Question 1

If the price of airline travel in Europe falls and the demand for train travel in Europe also falls,then the two goods are

Accepted Answer

A) complements. 
B) normal goods. 
C) substitutes. 
D) inferior goods. 
A) complements. 
B) normal goods. 
C) substitutes. 
D) inferior goods.

Question 2

An increase in the price of corn will lead to

Accepted Answer

A) an upward (and leftward)movement along the demand curve for corn. 
B) a leftward shift in the demand curve for corn. 
C) a rightward shift in the supply curve for corn. 
D) an increase in the quantity of corn consumed. 
A) an upward (and leftward)movement along the demand curve for corn. 
B) a leftward shift in the demand curve for corn. 
C) a rightward shift in the supply curve for corn. 
D) an increase in the quantity of corn consumed.

Question 3

If the price of a product increases,we would expect

Accepted Answer

A) the level of demand to decrease. 
B) quantity supplied to increase. 
C) the level of supply to increase. 
D) an increase in quantity demanded. 
A) the level of demand to decrease. 
B) quantity supplied to increase. 
C) the level of supply to increase. 
D) an increase in quantity demanded.

Question 4

Which of the following will shift today's supply curve to the right?

Accepted Answer

A) Input prices rise. 
B) Sales taxes increase. 
C) Prices are expected to be higher in the future. 
D) Prices are expected to be lower in the future. 
A) Input prices rise. 
B) Sales taxes increase. 
C) Prices are expected to be higher in the future. 
D) Prices are expected to be lower in the future.

Question 5

-Refer to the above figure.A movement from point A to point B for a good is most likely a result of

Accepted Answer

A) an increase in the price of that good. 
B) a decrease in the price of that good. 
C) an expectation of an increase in the relative price of that good. 
D) an expectation of a decrease in the relative price of that good. 
A) an increase in the price of that good. 
B) a decrease in the price of that good. 
C) an expectation of an increase in the relative price of that good. 
D) an expectation of a decrease in the relative price of that good.

Question 6

When income falls,

Accepted Answer

A) the demand for a normal goods rises. 
B) the demand for an inferior goods rises. 
C) there is a movement downward along the demand curve for a normal good. 
D) there is a movement downward along the demand curve for an inferior good. 
A) the demand for a normal goods rises. 
B) the demand for an inferior goods rises. 
C) there is a movement downward along the demand curve for a normal good. 
D) there is a movement downward along the demand curve for an inferior good.

Question 7

-In the above figure,what are the equilibrium price and quantity?

Accepted Answer

A) $40 and 200 units 
B) $50 and 100 units 
C) $10 and 200 units 
D) $30 and 100 units 
A) $40 and 200 units 
B) $50 and 100 units 
C) $10 and 200 units 
D) $30 and 100 units

Question 8

The relationship between quantity supplied and the price of output is such that

Accepted Answer

A) an increase in quantity will automatically lead to a reduction in price. 
B) an increase in price will lead to an increase in quantity supplied. 
C) an increase in price will produce an inward shift in the supply curve. 
D) quantity will decrease as the number of firms increases. 
A) an increase in quantity will automatically lead to a reduction in price. 
B) an increase in price will lead to an increase in quantity supplied. 
C) an increase in price will produce an inward shift in the supply curve. 
D) quantity will decrease as the number of firms increases.

Question 9

Which of the following would likely cause an increase in the supply of espresso coffee makers?

Accepted Answer

A) an increase in the number of business firms demanding espresso makers 
B) an increase in the price of espresso makers 
C) an increase in the cost of manufacturing espresso makers 
D) a widespread expectation that the price of espresso makers will fall in the future 
A) an increase in the number of business firms demanding espresso makers 
B) an increase in the price of espresso makers 
C) an increase in the cost of manufacturing espresso makers 
D) a widespread expectation that the price of espresso makers will fall in the future

Question 10

Mary increases her consumption of Good X after the price of Good Y decreased.For Mary

Accepted Answer

A) Good X and Good Y are substitutes. 
B) Good X and Good Y are complements. 
C) Good X is an inferior good. 
D) Good Y is an inferior good. 
A) Good X and Good Y are substitutes. 
B) Good X and Good Y are complements. 
C) Good X is an inferior good. 
D) Good Y is an inferior good.

Question 11

If the price of oil rises,producers of oil will

Accepted Answer

A) increase the quantity of oil supplied. 
B) supply less oil. 
C) leave the amount of oil supplied unchanged. 
D) cut the price. 
A) increase the quantity of oil supplied. 
B) supply less oil. 
C) leave the amount of oil supplied unchanged. 
D) cut the price.

Question 12

Which of the following does NOT cause a rightward shift in the supply curve?

Accepted Answer

A) a reduction in resource costs 
B) an increase in technology 
C) a reduction in the price of the good 
D) a reduction in the expected future price of the good 
A) a reduction in resource costs 
B) an increase in technology 
C) a reduction in the price of the good 
D) a reduction in the expected future price of the good

Question 13

The relationship between a change in the price of a complementary good and demand for another complementary good is

Accepted Answer

A) positive. 
B) negative. 
C) inconclusive. 
D) zero. 
A) positive. 
B) negative. 
C) inconclusive. 
D) zero.

Question 14

How is the equilibrium price determined? What happens if the price is above the equilibrium price? What happens if the price is below the equilibrium price?

Accepted Answer

The equilibrium price is determined by t

Question 15

The price of a new textbook increases from $75 to $90 while the price of used copies of the textbook increases from $50 to $65.Other things equal,we would expect to observe

Accepted Answer

A) the quantity demanded of the used textbook to increase while the quantity demanded of the new textbook to fall. 
B) the quantity demanded of both to fall. 
C) the demand for the new textbook to increase while the demand for the used textbook to decrease. 
D) the quantity demanded of the used textbook to decrease and the quantity demanded of the new textbook to increase. 
A) the quantity demanded of the used textbook to increase while the quantity demanded of the new textbook to fall. 
B) the quantity demanded of both to fall. 
C) the demand for the new textbook to increase while the demand for the used textbook to decrease. 
D) the quantity demanded of the used textbook to decrease and the quantity demanded of the new textbook to increase.

Question 16

The price of an MP3 music player increased from $50 to $70 while the price of a music download increased from $1 to $2.The relative price of an MP3 music player in terms of music downloads

Accepted Answer

A) increased from 0.04 to 0.05. 
B) decreased from 50 to 35. 
C) increased,but we need more information to know by how much. 
D) decreased,but we need more information to know by how much. 
A) increased from 0.04 to 0.05. 
B) decreased from 50 to 35. 
C) increased,but we need more information to know by how much. 
D) decreased,but we need more information to know by how much.

Question 17

Suppose a concert by Lady Gaga and a basketball game played by the L.A.Lakers are substitutes,then which of the following is true?

Accepted Answer

A) If the price of a ticket to a Lakers game increases,then the demand for Lady Gaga tickets will fall. 
B) If the price of a ticket to a Lakers game decreases,the quantity of Lakers tickets demanded will increase. 
C) If the price of a ticket to a Lakers game increases,then the demand for Lady Gaga tickets will remain unchanged. 
D) The price of a ticket to a Lakers game will always equal the price of a ticket to a Lady Gaga concert. 
A) If the price of a ticket to a Lakers game increases,then the demand for Lady Gaga tickets will fall. 
B) If the price of a ticket to a Lakers game decreases,the quantity of Lakers tickets demanded will increase. 
C) If the price of a ticket to a Lakers game increases,then the demand for Lady Gaga tickets will remain unchanged. 
D) The price of a ticket to a Lakers game will always equal the price of a ticket to a Lady Gaga concert.

Question 18

What happens as the result of a shortage?

Accepted Answer

A) There is downward pressure on prices. 
B) There is upward pressure on prices. 
C) Consumers begin to view the good as an inferior good because they have a hard time finding it. 
D) Supply of the good decreases. 
A) There is downward pressure on prices. 
B) There is upward pressure on prices. 
C) Consumers begin to view the good as an inferior good because they have a hard time finding it. 
D) Supply of the good decreases.

Question 19

An increase in quantity demanded is caused by

Accepted Answer

A) an increase in income. 
B) a decrease in the price of the good. 
C) a decrease in the price of a complement. 
D) a change in expectations about price in the future. 
A) an increase in income. 
B) a decrease in the price of the good. 
C) a decrease in the price of a complement. 
D) a change in expectations about price in the future.

Question 20

-Refer to the above figure.At a price of four cents,a(n)________ of bubble gum will exist in the market.

Accepted Answer

A) surplus 
B) shortage 
C) excess quantity demanded 
D) equilibrium quantity 
A) surplus 
B) shortage 
C) excess quantity demanded 
D) equilibrium quantity

Exam 3: Demand and Supply

If the price of airline travel in Europe falls and the demand for train travel in Europe also falls,then the two goods are

An increase in the price of corn will lead to

If the price of a product increases,we would expect

Which of the following will shift today's supply curve to the right?

-Refer to the above figure.A movement from point A to point B for a good is most likely a result of

When income falls,

-In the above figure,what are the equilibrium price and quantity?

The relationship between quantity supplied and the price of output is such that

Which of the following would likely cause an increase in the supply of espresso coffee makers?

Mary increases her consumption of Good X after the price of Good Y decreased.For Mary

If the price of oil rises,producers of oil will

Which of the following does NOT cause a rightward shift in the supply curve?

The relationship between a change in the price of a complementary good and demand for another complementary good is

How is the equilibrium price determined? What happens if the price is above the equilibrium price? What happens if the price is below the equilibrium price?

The price of a new textbook increases from $75 to $90 while the price of used copies of the textbook increases from $50 to $65.Other things equal,we would expect to observe

The price of an MP3 music player increased from $50 to $70 while the price of a music download increased from $1 to $2.The relative price of an MP3 music player in terms of music downloads

Suppose a concert by Lady Gaga and a basketball game played by the L.A.Lakers are substitutes,then which of the following is true?

What happens as the result of a shortage?

An increase in quantity demanded is caused by

-Refer to the above figure.At a price of four cents,a(n)________ of bubble gum will exist in the market.

The Nature of Economics

Scarcity and the World of Trade-Offs

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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