Question 1

At a product's equilibrium price

Accepted Answer

A)  the product's demand curve is the same as the product's supply curve. 
B)  the quantity of the product demanded is greater than the quantity of the product supplied. 
C)  the quantity of the product demanded is less than the quantity of the product supplied. 
D)  the product's demand curve crosses the product's supply curve. 
A)  the product's demand curve is the same as the product's supply curve. 
B)  the quantity of the product demanded is greater than the quantity of the product supplied. 
C)  the quantity of the product demanded is less than the quantity of the product supplied. 
D)  the product's demand curve crosses the product's supply curve.

Question 2

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 3

Which of the following is evidence of a surplus of bananas?

Accepted Answer

A)  Firms raise the price of bananas. 
B)  The price of bananas is lowered in order to increase sales. 
C)  The equilibrium price of bananas rises due to an increase in demand. 
D)  The quantity demanded of bananas is greater than the quantity supplied. 
A)  Firms raise the price of bananas. 
B)  The price of bananas is lowered in order to increase sales. 
C)  The equilibrium price of bananas rises due to an increase in demand. 
D)  The quantity demanded of bananas is greater than the quantity supplied.

Question 4

Chips and salsa are complements. If the price of salsa decreases, the demand for chips will increase.

Accepted Answer

A) True 
 B)False

Question 5

-Refer to Figure 3-5. In a free market such as that depicted above, a surplus is eliminated by

Accepted Answer

A)  a price increase, increasing the supply and decreasing the demand. 
B)  a price decrease, decreasing the supply and increasing the demand. 
C)  a price decrease, decreasing the quantity supplied and increasing the quantity demanded. 
D)  a price increase, increasing the quantity supplied and decreasing the quantity demanded. 
A)  a price increase, increasing the supply and decreasing the demand. 
B)  a price decrease, decreasing the supply and increasing the demand. 
C)  a price decrease, decreasing the quantity supplied and increasing the quantity demanded. 
D)  a price increase, increasing the quantity supplied and decreasing the quantity demanded.

Question 6

Harvey Rabbitt pays for monthly cable TV service. Last week the cable company informed Harvey that his monthly cable price would go down because the city council has granted approval for three new cable companies to service his area. How is the market for cable TV services affected by this?

Accepted Answer

A)  There is an increase in the supply of cable TV service. 
B)  There is a decrease in the demand for cable TV service. 
C)  There is a decrease in the quantity of cable TV service supplied. 
D)  There is a decrease in the supply of cable TV service. 
A)  There is an increase in the supply of cable TV service. 
B)  There is a decrease in the demand for cable TV service. 
C)  There is a decrease in the quantity of cable TV service supplied. 
D)  There is a decrease in the supply of cable TV service.

Question 7

-Refer to Figure 3-4. If the current market price is $10, the market will achieve equilibrium by

Accepted Answer

A)  a price increase, increasing the supply and decreasing the demand. 
B)  a price decrease, decreasing the supply and increasing the demand. 
C)  a price decrease, decreasing the quantity supplied and increasing the quantity demanded. 
D)  a price increase, increasing the quantity supplied and decreasing the quantity demanded. 
A)  a price increase, increasing the supply and decreasing the demand. 
B)  a price decrease, decreasing the supply and increasing the demand. 
C)  a price decrease, decreasing the quantity supplied and increasing the quantity demanded. 
D)  a price increase, increasing the quantity supplied and decreasing the quantity demanded.

Question 8

If tablet computers are considered substitutes for e-readers, the decline in the price of tablet computers would, all else equal,

Accepted Answer

A)  increase the demand for e-readers. 
B)  decrease the demand for e-readers. 
C)  increase the quantity demanded for e-readers. 
D)  decrease the quantity demanded for e-readers. 
A)  increase the demand for e-readers. 
B)  decrease the demand for e-readers. 
C)  increase the quantity demanded for e-readers. 
D)  decrease the quantity demanded for e-readers.

Question 9

Tomas increased his consumption of potato chips when the price of pistachios increased. For Tomas, potato chips and pistachios are

Accepted Answer

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

Question 10

In a perfectly competitive market, there are ________ buyers and ________ sellers.

Accepted Answer

A)  many; few 
B)  few; many 
C)  many; many 
D)  few; few 
A)  many; few 
B)  few; many 
C)  many; many 
D)  few; few

Question 11

Holding everything else constant, an increase in the price of MP3 players will result in

Accepted Answer

A)  a decrease in the quantity of MP3 players supplied. 
B)  a decrease in the demand for MP3 players. 
C)  an increase in the supply of MP3 players. 
D)  a decrease in the quantity of MP3 players demanded. 
A)  a decrease in the quantity of MP3 players supplied. 
B)  a decrease in the demand for MP3 players. 
C)  an increase in the supply of MP3 players. 
D)  a decrease in the quantity of MP3 players demanded.

