Question 1

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 2

Figure 3-4  
-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 3

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 4

Draw a supply and demand graph showing an equilibrium price of $50 and an equilibrium quantity of 200 units.Explain what would happen if the selling price was $75,and illustrate this on the graph.Explain what would happen if the selling price was $25,and illustrate this on the graph.Be sure to label each axis and curve on the graph.

Accepted Answer

The answer of Draw a supply and demand graph showing...

Question 5

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 6

Suppose that when the price of strawberries decreases,Simone increases her purchase of whipped cream.To Simone

Accepted Answer

A) strawberries and whipped cream are complements. 
B) strawberries and whipped cream and substitutes. 
C) strawberries and whipped cream are normal goods. 
D) strawberries are a normal good and whipped cream is an inferior good. 
A) strawberries and whipped cream are complements. 
B) strawberries and whipped cream and substitutes. 
C) strawberries and whipped cream are normal goods. 
D) strawberries are a normal good and whipped cream is an inferior good.

Question 7

In January,buyers of gold expect that the price of gold will rise in February.What happens in the gold market in January,holding all else constant?

Accepted Answer

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

Question 8

If in the market for peaches,the supply curve has shifted to the left

Accepted Answer

A) the supply of peaches has increased. 
B) the supply of peaches has decreased. 
C) the quantity of peaches supplied has increased. 
D) the quantity of peaches supplied has decreased. 
A) the supply of peaches has increased. 
B) the supply of peaches has decreased. 
C) the quantity of peaches supplied has increased. 
D) the quantity of peaches supplied has decreased.

Question 9

The supply curve for watches

Accepted Answer

A) shows the supply of watches consumers are willing and able to buy at any given price. 
B) is downward sloping. 
C) shows the relationship between the quantity of watches firms are willing and able to supply and the quantity of watches consumers are willing and able to purchase. 
D) shows the relationship between the price of watches and the quantity of watches supplied. 
A) shows the supply of watches consumers are willing and able to buy at any given price. 
B) is downward sloping. 
C) shows the relationship between the quantity of watches firms are willing and able to supply and the quantity of watches consumers are willing and able to purchase. 
D) shows the relationship between the price of watches and the quantity of watches supplied.

Question 10

An increase in the demand for lobster due to changes in consumer tastes,accompanied by a decrease in the supply of lobster as a result bad weather reducing the number of fishermen trapping lobster,will result in

Accepted Answer

A) a decrease in the equilibrium quantity of lobster and no change in the equilibrium price. 
B) an increase in the equilibrium price of lobster and no change in the equilibrium quantity. 
C) an increase in the equilibrium price of lobster;the equilibrium quantity may increase or decrease. 
D) a decrease in the equilibrium quantity of lobster;the equilibrium price may increase or decrease. 
A) a decrease in the equilibrium quantity of lobster and no change in the equilibrium price. 
B) an increase in the equilibrium price of lobster and no change in the equilibrium quantity. 
C) an increase in the equilibrium price of lobster;the equilibrium quantity may increase or decrease. 
D) a decrease in the equilibrium quantity of lobster;the equilibrium price may increase or decrease.

Question 11

Ranchers can raise either cattle or sheep on their land.Which of the following would cause the supply of sheep to increase?

Accepted Answer

A) an increase in the price of sheep 
B) a decrease in the price of cattle 
C) an increase in the demand for cattle 
D) an increase in the price of sheep feed 
A) an increase in the price of sheep 
B) a decrease in the price of cattle 
C) an increase in the demand for cattle 
D) an increase in the price of sheep feed

Question 12

Blu-ray players were introduced to the market in 2006,and new technology has allowed for the cost of manufacturing the players to decline significantly since the initial introduction.How did this change in technology affect the market for Blu-ray players?

Accepted Answer

A) The new technology caused an increase in the supply of Blu-ray players and a decrease in price of Blu-ray players. 
B) The new technology caused an increase in the supply of Blu-ray players and an increase in price of Blu-ray players. 
C) The new technology caused a decrease in the demand for Blu-ray players. 
D) The new technology caused an increase in the quantity of Blu-ray players supplied. 
A) The new technology caused an increase in the supply of Blu-ray players and a decrease in price of Blu-ray players. 
B) The new technology caused an increase in the supply of Blu-ray players and an increase in price of Blu-ray players. 
C) The new technology caused a decrease in the demand for Blu-ray players. 
D) The new technology caused an increase in the quantity of Blu-ray players supplied.

Question 13

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 14

Assume there is a shortage in the market for digital music players.Which of the following statements correctly describes this situation?

Accepted Answer

A) The demand for digital music players is greater than the supply of digital music players. 
B) Some consumers will be unable to obtain digital music players at the market price and will have an incentive to offer to buy the product at a higher price. 
C) The price of digital music players will rise in response to the shortage;as the price rises,the quantity demanded will increase and the quantity supplied will decrease. 
D) the shortage will cause an increase in the equilibrium price of digital music players. 
A) The demand for digital music players is greater than the supply of digital music players. 
B) Some consumers will be unable to obtain digital music players at the market price and will have an incentive to offer to buy the product at a higher price. 
C) The price of digital music players will rise in response to the shortage;as the price rises,the quantity demanded will increase and the quantity supplied will decrease. 
D) the shortage will cause an increase in the equilibrium price of digital music players.

