Question 1

A decrease in the equilibrium quantity for a product will result

Accepted Answer

A)  when the quantity demanded for the product exceeds the quantity supplied. 
B)  when there is a decrease in supply and a decrease in demand for the product. 
C)  when there is an increase in supply and a decrease in demand for the product. 
D)  when there is a decrease in demand and a decrease in the number of firms producing the product. 
A)  when the quantity demanded for the product exceeds the quantity supplied. 
B)  when there is a decrease in supply and a decrease in demand for the product. 
C)  when there is an increase in supply and a decrease in demand for the product. 
D)  when there is a decrease in demand and a decrease in the number of firms producing the product.

Question 2

One would speak of a change in the quantity of a good supplied, rather than a change in supply, if

Accepted Answer

A)  supplier expectations about future prices change. 
B)  the price of the good changes. 
C)  the cost of producing the good changes. 
D)  prices of substitutes in production change. 
A)  supplier expectations about future prices change. 
B)  the price of the good changes. 
C)  the cost of producing the good changes. 
D)  prices of substitutes in production change.

Question 3

-Refer to Figure 3-1. If the product represented is a normal good, a decrease in income would be represented by a movement from

Accepted Answer

A)  A to B. 
B)  B to A. 
C)  D1 to D2. 
D)  D2 to D1. 
A)  A to B. 
B)  B to A. 
C)  D1 to D2. 
D)  D2 to D1.

Question 4

If the demand curve for a product shifts to the left and the supply curve for the product shifts to the left, the equilibrium quantity will decrease.

Accepted Answer

A) True 
 B)False

Question 5

Draw a demand curve and label it D1. On the graph, illustrate an increase in demand and a decrease in demand, and label the curves D2 and D3, respectively. Starting on demand curve D1, explain the shift that would result from each of the following events:
a. an increase in income and the good is a normal good
b. an increase in income and the good is an inferior good
c. a decrease in the price of a substitute good
d. a decrease in the price of a complementary good
e. an increase in the taste for the good
f. a decrease in population
g. an increase in the expected future price of the good

Accepted Answer

@#IMG-DLM& a, d, e, and g would increase

Question 6

As the number of firms in a market increases, the supply curve will shift to the right and the equilibrium quantity will rise.

Accepted Answer

A) True 
 B)False

Question 7

If more insurance companies decide to cover part of the price of voluntary laser eye surgery, and more doctors decide to enter the field of laser eye surgery, what will happen in the market for laser eye surgery as a result of these two factors?

Accepted Answer

A)  Demand will increase, but these two factors will not shift the supply curve. 
B)  Supply will increase, but these two factors will not shift the demand curve. 
C)  Demand and supply will both increase. 
D)  Demand will increase and supply will decrease. 
A)  Demand will increase, but these two factors will not shift the supply curve. 
B)  Supply will increase, but these two factors will not shift the demand curve. 
C)  Demand and supply will both increase. 
D)  Demand will increase and supply will decrease.

Question 8

Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall. Holding everything else constant, how would this affect the market for Blu-ray players (a complement to LCD televisions)?

Accepted Answer

A)  The supply of Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease. 
B)  The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would increase. 
C)  The demand for Blu-ray players would decrease because consumers could afford to buy fewer LCD televisions and Blu-ray players. 
D)  The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease. 
A)  The supply of Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease. 
B)  The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would increase. 
C)  The demand for Blu-ray players would decrease because consumers could afford to buy fewer LCD televisions and Blu-ray players. 
D)  The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease.

Question 9

An increase in the number of firms in a market will cause the quantity of a good supplied to increase.

Accepted Answer

A) True 
 B)False

Question 10

For each of the following pairs of products, state which are complements, which are substitutes, and which are unrelated.
a. Blu-ray discs and video-on-demand
b. Fiat 500 and Mini Cooper S
c. Toothpaste and toothbrush
d. Popcorn and snowboards
e. Razors and razor blades

Accepted Answer

a. Substitutes
b. Su

Question 11

As the number of firms in a market decreases, the supply curve will shift to the left and the equilibrium price will rise.

