Question 1

Which of the following statements is true?

Accepted Answer

A)  An increase in demand causes a change in equilibrium price; the change in price does not cause a further change in demand or supply. 
B)  A decrease in supply causes equilibrium price to rise; the increase in price then results in a decrease in demand. 
C)  If both demand and supply increase there must be an increase in equilibrium price; equilibrium quantity may either increase or decrease. 
D)  If demand decreases and supply increases one cannot determine if equilibrium price will increase or decrease without knowing which change is greater. 
A)  An increase in demand causes a change in equilibrium price; the change in price does not cause a further change in demand or supply. 
B)  A decrease in supply causes equilibrium price to rise; the increase in price then results in a decrease in demand. 
C)  If both demand and supply increase there must be an increase in equilibrium price; equilibrium quantity may either increase or decrease. 
D)  If demand decreases and supply increases one cannot determine if equilibrium price will increase or decrease without knowing which change is greater.

Question 2

A decrease in the price of GPS systems will result in

Accepted Answer

A)  a smaller quantity of GPS systems supplied. 
B)  a larger quantity of GPS systems supplied. 
C)  a decrease in the demand for GPS systems. 
D)  an increase in the supply of GPS systems. 
A)  a smaller quantity of GPS systems supplied. 
B)  a larger quantity of GPS systems supplied. 
C)  a decrease in the demand for GPS systems. 
D)  an increase in the supply of GPS systems.

Question 3

Figure 3-8
  
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₂ and S₂ (point E) If the technology to produce motorcycles improves and the number of buyers increases, how will the equilibrium point change?

Accepted Answer

A)  The equilibrium point will move from E to A. 
B)  The equilibrium point will move from E to B. 
C)  The equilibrium point will move from E to C. 
D)  The equilibrium point will remain at E. 
A)  The equilibrium point will move from E to A. 
B)  The equilibrium point will move from E to B. 
C)  The equilibrium point will move from E to C. 
D)  The equilibrium point will remain at E.

Question 4

Table 3-1
 $\begin{array}{|c|c|c|c|c|}
\hline&&&\text { Rest of }\
\text { Loose Leaf } & \text { Sunil's } & \text { Mia's } &\text { Market }&\text { Market }\
\text { Tea } & \text { Quantity } & \text { Quantity }& \text { Quantity }& \text { Quantity }\
\text { Price per lb. }&\text { Demanded } &\text { Demanded } &\text { Demanded } &\text { Demanded }   \
\text { (dollars) } & \text { (lbs) }& \text { (lbs) }& \text { (lbs) }& \text { (lbs) } \
\hline \$ 8 & 4 & 0 & 30 & \
\hline 6 & 7 & 2 & 40 & \
\hline 5 & 9 & 3 & 51 & \
\hline 4 & 12 & 5 & 64 & \
\hline 3 & 15 & 8 & 90 &\
\hline
\end{array}$
-Refer to Table 3-1.The table above shows the demand schedules for loose-leaf tea of two individuals (Sunil and Mia)and the rest of the market.If the price of loose-leaf tea rises from $3 to $4,the market quantity demanded would

Accepted Answer

A)  decrease by 32 lbs. 
B)  increase by 64 lbs. 
C)  increase by 32 lbs. 
D)  decrease by 64 lbs. 
A)  decrease by 32 lbs. 
B)  increase by 64 lbs. 
C)  increase by 32 lbs. 
D)  decrease by 64 lbs.

Question 5

Elvira decreased her consumption of bananas when the price of peanut butter increased.For Elvira,peanut butter and bananas are

Accepted Answer

A)  substitutes. 
B)  both inferior goods. 
C)  complements. 
D)  both luxury goods. 
A)  substitutes. 
B)  both inferior goods. 
C)  complements. 
D)  both luxury goods.

Question 6

An inferior good is a good for which the quantity demanded decreases as the price increases,holding everything else constant.

Accepted Answer

A) True 
 B)False

Question 7

Assume that the price for lawn care has fallen and sales of lawn care services have also fallen.One can conclude that

Accepted Answer

A)  the law of supply has been violated. 
B)  the number of lawn care service companies has increased. 
C)  the demand for lawn care service has decreased. 
D)  lawn care services are deliberately charging low prices because they want to discourage people from maintaining their own lawns. 
A)  the law of supply has been violated. 
B)  the number of lawn care service companies has increased. 
C)  the demand for lawn care service has decreased. 
D)  lawn care services are deliberately charging low prices because they want to discourage people from maintaining their own lawns.

Question 8

Figure 3-6
  
-Refer to Figure 3-6.The figure above represents the market for coffee grinders.Compare the conditions in the market when the price is $15 and when the price is $21.Which of the following describes how the market differs at these prices?