Question 15

If an increase in income leads to in an increase in the demand for peanut butter,then peanut butter is

Accepted Answer

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

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Danielle Ocean pays for monthly pool maintenance for her home swimming pool.Last week the owner of the pool service informed Danielle that he will have to raise his monthly service fee because of increases in the price of pool chemicals.How is the market for pool maintenance services affected by this?

Accepted Answer

A) There is an increase in the supply of pool maintenance services. 
B) There is a decrease in the demand for pool maintenance services. 
C) There is a decrease in the quantity of pool maintenance services supplied. 
D) There is a decrease in the supply of pool maintenance services. 
A) There is an increase in the supply of pool maintenance services. 
B) There is a decrease in the demand for pool maintenance services. 
C) There is a decrease in the quantity of pool maintenance services supplied. 
D) There is a decrease in the supply of pool maintenance services.

Question 18

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

Accepted Answer

A) there would be a surplus of 300 units. 
B) there would be a shortage of 300 units. 
C) there would be a surplus of 400 units. 
D) there would be a shortage of 400 units. 
A) there would be a surplus of 300 units. 
B) there would be a shortage of 300 units. 
C) there would be a surplus of 400 units. 
D) there would be a shortage of 400 units.

Question 19

Figure 3-3  
-Refer to Figure 3-3.The figure above shows the supply and demand curves for two markets: the market for original Picasso paintings and the market for designer jeans.Which graph most likely represents which market?

Accepted Answer

A) Graph B represents the market for original Picasso paintings and Graph A represents the market for designer jeans. 
B) Graph A represents the market for original Picasso paintings and Graph B represents the market for designer jeans. 
C) Graph A represents both the market for original Picasso paintings and designer jeans. 
D) Graph B represents both the market for original Picasso paintings and designer jeans. 
A) Graph B represents the market for original Picasso paintings and Graph A represents the market for designer jeans. 
B) Graph A represents the market for original Picasso paintings and Graph B represents the market for designer jeans. 
C) Graph A represents both the market for original Picasso paintings and designer jeans. 
D) Graph B represents both the market for original Picasso paintings and designer jeans.

Question 20

In October,market analysts predict that the price of platinum will fall in November.What happens in the platinum market in October,holding everything else constant?

Accepted Answer

A) The supply curve shifts to the right. 
B) The supply curve shifts to the left. 
C) The quantity demanded and the quantity supplied of platinum increase. 
D) The demand curve shifts to the right. 
A) The supply curve shifts to the right. 
B) The supply curve shifts to the left. 
C) The quantity demanded and the quantity supplied of platinum increase. 
D) The demand curve shifts to the right.

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

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

A decrease in the price of GPS systems will result in

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

Suppose that when the price of strawberries decreases,Simone increases her purchase of whipped cream.To Simone

In January,buyers of gold expect that the price of gold will rise in February.What happens in the gold market in January,holding all else constant?

If in the market for peaches,the supply curve has shifted to the left

The supply curve for watches

An increase in the demand for lobster due to changes in consumer tastes,accompanied by a decrease in the supply of lobster as a result bad weather reducing the number of fishermen trapping lobster,will result in

Ranchers can raise either cattle or sheep on their land.Which of the following would cause the supply of sheep to increase?

Blu-ray players were introduced to the market in 2006,and new technology has allowed for the cost of manufacturing the players to decline significantly since the initial introduction.How did this change in technology affect the market for Blu-ray players?

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

Assume there is a shortage in the market for digital music players.Which of the following statements correctly describes this situation?

If an increase in income leads to in an increase in the demand for peanut butter,then peanut butter is

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

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

Figure 3-3 -Refer to Figure 3-3.The figure above shows the supply and demand curves for two markets: the market for original Picasso paintings and the market for designer jeans.Which graph most likely represents which market?

In October,market analysts predict that the price of platinum will fall in November.What happens in the platinum market in October,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

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

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

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

A decrease in the price of GPS systems will result in

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

Suppose that when the price of strawberries decreases,Simone increases her purchase of whipped cream.To Simone

In January,buyers of gold expect that the price of gold will rise in February.What happens in the gold market in January,holding all else constant?

If in the market for peaches,the supply curve has shifted to the left

The supply curve for watches

An increase in the demand for lobster due to changes in consumer tastes,accompanied by a decrease in the supply of lobster as a result bad weather reducing the number of fishermen trapping lobster,will result in

Ranchers can raise either cattle or sheep on their land.Which of the following would cause the supply of sheep to increase?

Blu-ray players were introduced to the market in 2006,and new technology has allowed for the cost of manufacturing the players to decline significantly since the initial introduction.How did this change in technology affect the market for Blu-ray players?

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

Assume there is a shortage in the market for digital music players.Which of the following statements correctly describes this situation?

If an increase in income leads to in an increase in the demand for peanut butter,then peanut butter is

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

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

Figure 3-3 -Refer to Figure 3-3.The figure above shows the supply and demand curves for two markets: the market for original Picasso paintings and the market for designer jeans.Which graph most likely represents which market?

In October,market analysts predict that the price of platinum will fall in November.What happens in the platinum market in October,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