Accepted Answer

A) True 
 B)False

Question 12

-Refer to Figure 3-5. At a price of $20,

Accepted Answer

A)  there would be a surplus of 8 units. 
B)  there would be a shortage of 8 units. 
C)  there would be a surplus of 0 units. 
D)  there would be a shortage of 4 units. 
A)  there would be a surplus of 8 units. 
B)  there would be a shortage of 8 units. 
C)  there would be a surplus of 0 units. 
D)  there would be a shortage of 4 units.

Question 13

Technological advancements have led to lower prices and an increase in the sale of digital cameras. How does this affect the digital photo printing paper market?

Accepted Answer

A)  The demand curve for digital photo printing paper shifts to the right. 
B)  The demand curve for digital photo printing paper shifts to the left. 
C)  The supply curve for digital photo printing paper shifts to the right. 
D)  The supply curve for digital photo printing paper shifts to the left. 
A)  The demand curve for digital photo printing paper shifts to the right. 
B)  The demand curve for digital photo printing paper shifts to the left. 
C)  The supply curve for digital photo printing paper shifts to the right. 
D)  The supply curve for digital photo printing paper shifts to the left.

Question 14

The ________ effect refers to the change in quantity demanded for a good that results from the effect of a change in the good's price on consumers' purchasing power.

Accepted Answer

A)  ceteris paribus 
B)  population 
C)  substitution 
D)  income 
A)  ceteris paribus 
B)  population 
C)  substitution 
D)  income

Question 15

What is the difference between a supply schedule and a supply curve?

Accepted Answer

A supply schedule is a table that shows

Question 16

If a firm expects that the price of its product will be higher in the future than it is today

Accepted Answer

A)  the firm will go out of business. 
B)  the firm has an incentive to increase supply now and decrease supply in the future. 
C)  the firm has an incentive to decrease quantity supplied now and increase quantity supplied in the future. 
D)  the firm has an incentive to decrease supply now and increase supply in the future. 
A)  the firm will go out of business. 
B)  the firm has an incentive to increase supply now and decrease supply in the future. 
C)  the firm has an incentive to decrease quantity supplied now and increase quantity supplied in the future. 
D)  the firm has an incentive to decrease supply now and increase supply in the future.

Question 17

When deciding on which new products to develop, a firm must devote people, time, and money to designing a new product. Because any firm has only limited resources, it

Accepted Answer

A)  should wait until its competitors develop a similar product before deciding on devoting resources to its own product development. 
B)  is not able to develop more than one new product at a time. 
C)  must be certain that the product it chooses to develop will be successful or it will not be able to stay in business. 
D)  faces a trade-off, because resources used to develop one product will not be available to develop another product. 
A)  should wait until its competitors develop a similar product before deciding on devoting resources to its own product development. 
B)  is not able to develop more than one new product at a time. 
C)  must be certain that the product it chooses to develop will be successful or it will not be able to stay in business. 
D)  faces a trade-off, because resources used to develop one product will not be available to develop another product.

Question 18

The income effect explains why there is an inverse relationship between the price of a product and the quantity of the product demanded.

Accepted Answer

A) True 
 B)False

Question 19

If the price of petrol decreases, what will be the impact in the market for public transportation?

Accepted Answer

A)  The demand curve for public transportation shifts to the right. 
B)  The quantity of public transportation demanded increases. 
C)  The demand curve for public transportation shifts to the left. 
D)  The quantity of public transportation demanded decreases. 
A)  The demand curve for public transportation shifts to the right. 
B)  The quantity of public transportation demanded increases. 
C)  The demand curve for public transportation shifts to the left. 
D)  The quantity of public transportation demanded decreases.

Question 20

-Refer to Figure 3-5. At a price of $15,

Accepted Answer

A)  there would be a surplus of 4 units. 
B)  there would be a shortage of 2 units. 
C)  there would be a surplus of 6 units. 
D)  there would be a shortage of 4 units. 
A)  there would be a surplus of 4 units. 
B)  there would be a shortage of 2 units. 
C)  there would be a surplus of 6 units. 
D)  there would be a shortage of 4 units.

A decrease in the equilibrium quantity for a product will result

One would speak of a change in the quantity of a good supplied, rather than a change in supply, if

-Refer to Figure 3-1. If the product represented is a normal good, a decrease in income would be represented by a movement from

If the demand curve for a product shifts to the left and the supply curve for the product shifts to the left, the equilibrium quantity will decrease.

As the number of firms in a market increases, the supply curve will shift to the right and the equilibrium quantity will rise.

If more insurance companies decide to cover part of the price of voluntary laser eye surgery, and more doctors decide to enter the field of laser eye surgery, what will happen in the market for laser eye surgery as a result of these two factors?

Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall. Holding everything else constant, how would this affect the market for Blu-ray players (a complement to LCD televisions)?

An increase in the number of firms in a market will cause the quantity of a good supplied to increase.

For each of the following pairs of products, state which are complements, which are substitutes, and which are unrelated. a. Blu-ray discs and video-on-demand b. Fiat 500 and Mini Cooper S c. Toothpaste and toothbrush d. Popcorn and snowboards e. Razors and razor blades

As the number of firms in a market decreases, the supply curve will shift to the left and the equilibrium price will rise.

-Refer to Figure 3-5. At a price of $20,

Technological advancements have led to lower prices and an increase in the sale of digital cameras. How does this affect the digital photo printing paper market?

The ________ effect refers to the change in quantity demanded for a good that results from the effect of a change in the good's price on consumers' purchasing power.

What is the difference between a supply schedule and a supply curve?

If a firm expects that the price of its product will be higher in the future than it is today

When deciding on which new products to develop, a firm must devote people, time, and money to designing a new product. Because any firm has only limited resources, it

The income effect explains why there is an inverse relationship between the price of a product and the quantity of the product demanded.

If the price of petrol decreases, what will be the impact in the market for public transportation?

-Refer to Figure 3-5. At a price of $15,

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

A decrease in the equilibrium quantity for a product will result

One would speak of a change in the quantity of a good supplied, rather than a change in supply, if

-Refer to Figure 3-1. If the product represented is a normal good, a decrease in income would be represented by a movement from

If the demand curve for a product shifts to the left and the supply curve for the product shifts to the left, the equilibrium quantity will decrease.

As the number of firms in a market increases, the supply curve will shift to the right and the equilibrium quantity will rise.

If more insurance companies decide to cover part of the price of voluntary laser eye surgery, and more doctors decide to enter the field of laser eye surgery, what will happen in the market for laser eye surgery as a result of these two factors?

Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall. Holding everything else constant, how would this affect the market for Blu-ray players (a complement to LCD televisions)?

An increase in the number of firms in a market will cause the quantity of a good supplied to increase.

For each of the following pairs of products, state which are complements, which are substitutes, and which are unrelated. a. Blu-ray discs and video-on-demand b. Fiat 500 and Mini Cooper S c. Toothpaste and toothbrush d. Popcorn and snowboards e. Razors and razor blades

As the number of firms in a market decreases, the supply curve will shift to the left and the equilibrium price will rise.

-Refer to Figure 3-5. At a price of $20,

Technological advancements have led to lower prices and an increase in the sale of digital cameras. How does this affect the digital photo printing paper market?

The ________ effect refers to the change in quantity demanded for a good that results from the effect of a change in the good's price on consumers' purchasing power.

What is the difference between a supply schedule and a supply curve?

If a firm expects that the price of its product will be higher in the future than it is today

When deciding on which new products to develop, a firm must devote people, time, and money to designing a new product. Because any firm has only limited resources, it

The income effect explains why there is an inverse relationship between the price of a product and the quantity of the product demanded.

If the price of petrol decreases, what will be the impact in the market for public transportation?

-Refer to Figure 3-5. At a price of $15,

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