Accepted Answer

A)  At each price there is a shortage; the shortage is greater at $15 than at $21. 
B)  The difference between quantity supplied and quantity demanded is greater at $21 than at $15. 
C)  At each price there is a shortage; firms will raise the equilibrium price in order to eliminate the shortage. 
D)  At each price the demand for coffee grinders exceeds the supply of coffee grinders. 
A)  At each price there is a shortage; the shortage is greater at $15 than at $21. 
B)  The difference between quantity supplied and quantity demanded is greater at $21 than at $15. 
C)  At each price there is a shortage; firms will raise the equilibrium price in order to eliminate the shortage. 
D)  At each price the demand for coffee grinders exceeds the supply of coffee grinders.

Question 9

Figure 3-4
  
-Refer to Figure 3-4.At a price of $15,how many units will be sold?

Accepted Answer

A)  300 
B)  400 
C)  600 
D)  700 
A)  300 
B)  400 
C)  600 
D)  700

Question 10

Figure 3-5
  
-Refer to Figure 3-5.At a price of $0

Accepted Answer

A)  there is a surplus of 8 units. 
B)  there is a surplus of 0 units. 
C)  there is a shortage of 0 units. 
D)  there is a shortage of 8 units. 
A)  there is a surplus of 8 units. 
B)  there is a surplus of 0 units. 
C)  there is a shortage of 0 units. 
D)  there is a shortage of 8 units.

Question 11

Figure 3-8
  
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₁ and S₁ (point A) If there is a surplus of motorcycles how will the equilibrium point change?

Accepted Answer

A)  The equilibrium point will move from A to B. 
B)  The equilibrium point will move from A to C. 
C)  There will be no change in the equilibrium point. 
D)  The equilibrium point will move from A to E. 
A)  The equilibrium point will move from A to B. 
B)  The equilibrium point will move from A to C. 
C)  There will be no change in the equilibrium point. 
D)  The equilibrium point will move from A to E.

Question 12

Suppose consumer preference for organic corn starts to rise while the cost of growing organic corn continues to rise.In the market for organic corn,this would be represented by the equilibrium price ________ and the equilibrium quantity ________.

Accepted Answer

A)  increasing; increasing or decreasing 
B)  decreasing; increasing or decreasing 
C)  increasing or decreasing; increasing 
D)  increasing or decreasing; decreasing 
A)  increasing; increasing or decreasing 
B)  decreasing; increasing or decreasing 
C)  increasing or decreasing; increasing 
D)  increasing or decreasing; decreasing

Question 13

A normal good is a good for which the demanded decreases as income decreases,holding everything else constant.

Accepted Answer

A) True 
 B)False

Question 14

Explain how it would be possible for the equilibrium price and equilibrium quantity to both increase in the market for motorcycles if consumer preference for motorcycles increases and the number of motorcycle manufacturers decreases.

Accepted Answer

An increase in consumer preference will

Question 15

Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for sushi if the Surgeon General announces that a majority of the raw fish that is imported to make sushi contains high levels of toxic mercury?

Accepted Answer

A)  D decreases, S no change, P and Q decrease. 
B)  S decreases, D no change, P increases, Q decreases. 
C)  D and S decrease, P and Q decrease. 
D)  D no change, S increases, P decreases, Q decreases. 
A)  D decreases, S no change, P and Q decrease. 
B)  S decreases, D no change, P increases, Q decreases. 
C)  D and S decrease, P and Q decrease. 
D)  D no change, S increases, P decreases, Q decreases.

Question 16

All else equal,as the price of a product falls,the quantity supplied decreases.

Accepted Answer

A) True 
 B)False

Question 17

Figure 3-8
  
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₁ and S₁ (point A) If there is an increase in the wages of motorcycle workers and an increase in the price of motorcycle insurance, a complement to motorcycles, the equilibrium could move to which point?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  E 
A)  A 
B)  B 
C)  C 
D)  E

Question 18

Article Summary
World Tourism Day 2017, with its official celebration on September 27 in Qatar, was focused on sustainable tourism. Established by the United Nations World Tourism Organization (UNWTO), World Tourism Day has been celebrated since 1980, and the theme for 2017 was the "International Year of Sustainable Tourism for Development." The event was designed with two sessions: one focused on 'Tourism as a driver of economic growth', and the other 'Tourism and the Planet: committed to a greener future'. With over 1.2 billion travellers crossing international borders in 2016, and that number expected to grow to 1.8 billion by 2030, sustainable tourism is viewed by many as an important catalyst for diversification and economic growth.
Source: Vicky Karantzavelou, " World Tourism Day 2017 celebrated on the theme Sustainable Tourism — a Tool for Development," traveldailynews.com, August 14, 2017

-Refer to the Article Summary.Assume that more global tourist destinations begin to offer and publicize sustainable tourism to American tourists and,due to the growing number of millennials attracted to sustainability,more Americans choose to embrace sustainable tourism.All else equal,what will happen to the equilibrium price and equilibrium quantity in the market for sustainable tourism as a result of these two factors?

Accepted Answer

A)  Equilibrium price may increase or decrease, and equilibrium quantity will decrease. 
B)  Equilibrium price will increase and equilibrium quantity may increase or decrease. 
C)  Equilibrium price will decrease and equilibrium quantity may increase or decrease. 
D)  Equilibrium price may increase or decrease, and equilibrium quantity will increase. 
A)  Equilibrium price may increase or decrease, and equilibrium quantity will decrease. 
B)  Equilibrium price will increase and equilibrium quantity may increase or decrease. 
C)  Equilibrium price will decrease and equilibrium quantity may increase or decrease. 
D)  Equilibrium price may increase or decrease, and equilibrium quantity will increase.

Question 19

A change in supply is represented by a shift of the supply curve.

Accepted Answer

A) True 
 B)False

Question 20

Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right,but the supply curve shifts less than the demand curve.As a result

Accepted Answer

A)  both the equilibrium price and quantity of DVD players will decrease. 
B)  the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease. 
C)  the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will increase. 
D)  the equilibrium price of DVD players will decrease; the equilibrium quantity will increase. 
A)  both the equilibrium price and quantity of DVD players will decrease. 
B)  the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease. 
C)  the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will increase. 
D)  the equilibrium price of DVD players will decrease; the equilibrium quantity will increase.

Which of the following statements is true?

A decrease in the price of GPS systems will result in

Elvira decreased her consumption of bananas when the price of peanut butter increased.For Elvira,peanut butter and bananas are

An inferior good is a good for which the quantity demanded decreases as the price increases,holding everything else constant.

Assume that the price for lawn care has fallen and sales of lawn care services have also fallen.One can conclude that

Figure 3-6 -Refer to Figure 3-6.The figure above represents the market for coffee grinders.Compare the conditions in the market when the price is $15 and when the price is $21.Which of the following describes how the market differs at these prices?

Figure 3-4 -Refer to Figure 3-4.At a price of $15,how many units will be sold?

Figure 3-5 -Refer to Figure 3-5.At a price of $0

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₁ and S₁ (point A) If there is a surplus of motorcycles how will the equilibrium point change?

Suppose consumer preference for organic corn starts to rise while the cost of growing organic corn continues to rise.In the market for organic corn,this would be represented by the equilibrium price and the equilibrium quantity .

A normal good is a good for which the demanded decreases as income decreases,holding everything else constant.

Explain how it would be possible for the equilibrium price and equilibrium quantity to both increase in the market for motorcycles if consumer preference for motorcycles increases and the number of motorcycle manufacturers decreases.

Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for sushi if the Surgeon General announces that a majority of the raw fish that is imported to make sushi contains high levels of toxic mercury?

All else equal,as the price of a product falls,the quantity supplied decreases.

A change in supply is represented by a shift of the supply curve.

Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right,but the supply curve shifts less than the demand curve.As a result

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Market Efficiency and Market Failure

The Economics of Health Care

Firms, The Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,Production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, International Trade, and Exchange Rates

Filters

Exam 3: Where Prices Come From: The Interaction of Demand and Supply

Which of the following statements is true?

A decrease in the price of GPS systems will result in

Elvira decreased her consumption of bananas when the price of peanut butter increased.For Elvira,peanut butter and bananas are

An inferior good is a good for which the quantity demanded decreases as the price increases,holding everything else constant.

Assume that the price for lawn care has fallen and sales of lawn care services have also fallen.One can conclude that

Figure 3-6 -Refer to Figure 3-6.The figure above represents the market for coffee grinders.Compare the conditions in the market when the price is $15 and when the price is $21.Which of the following describes how the market differs at these prices?

Figure 3-4 -Refer to Figure 3-4.At a price of $15,how many units will be sold?

Figure 3-5 -Refer to Figure 3-5.At a price of $0

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₁ and S₁ (point A) If there is a surplus of motorcycles how will the equilibrium point change?

Suppose consumer preference for organic corn starts to rise while the cost of growing organic corn continues to rise.In the market for organic corn,this would be represented by the equilibrium price ________ and the equilibrium quantity ________.

A normal good is a good for which the demanded decreases as income decreases,holding everything else constant.

Explain how it would be possible for the equilibrium price and equilibrium quantity to both increase in the market for motorcycles if consumer preference for motorcycles increases and the number of motorcycle manufacturers decreases.

Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for sushi if the Surgeon General announces that a majority of the raw fish that is imported to make sushi contains high levels of toxic mercury?

All else equal,as the price of a product falls,the quantity supplied decreases.

A change in supply is represented by a shift of the supply curve.

Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right,but the supply curve shifts less than the demand curve.As a result

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Market Efficiency and Market Failure

The Economics of Health Care

Firms, The Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,Production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, International Trade, and Exchange Rates

Filters

Suppose consumer preference for organic corn starts to rise while the cost of growing organic corn continues to rise.In the market for organic corn,this would be represented by the equilibrium price and the equilibrium quantity .