 3.00 & 0 & 75 \
\hline
\end{array}$$
-Suppose the market for CD-Rs has the demand and supply schedules shown in the table above.What is the equilibrium price and the equilibrium quantity in this market?
Suppose the current price is $2.00.What is the quantity of CD-Rs sold?
Explain.Is there a shortage or a surplus?
How big is it?
Explain.

Accepted Answer

The equilibrium price is $1.50.The equil

Question 14

All shredded wheat producers have decided to add a new ingredient to shredded wheat,the "crunch enhancer." Crunch enhancer keeps cereals crisper longer in milk and,as a result,consumers decide they like shredded wheat more than before.What happens to the supply and demand curves for shredded wheat now that is costs more to produce and consumers like it better?

Accepted Answer

A)  The supply and demand curves both shift rightward. 
B)  The supply curve shifts rightward and the demand curve doesn't shift. 
C)  The supply curve shifts leftward and the demand curve shifts rightward. 
D)  The supply curve shifts leftward and the demand curve doesn't shift. 
A)  The supply and demand curves both shift rightward. 
B)  The supply curve shifts rightward and the demand curve doesn't shift. 
C)  The supply curve shifts leftward and the demand curve shifts rightward. 
D)  The supply curve shifts leftward and the demand curve doesn't shift.

Question 15

During the past twenty years,the prices of prescription drugs,relative to the prices of other goods,have risen,yet Americans buy more prescription drugs than ever.This might be because

Accepted Answer

A)  with higher incomes and more older Americans, we have moved rightward along our demand curve for drugs. 
B)  with higher incomes and more older Americans, the demand curve for prescription drugs has shifted rightward. 
C)  more new firms entered the pharmaceutical industry each year, which caused a rightward shift in the supply curve of prescription drugs. 
D)  Both answers A and C are correct. 
A)  with higher incomes and more older Americans, we have moved rightward along our demand curve for drugs. 
B)  with higher incomes and more older Americans, the demand curve for prescription drugs has shifted rightward. 
C)  more new firms entered the pharmaceutical industry each year, which caused a rightward shift in the supply curve of prescription drugs. 
D)  Both answers A and C are correct.

Question 16

The quantity supplied of a good is

Accepted Answer

A)  the same thing as the quantity demanded at each price. 
B)  the amount that the producers are planning to sell at a particular price during a given time period. 
C)  equal to the difference between the quantity available and the quantity desired by all consumers and producers. 
D)  the amount the firm would sell if it faced no resource constraints. 
A)  the same thing as the quantity demanded at each price. 
B)  the amount that the producers are planning to sell at a particular price during a given time period. 
C)  equal to the difference between the quantity available and the quantity desired by all consumers and producers. 
D)  the amount the firm would sell if it faced no resource constraints.

Question 17

A relative price is the

Accepted Answer

A)  slope of the demand curve. 
B)  difference between one money price and another. 
C)  slope of the supply curve. 
D)  ratio of one money price to another. 
A)  slope of the demand curve. 
B)  difference between one money price and another. 
C)  slope of the supply curve. 
D)  ratio of one money price to another.

Question 18

-The figure above shows the market for airline tickets. If airline tickets are a normal good,then the recession in 2008 that caused people's incomes to decrease lead to a shift from

Accepted Answer

A)  D₀ to D₁. 
B)  D₁ to D₀. 
C)  S₀ to S₁. 
D)  S₁ to S₀. 
A)  D₀ to D₁. 
B)  D₁ to D₀. 
C)  S₀ to S₁. 
D)  S₁ to S₀.

Question 19

All grapefruit juice producers have decided to blend tangerine juice with the grapefruit juice.This blend results in a higher cost of production,but studies show that consumers prefer the taste of the blend to straight grapefruit juice.What will happen to the equilibrium price and quantity of the new "blended" grapefruit juice now that it costs more to produce but consumers like it better?

Accepted Answer

A)  The price rises and the quantity increases. 
B)  The price falls and the quantity increases. 
C)  The effect on the price is uncertain but the quantity increases. 
D)  The price rises, but the effect on the quantity is uncertain. 
A)  The price rises and the quantity increases. 
B)  The price falls and the quantity increases. 
C)  The effect on the price is uncertain but the quantity increases. 
D)  The price rises, but the effect on the quantity is uncertain.

