Question 1

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 2

Scarcity is defined as the situation that exists when the quantity demanded for a good is greater than the quantity supplied.

Accepted Answer

A) True 
 B)False

Question 3

If a decrease in income leads to a decrease in the demand for mac and cheese,then mac and cheese is

Accepted Answer

A)  a normal good. 
B)  a neutral good. 
C)  a complement. 
D)  a necessity. 
A)  a normal good. 
B)  a neutral good. 
C)  a complement. 
D)  a necessity.

Question 4

Figure 3-8  
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for sugar at the intersection of D1 and S1 (point
A. The equilibrium point will move from A to B.

Accepted Answer

A)  If there is an increase in the price of fertiliser used on sugar cane and there is a decrease in tastes for sugar-sweetened soft drinks, how will the equilibrium point change? 
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)  If there is an increase in the price of fertiliser used on sugar cane and there is a decrease in tastes for sugar-sweetened soft drinks, how will the equilibrium point change? 
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 5

Vineyards can grow either red wine grapes or white wine grapes on their land.Which of the following would cause the supply of red wine grapes to decrease?

Accepted Answer

A)  An increase in the price of white wine grapes. 
B)  A decrease in the price of white wine grapes. 
C)  An increase in the demand for red wine grapes. 
D)  An increase in the price of red wine. 
A)  An increase in the price of white wine grapes. 
B)  A decrease in the price of white wine grapes. 
C)  An increase in the demand for red wine grapes. 
D)  An increase in the price of red wine.

Question 6

If,in the market for oranges,the supply has increased then

Accepted Answer

A)  the supply curve for oranges has shifted to the right. 
B)  the supply curve for oranges has shifted to the left. 
C)  there has been a movement upwards along the supply curve for oranges. 
D)  there has been a movement downwards along the supply curve for oranges. 
A)  the supply curve for oranges has shifted to the right. 
B)  the supply curve for oranges has shifted to the left. 
C)  there has been a movement upwards along the supply curve for oranges. 
D)  there has been a movement downwards along the supply curve for oranges.

Question 7

If the demand for a product increases and the supply of the same product increases,the equilibrium price will increase.

Accepted Answer

A) True 
 B)False

Question 8

Use the following supply schedule for cherries to draw a graph of the supply curve.Be sure to label the supply curve and each axis,and show each point on the supply curve.
 $$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Price (dollars } \
\text { per bushel) }
\end{array} & \begin{array} { c } 
\text { Quantity (thousands } \
\text { of bushels) }
\end{array} \
\hline 4 & 25 \
\hline 8 & 50 \
\hline 12 & 75 \
\hline 16 & 100 \
\hline 20 & 12 \
\hline
\end{array}$$

Accepted Answer

The answer of Use the following supply schedule for cherries...

Question 9

Assume that both the demand curve and the supply curve for MP3 players shift to the right,but the supply curve shifts more than the demand curve.As a result,

Accepted Answer

A)  both the equilibrium price and quantity of MP3 players will decrease. 
B)  the equilibrium price of MP3 players will decrease; the equilibrium quantity will increase. 
C)  the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will decrease. 
D)  the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease. 
A)  both the equilibrium price and quantity of MP3 players will decrease. 
B)  the equilibrium price of MP3 players will decrease; the equilibrium quantity will increase. 
C)  the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will decrease. 
D)  the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease.

Question 10

What are the five variables that will shift the demand curve?

Accepted Answer

1.Income
2.Price of

Question 11

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 12

If,in response to an increase in the price of chocolate,the quantity of chocolate demanded decreases,economists would describe this as

Accepted Answer

A)  a decrease in demand. 
B)  a decrease in quantity demanded. 
C)  a change in consumer income. 
D)  a decrease in consumers' taste for chocolate. 
A)  a decrease in demand. 
B)  a decrease in quantity demanded. 
C)  a change in consumer income. 
D)  a decrease in consumers' taste for chocolate.

Question 13

Holding everything else constant,a decrease in the price of bicycles will result in

Accepted Answer

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

Question 14

If the price of peaches,a substitute for plums,decreases,the demand for plums will increase.

Accepted Answer

A) True 
 B)False

Question 15

'Because chips and salsa are complements,an increase in the price of chips will cause the demand for salsa to decrease.This initial shift in demand for chips results in a higher price for chips; this higher price will cause the demand curve for chips to shift to the right.' Which of the following correctly comments on this statement?

Accepted Answer

A)  The statement will be true if consumer tastes for chips and salsa do not change. 
B)  The statement is false because a change in the price of chips would not change the demand for chips. 
C)  The statement is false because salsa is an inferior good; chips are normal goods. 
D)  The statement is false because one cannot assume that chips and salsa are complements for all consumers. 
A)  The statement will be true if consumer tastes for chips and salsa do not change. 
B)  The statement is false because a change in the price of chips would not change the demand for chips. 
C)  The statement is false because salsa is an inferior good; chips are normal goods. 
D)  The statement is false because one cannot assume that chips and salsa are complements for all consumers.

Question 16

Which of the following would cause both the equilibrium price and equilibrium quantity of potatoes (assume that potatoes are an inferior good)to decrease?

Accepted Answer

A)  An increase in consumer income. 
B)  A freeze that sharply reduces potato output. 
C)  A decrease in consumer income. 
D)  A technological advancement that results in a bumper crop of potatoes. 
A)  An increase in consumer income. 
B)  A freeze that sharply reduces potato output. 
C)  A decrease in consumer income. 
D)  A technological advancement that results in a bumper crop of potatoes.

Question 17

If tablet computers are considered substitutes for e-readers,the decline in the price of tablet computers would,all else being 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 18

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 19

Figure 3-7  
-Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for potatoes and that steak and potatoes are complements.Which panel describes what happens in this market when the price of steak rises?

Accepted Answer

A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d) 
A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d)

Question 20

If,in response to a decrease in the price of grapes,the quantity of grapes demanded increases,economists would describe this as

Accepted Answer

A)  an increase in demand. 
B)  an increase in quantity demanded. 
C)  a change in consumer income. 
D)  an increase in consumers' taste for grapes. 
A)  an increase in demand. 
B)  an increase in quantity demanded. 
C)  a change in consumer income. 
D)  an increase in consumers' taste for grapes.

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

Scarcity is defined as the situation that exists when the quantity demanded for a good is greater than the quantity supplied.

If a decrease in income leads to a decrease in the demand for mac and cheese,then mac and cheese is

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for sugar at the intersection of D₁ and S₁ (point A. The equilibrium point will move from A to B.

Vineyards can grow either red wine grapes or white wine grapes on their land.Which of the following would cause the supply of red wine grapes to decrease?

If,in the market for oranges,the supply has increased then

If the demand for a product increases and the supply of the same product increases,the equilibrium price will increase.

Use the following supply schedule for cherries to draw a graph of the supply curve.Be sure to label the supply curve and each axis,and show each point on the supply curve. Price (dollars per bushel) Quantity (thousands of bushels) 4 25 8 50 12 75 16 100 20 12

Assume that both the demand curve and the supply curve for MP3 players shift to the right,but the supply curve shifts more than the demand curve.As a result,

What are the five variables that will shift the demand curve?

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

If,in response to an increase in the price of chocolate,the quantity of chocolate demanded decreases,economists would describe this as

Holding everything else constant,a decrease in the price of bicycles will result in

If the price of peaches,a substitute for plums,decreases,the demand for plums will increase.

Which of the following would cause both the equilibrium price and equilibrium quantity of potatoes (assume that potatoes are an inferior good)to decrease?

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

A decrease in the equilibrium quantity for a product will result

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for potatoes and that steak and potatoes are complements.Which panel describes what happens in this market when the price of steak rises?

If,in response to a decrease in the price of grapes,the quantity of grapes demanded increases,economists would describe this as

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

Technology,production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Social Policy and Inequality

Gdp: Measuring Total Production, income and Economic Growth

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Comparative Advantage and the Gains From International Trade

Macroeconomics in an Open Economy

Filters

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

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

Scarcity is defined as the situation that exists when the quantity demanded for a good is greater than the quantity supplied.

If a decrease in income leads to a decrease in the demand for mac and cheese,then mac and cheese is

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for sugar at the intersection of D1 and S1 (point A. The equilibrium point will move from A to B.

Vineyards can grow either red wine grapes or white wine grapes on their land.Which of the following would cause the supply of red wine grapes to decrease?

If,in the market for oranges,the supply has increased then

If the demand for a product increases and the supply of the same product increases,the equilibrium price will increase.

Use the following supply schedule for cherries to draw a graph of the supply curve.Be sure to label the supply curve and each axis,and show each point on the supply curve. Price (dollars per bushel) Quantity (thousands of bushels) 4 25 8 50 12 75 16 100 20 12

Assume that both the demand curve and the supply curve for MP3 players shift to the right,but the supply curve shifts more than the demand curve.As a result,

What are the five variables that will shift the demand curve?

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

If,in response to an increase in the price of chocolate,the quantity of chocolate demanded decreases,economists would describe this as

Holding everything else constant,a decrease in the price of bicycles will result in

If the price of peaches,a substitute for plums,decreases,the demand for plums will increase.

Which of the following would cause both the equilibrium price and equilibrium quantity of potatoes (assume that potatoes are an inferior good)to decrease?

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

A decrease in the equilibrium quantity for a product will result

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for potatoes and that steak and potatoes are complements.Which panel describes what happens in this market when the price of steak rises?

If,in response to a decrease in the price of grapes,the quantity of grapes demanded increases,economists would describe this as

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

Technology,production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Social Policy and Inequality

Gdp: Measuring Total Production, income and Economic Growth

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Comparative Advantage and the Gains From International Trade

Macroeconomics in an Open Economy

Filters

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for sugar at the intersection of D₁ and S₁ (point A. The equilibrium point will move from A to B.