Question 1

Figure 3-2  
-Refer to Figure 3-2.A decrease in productivity 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 2

A change in which variable will change the market demand for a product?

Accepted Answer

A) the price of the product 
B) expected future prices 
C) the number of firms in the market 
D) the quantity of the product supplied 
A) the price of the product 
B) expected future prices 
C) the number of firms in the market 
D) the quantity of the product supplied

Question 3

"The price of digital cameras fell because of improvements in production technology.As a result,the demand for non-digital cameras decreased.This caused the price of non-digital cameras to fall;as the price of non-digital cameras fell the demand for non-digital cameras decreased even further." Evaluate this statement.

Accepted Answer

A) The statement is false because the demand for non-digital cameras would increase as the price of digital cameras fell. 
B) The statement is false.A decrease in the price of digital cameras would decrease the demand for non-digital cameras,but a decrease in the price of non-digital cameras would not cause the demand for non-digital cameras to decrease. 
C) The statement is false because it confuses the law of demand with the law of supply. 
D) The statement is false because digital camera producers would not reduce their prices as a result of improvements in technology;doing so would reduce their profits. 
A) The statement is false because the demand for non-digital cameras would increase as the price of digital cameras fell. 
B) The statement is false.A decrease in the price of digital cameras would decrease the demand for non-digital cameras,but a decrease in the price of non-digital cameras would not cause the demand for non-digital cameras to decrease. 
C) The statement is false because it confuses the law of demand with the law of supply. 
D) The statement is false because digital camera producers would not reduce their prices as a result of improvements in technology;doing so would reduce their profits.

Question 4

If the price of gasoline 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

Cole was discussing the market for cocoa beans with his friend John Schmidt.Cole said,"Ever since Venezuela announced that its cocoa harvest was its lowest ever in fifteen years,the price of cocoa beans has been rising and rising and people are buying more and more.I think the demand for cocoa beans must be upward sloping." Is Cole right? Briefly explain why or why not.

Accepted Answer

Cole has confused a change in demand as

Question 6

Figure 3-7  
-Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for blu-ray discs.Which panel best describes what happens in this market if there is a substantial increase in the price of blu-ray players?

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 7

The growing popularity of energy conservation has enticed large home improvement stores like Home Depot and Lowes to offer tankless water heaters.How does the fact that home improvement stores now offer these products affect the tankless water heater market?

Accepted Answer

A) The demand curve for tankless water heaters shifts to the right. 
B) The demand curve for tankless water heaters shifts to the left. 
C) The supply curve for tankless water heaters shifts to the right. 
D) The supply curve for tankless water heaters shifts to the left. 
A) The demand curve for tankless water heaters shifts to the right. 
B) The demand curve for tankless water heaters shifts to the left. 
C) The supply curve for tankless water heaters shifts to the right. 
D) The supply curve for tankless water heaters shifts to the left.

Question 8

What are the five most important variables that shift the market supply curve?

Accepted Answer

Prices of inputs;Technological

Question 9

The substitution effect of a price change refers to

Accepted Answer

A) the change in quantity demanded that results from a change in price making a good more or less expensive relative to other goods that are substitutes. 
B) the shift of a demand curve when the price of a substitute good changes. 
C) the movement along the demand curve due to a change in purchasing power brought about by the price change. 
D) the shift in the demand curve due to a change in purchasing power brought about by the price change. 
A) the change in quantity demanded that results from a change in price making a good more or less expensive relative to other goods that are substitutes. 
B) the shift of a demand curve when the price of a substitute good changes. 
C) the movement along the demand curve due to a change in purchasing power brought about by the price change. 
D) the shift in the demand curve due to a change in purchasing power brought about by the price change.

Question 10

From a supply perspective,what impact would an increase in the price of motorcycles have on the market for motorcycles?

Accepted Answer

An increase in the price of mo

Question 11

At market equilibrium

Accepted Answer

A) demand equals supply. 
B) quantity demanded equals quantity supplied. 
C) surpluses are greater than shortages. 
D) shortages are greater than surpluses. 
A) demand equals supply. 
B) quantity demanded equals quantity supplied. 
C) surpluses are greater than shortages. 
D) shortages are greater than surpluses.

Question 12

A(n)________ is represented by a rightward shift of the demand curve while a(n)________ is represented by a movement along a given demand curve.

Accepted Answer

A) increase in demand;decrease in demand 
B) increase in demand;increase in quantity demanded 
C) decrease in demand;decrease in quantity demanded 
D) increase in quantity demanded;increase in demand 
A) increase in demand;decrease in demand 
B) increase in demand;increase in quantity demanded 
C) decrease in demand;decrease in quantity demanded 
D) increase in quantity demanded;increase in demand

Question 13

At a product's equilibrium price

Accepted Answer

A) anyone who needs the product will be able to buy the product,regardless of ability to pay. 
B) the federal government will provide the product to anyone who cannot afford it. 
C) not all sellers who are willing to accept the price will find buyers for their products. 
D) any buyer who is willing and able to pay the price will find a seller for the product. 
A) anyone who needs the product will be able to buy the product,regardless of ability to pay. 
B) the federal government will provide the product to anyone who cannot afford it. 
C) not all sellers who are willing to accept the price will find buyers for their products. 
D) any buyer who is willing and able to pay the price will find a seller for the product.

Question 14

In 2004,hurricanes destroyed a large portion of Florida's grapefruit crop.How did this affect the market price and market quantity of grapefruit?

Accepted Answer

The supply curve for grapefrui

Question 15

If consumers believe the price of hybrid vehicles will decrease in the future,this will cause the demand for hybrid vehicles to decrease now.

Accepted Answer

A) True 
 B)False

Question 16

Figure 3-1  
-Refer to Figure 3-1.A decrease in the price of a complementary 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 17

When the price of a good rises,consumers buy a smaller quantity because of the ________ effect and the ________ effect.

Accepted Answer

A) substitution;income 
B) normal;inferior 
C) substitute;complement 
D) supply;demand 
A) substitution;income 
B) normal;inferior 
C) substitute;complement 
D) supply;demand

Question 18

Figure 3-4  
-Refer to Figure 3-4.At a price of $10,how many units will be sold?

Accepted Answer

A) 200 
B) 400 
C) 600 
D) 800 
A) 200 
B) 400 
C) 600 
D) 800

Question 19

Suppose consumer preference for beef starts to rise while the cost of raising beef continues to rise.In the market for beef,this would be represented by the equilibrium price ________ and the equilibrium quantity ________.

Accepted Answer

A) increasing;increasing or decreasing 
B) decreasing;increasing or decreasing 
C) increasing or decreasing;increasing 
D) increasing or decreasing;decreasing 
A) increasing;increasing or decreasing 
B) decreasing;increasing or decreasing 
C) increasing or decreasing;increasing 
D) increasing or decreasing;decreasing

Question 20

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 an increase 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 an increase in the number of firms producing the product.

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

Figure 3-2 -Refer to Figure 3-2.A decrease in productivity would be represented by a movement from

A change in which variable will change the market demand for a product?

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

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for blu-ray discs.Which panel best describes what happens in this market if there is a substantial increase in the price of blu-ray players?

The growing popularity of energy conservation has enticed large home improvement stores like Home Depot and Lowes to offer tankless water heaters.How does the fact that home improvement stores now offer these products affect the tankless water heater market?

What are the five most important variables that shift the market supply curve?

The substitution effect of a price change refers to

From a supply perspective,what impact would an increase in the price of motorcycles have on the market for motorcycles?

At market equilibrium

A(n)________ is represented by a rightward shift of the demand curve while a(n)________ is represented by a movement along a given demand curve.

At a product's equilibrium price

In 2004,hurricanes destroyed a large portion of Florida's grapefruit crop.How did this affect the market price and market quantity of grapefruit?

If consumers believe the price of hybrid vehicles will decrease in the future,this will cause the demand for hybrid vehicles to decrease now.

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

When the price of a good rises,consumers buy a smaller quantity because of the ________ effect and the ________ effect.

Figure 3-4 -Refer to Figure 3-4.At a price of $10,how many units will be sold?

Suppose consumer preference for beef starts to rise while the cost of raising beef continues to rise.In the market for beef,this would be represented by the equilibrium price ________ and the equilibrium quantity ________.

A decrease in the equilibrium quantity for a product will result

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms,the Stock Market,and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, taxes, and the Distribution of Income

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

A(n) is represented by a rightward shift of the demand curve while a(n) is represented by a movement along a given demand curve.

When the price of a good rises,consumers buy a smaller quantity because of the effect and the effect.

Suppose consumer preference for beef starts to rise while the cost of raising beef continues to rise.In the market for beef,this would be represented by the equilibrium price and the equilibrium quantity .