Question 20

If the quantity demanded exceeds the quantity supplied,then there is

Accepted Answer

A)  a shortage and the price is below the equilibrium price. 
B)  a shortage and the price is above the equilibrium price. 
C)  a surplus and the price is below the equilibrium price. 
D)  a surplus and the price is above the equilibrium price. 
A)  a shortage and the price is below the equilibrium price. 
B)  a shortage and the price is above the equilibrium price. 
C)  a surplus and the price is below the equilibrium price. 
D)  a surplus and the price is above the equilibrium price.

Suppose that the technology used to produce computers advances.How does this change affect the supply of computers and the supply curve of computers?

For "an increase in the quantity demanded" but not "an increase in demand" to occur,there must be a

A decrease in the quantity supplied is represented by a

A shortage causes the

What is the difference between a money price and a relative price? When the demand and supply model predicts that the price of coffee will rise,is the model predicting that the money price rises or the relative price rises?

If both demand and supply increase,what will be the effect on the equilibrium price and quantity?

Price (dollars per ride) Quantity demanded (rides per day) Quantity supplied (rides per day) 2 100 40 4 90 50 6 80 60 8 70 70 10 60 80 12 50 90 -The table gives the demand and supply schedules for boat rides.If the supply of boat rides increases by 20 rides a day,the price will ________.

What will happen to the equilibrium price and quantity of coffee if it is discovered to help prevent colds and,at the same time,Brazil and Vietnam emerge in the global market as massive producers of coffee?

There is a technological advance in the production of a good and simultaneously also an increase in the expected future price.Which of the following will happen?

If the price of aluminum used to make bicycles increases,the price of a bicycle rises because of a

The quantity of CDs that firms plan to sell this month depends on all of the following except the

General Electric (GE) produces wind turbines that generate wind power.Over the past 10 years,the advances in technology used to produce wind turbines has resulted in

During the past twenty years,the prices of prescription drugs,relative to the prices of other goods,have risen,yet Americans buy more prescription drugs than ever.This might be because

The quantity supplied of a good is

A relative price is the

-The figure above shows the market for airline tickets. If airline tickets are a normal good,then the recession in 2008 that caused people's incomes to decrease lead to a shift from

If the quantity demanded exceeds the quantity supplied,then there is

What Is Economics

The Economic Problem

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

Exam 3: Demand and Supply

Suppose that the technology used to produce computers advances.How does this change affect the supply of computers and the supply curve of computers?

For "an increase in the quantity demanded" but not "an increase in demand" to occur,there must be a

A decrease in the quantity supplied is represented by a

A shortage causes the

What is the difference between a money price and a relative price? When the demand and supply model predicts that the price of coffee will rise,is the model predicting that the money price rises or the relative price rises?

If both demand and supply increase,what will be the effect on the equilibrium price and quantity?

Price (dollars per ride) Quantity demanded (rides per day) Quantity supplied (rides per day) 2 100 40 4 90 50 6 80 60 8 70 70 10 60 80 12 50 90 -The table gives the demand and supply schedules for boat rides.If the supply of boat rides increases by 20 rides a day,the price will ________.

What will happen to the equilibrium price and quantity of coffee if it is discovered to help prevent colds and,at the same time,Brazil and Vietnam emerge in the global market as massive producers of coffee?

There is a technological advance in the production of a good and simultaneously also an increase in the expected future price.Which of the following will happen?

If the price of aluminum used to make bicycles increases,the price of a bicycle rises because of a

The quantity of CDs that firms plan to sell this month depends on all of the following except the

General Electric (GE) produces wind turbines that generate wind power.Over the past 10 years,the advances in technology used to produce wind turbines has resulted in

During the past twenty years,the prices of prescription drugs,relative to the prices of other goods,have risen,yet Americans buy more prescription drugs than ever.This might be because

The quantity supplied of a good is

A relative price is the

-The figure above shows the market for airline tickets. If airline tickets are a normal good,then the recession in 2008 that caused people's incomes to decrease lead to a shift from

If the quantity demanded exceeds the quantity supplied,then there is

What Is Economics

The Economic Problem

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters