Question 1

Figure 3-1  
-Refer to Figure 3-1.A decrease in the price of the product 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. A

Question 2

Which of the following would cause both the equilibrium price and equilibrium quantity of cotton (assume that cotton is a normal good)to increase?

Accepted Answer

A) an increase in consumer income 
B) a drought that sharply reduces cotton output 
C) a decrease in consumer income 
D) unusually good weather that results in a bumper crop of cotton 
A) an increase in consumer income 
B) a drought that sharply reduces cotton output 
C) a decrease in consumer income 
D) unusually good weather that results in a bumper crop of cotton A

Question 3

Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shift to the left,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. D

Question 4

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 5

An increase in the price of pineapples will result in

Accepted Answer

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

Question 6

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 7

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 8

How does the decreasing use of traditional cameras affect the market for traditional camera film?

Accepted Answer

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

Question 9

Figure 3-7  
-Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for almonds.Which panel best describes what happens in this market when there is an increase in the productivity of almond harvesters?

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 10

Which of the following statements is true?

Accepted Answer

A) An increase in supply 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 supply 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 11

Which of the following would shift the supply curve for MP3 players to the right?

Accepted Answer

A) an increase in the price of a substitute in production 
B) an increase in consumer income (assuming that all MP3 players are normal goods) 
C) a decrease in the number of firms that produce MP3 players 
D) a decrease in the price of an input used to produce MP3 players 
A) an increase in the price of a substitute in production 
B) an increase in consumer income (assuming that all MP3 players are normal goods) 
C) a decrease in the number of firms that produce MP3 players 
D) a decrease in the price of an input used to produce MP3 players

Question 12

Figure 3-4  
-Refer to Figure 3-4.If the current market price is $15,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 13

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

Accepted Answer

A) none of the points shown 
B) B 
C) C 
D) E 
A) none of the points shown 
B) B 
C) C 
D) E

Question 14

What is the law of supply? What does this law imply about the shape of the supply curve?

Accepted Answer

The law of supply states that,holding ev

Question 15

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 16

The income effect of a price change refers to the impact of a change in

Accepted Answer

A) income on the price of a good. 
B) demand when income changes. 
C) the quantity demanded when income changes. 
D) the price of a good on a consumer's purchasing power. 
A) income on the price of a good. 
B) demand when income changes. 
C) the quantity demanded when income changes. 
D) the price of a good on a consumer's purchasing power.

Question 17

Figure 3-2  
-Refer to Figure 3-2.A decrease in the price of the product would be represented by a movement from

Accepted Answer

A) A to B. 
B) B to A. 
C) S1 to S2. 
D) S2 to S1. 
A) A to B. 
B) B to A. 
C) S1 to S2. 
D) S2 to S1.

Question 18

Figure 3-4  
-Refer to Figure 3-4.If the price is $10,

Accepted Answer

A) there would be a surplus of 600 units. 
B) there would be a shortage of 600 units. 
C) there would be a surplus of 200 units. 
D) there would be a shortage of 200 units. 
A) there would be a surplus of 600 units. 
B) there would be a shortage of 600 units. 
C) there would be a surplus of 200 units. 
D) there would be a shortage of 200 units.

Question 19

Figure 3-1  
-Refer to Figure 3-1.A decrease in the price of a substitute good 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 20

In June,buyers of titanium expect that the price of titanium will fall in July.What happens in the titanium market in June,holding everything else constant?

Accepted Answer

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

Figure 3-1 -Refer to Figure 3-1.A decrease in the price of the product would be represented by a movement from

Which of the following would cause both the equilibrium price and equilibrium quantity of cotton (assume that cotton is a normal good)to increase?

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

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

An increase in the price of pineapples will result in

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.

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?

How does the decreasing use of traditional cameras affect the market for traditional camera film?

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for almonds.Which panel best describes what happens in this market when there is an increase in the productivity of almond harvesters?

Which of the following statements is true?

Which of the following would shift the supply curve for MP3 players to the right?

Figure 3-4 -Refer to Figure 3-4.If the current market price is $15,the market will achieve equilibrium by

What is the law of supply? What does this law imply about the shape of the supply curve?

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

The income effect of a price change refers to the impact of a change in

Figure 3-2 -Refer to Figure 3-2.A decrease in the price of the product would be represented by a movement from

Figure 3-4 -Refer to Figure 3-4.If the price is $10,

Figure 3-1 -Refer to Figure 3-1.A decrease in the price of a substitute good would be represented by a movement from

In June,buyers of titanium expect that the price of titanium will fall in July.What happens in the titanium market in June,holding everything else constant?

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

Consumer Choice and Behavioural Economics

Technology, Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

The Markets 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 From: the Interaction of Demand and Supply

Figure 3-1 -Refer to Figure 3-1.A decrease in the price of the product would be represented by a movement from

Which of the following would cause both the equilibrium price and equilibrium quantity of cotton (assume that cotton is a normal good)to increase?

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

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

An increase in the price of pineapples will result in

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.

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?

How does the decreasing use of traditional cameras affect the market for traditional camera film?

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for almonds.Which panel best describes what happens in this market when there is an increase in the productivity of almond harvesters?

Which of the following statements is true?

Which of the following would shift the supply curve for MP3 players to the right?

Figure 3-4 -Refer to Figure 3-4.If the current market price is $15,the market will achieve equilibrium by

What is the law of supply? What does this law imply about the shape of the supply curve?

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

The income effect of a price change refers to the impact of a change in

Figure 3-2 -Refer to Figure 3-2.A decrease in the price of the product would be represented by a movement from

Figure 3-4 -Refer to Figure 3-4.If the price is $10,

Figure 3-1 -Refer to Figure 3-1.A decrease in the price of a substitute good would be represented by a movement from

In June,buyers of titanium expect that the price of titanium will fall in July.What happens in the titanium market in June,holding everything else constant?

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

Consumer Choice and Behavioural Economics

Technology, Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

The Markets 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