Question 12

If an increase in income leads to a decrease in the demand for popcorn, then popcorn is

Accepted Answer

A)  an inferior good. 
B)  a neutral good. 
C)  a necessity. 
D)  a normal good. 
A)  an inferior good. 
B)  a neutral good. 
C)  a necessity. 
D)  a normal good.

Question 13

What is the difference between an 'increase in supply' and an 'increase in quantity supplied'?

Accepted Answer

A)  There is no difference between the two terms; they both refer to a shift of the supply curve. 
B)  There is no difference between the two terms; they both refer to a movement along a given supply curve. 
C)  An 'increase in supply' means the supply curve has shifted to the right while an 'increase in quantity supplied' means at any given price supply has increased. 
D)  An 'increase in supply' means the supply curve has shifted to the right while an 'increase in quantity supplied' refers to a movement along a given supply curve in response to an increase in price. 
A)  There is no difference between the two terms; they both refer to a shift of the supply curve. 
B)  There is no difference between the two terms; they both refer to a movement along a given supply curve. 
C)  An 'increase in supply' means the supply curve has shifted to the right while an 'increase in quantity supplied' means at any given price supply has increased. 
D)  An 'increase in supply' means the supply curve has shifted to the right while an 'increase in quantity supplied' refers to a movement along a given supply curve in response to an increase in price.

Question 14

Which of the following would cause a decrease in the equilibrium price and an increase in the equilibrium quantity of salmon?

Accepted Answer

A)  a decrease in demand and an increase in supply 
B)  an increase in supply 
C)  an increase in supply and an increase in demand greater than the increase in supply 
D)  a decrease in demand and a decrease in supply 
A)  a decrease in demand and an increase in supply 
B)  an increase in supply 
C)  an increase in supply and an increase in demand greater than the increase in supply 
D)  a decrease in demand and a decrease in supply

Question 15

If the price of orchids falls, the substitution effect due to the price change will cause

Accepted Answer

A)  an increase in the demand for orchids. 
B)  an increase in the demand for roses, a substitute for orchids. 
C)  an increase in the quantity demanded of orchids. 
D)  an increase in the quantity supplied of orchids. 
A)  an increase in the demand for orchids. 
B)  an increase in the demand for roses, a substitute for orchids. 
C)  an increase in the quantity demanded of orchids. 
D)  an increase in the quantity supplied of orchids.

Question 16

Suppose that when the price of raspberries increases, Lonnie increases his purchases of papayas. To Lonnie,

Accepted Answer

A)  raspberries and papayas are complements. 
B)  raspberries and papayas are inferior goods. 
C)  raspberries and papayas are normal goods. 
D)  raspberries and papayas are substitutes. 
A)  raspberries and papayas are complements. 
B)  raspberries and papayas are inferior goods. 
C)  raspberries and papayas are normal goods. 
D)  raspberries and papayas are substitutes.

Question 17

If the Apple iPhone and the Samsung Galaxy are considered substitutes, then, other things equal, an increase in the price of the iPhone will

Accepted Answer

A)  decrease the demand for the iPhone. 
B)  increase the demand for the Galaxy. 
C)  increase the quantity demanded for the Galaxy. 
D)  increase the quantity demanded for the iPhone. 
A)  decrease the demand for the iPhone. 
B)  increase the demand for the Galaxy. 
C)  increase the quantity demanded for the Galaxy. 
D)  increase the quantity demanded for the iPhone.

Question 18

Suppose that when the price of hamburgers decreases, the Ruiz family increases their purchases of ketchup. To the Ruiz family,

Accepted Answer

A)  hamburgers and ketchup are complements. 
B)  hamburgers and ketchup and substitutes. 
C)  hamburgers and ketchup are normal goods. 
D)  hamburgers are normal goods and hot dogs are inferior goods. 
A)  hamburgers and ketchup are complements. 
B)  hamburgers and ketchup and substitutes. 
C)  hamburgers and ketchup are normal goods. 
D)  hamburgers are normal goods and hot dogs are inferior goods.

Question 19

A movement along the demand curve for toothpaste would be caused by

Accepted Answer

A)  a change in the price of toothbrushes. 
B)  a change in consumer income. 
C)  a change in the price of toothpaste. 
D)  a change in population. 
A)  a change in the price of toothbrushes. 
B)  a change in consumer income. 
C)  a change in the price of toothpaste. 
D)  a change in population.

Question 20

Which of the following is evidence of a shortage of walnuts?

Accepted Answer

A)  Firms lower the price of walnuts. 
B)  The price of cashews is lowered in order to make up for the walnut shortage. 
C)  The equilibrium price of walnuts falls due to a decrease in demand. 
D)  The quantity demanded of walnuts is greater than the quantity supplied. 
A)  Firms lower the price of walnuts. 
B)  The price of cashews is lowered in order to make up for the walnut shortage. 
C)  The equilibrium price of walnuts falls due to a decrease in demand. 
D)  The quantity demanded of walnuts is greater than the quantity supplied.

At a product's equilibrium price

Which of the following statements is true?

Which of the following is evidence of a surplus of bananas?

Chips and salsa are complements. If the price of salsa decreases, the demand for chips will increase.

-Refer to Figure 3-5. In a free market such as that depicted above, a surplus is eliminated by

Harvey Rabbitt pays for monthly cable TV service. Last week the cable company informed Harvey that his monthly cable price would go down because the city council has granted approval for three new cable companies to service his area. How is the market for cable TV services affected by this?

-Refer to Figure 3-4. If the current market price is $10, the market will achieve equilibrium by

If tablet computers are considered substitutes for e-readers, the decline in the price of tablet computers would, all else equal,

Tomas increased his consumption of potato chips when the price of pistachios increased. For Tomas, potato chips and pistachios are

In a perfectly competitive market, there are buyers and sellers.

Holding everything else constant, an increase in the price of MP3 players will result in

If an increase in income leads to a decrease in the demand for popcorn, then popcorn is

What is the difference between an 'increase in supply' and an 'increase in quantity supplied'?

Which of the following would cause a decrease in the equilibrium price and an increase in the equilibrium quantity of salmon?

If the price of orchids falls, the substitution effect due to the price change will cause

Suppose that when the price of raspberries increases, Lonnie increases his purchases of papayas. To Lonnie,

If the Apple iPhone and the Samsung Galaxy are considered substitutes, then, other things equal, an increase in the price of the iPhone will

Suppose that when the price of hamburgers decreases, the Ruiz family increases their purchases of ketchup. To the Ruiz family,

A movement along the demand curve for toothpaste would be caused by

Which of the following is evidence of a shortage of walnuts?

Economics Foundations and Models

Choices and Trade - Offs in the Market

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency , Government Price Setting and Taxes

Concumer Choice and Behavioural Economics

Technology , Production and Costs

Firms in Perfectly Compitive Markets

Monopoly Markets

Monopolistic Competition : The Competitive Model in More Realistic Setting

Oligopoly : Firms in Less Competitve Markets

The Market for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities , Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

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

At a product's equilibrium price

Which of the following statements is true?

Which of the following is evidence of a surplus of bananas?

Chips and salsa are complements. If the price of salsa decreases, the demand for chips will increase.

-Refer to Figure 3-5. In a free market such as that depicted above, a surplus is eliminated by

Harvey Rabbitt pays for monthly cable TV service. Last week the cable company informed Harvey that his monthly cable price would go down because the city council has granted approval for three new cable companies to service his area. How is the market for cable TV services affected by this?

-Refer to Figure 3-4. If the current market price is $10, the market will achieve equilibrium by

If tablet computers are considered substitutes for e-readers, the decline in the price of tablet computers would, all else equal,

Tomas increased his consumption of potato chips when the price of pistachios increased. For Tomas, potato chips and pistachios are

In a perfectly competitive market, there are ________ buyers and ________ sellers.

Holding everything else constant, an increase in the price of MP3 players will result in

If an increase in income leads to a decrease in the demand for popcorn, then popcorn is

What is the difference between an 'increase in supply' and an 'increase in quantity supplied'?

Which of the following would cause a decrease in the equilibrium price and an increase in the equilibrium quantity of salmon?

If the price of orchids falls, the substitution effect due to the price change will cause

Suppose that when the price of raspberries increases, Lonnie increases his purchases of papayas. To Lonnie,

If the Apple iPhone and the Samsung Galaxy are considered substitutes, then, other things equal, an increase in the price of the iPhone will

Suppose that when the price of hamburgers decreases, the Ruiz family increases their purchases of ketchup. To the Ruiz family,

A movement along the demand curve for toothpaste would be caused by

Which of the following is evidence of a shortage of walnuts?

Economics Foundations and Models

Choices and Trade - Offs in the Market

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency , Government Price Setting and Taxes

Concumer Choice and Behavioural Economics

Technology , Production and Costs

Firms in Perfectly Compitive Markets

Monopoly Markets

Monopolistic Competition : The Competitive Model in More Realistic Setting

Oligopoly : Firms in Less Competitve Markets

The Market for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities , Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

In a perfectly competitive market, there are buyers and sellers.