Question 1

A decrease in the number of firms in a market will cause supply to increase.

Accepted Answer

A) True 
 B)False

Question 2

Figure 3-5  
-Refer to Figure 3-5.In a free market such as that depicted above,a shortage is eliminated 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

An increase in the demand for peanuts due to changes in consumer tastes,accompanied by an increase in the supply of peanuts as a result of favorable growing conditions,will result in

Accepted Answer

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

Question 4

Which of the following is evidence of a shortage of chocolate?

Accepted Answer

A) Firms lower the price of chocolate. 
B) The price of chocolate is raised in order to increase sales. 
C) The equilibrium price of chocolate falls due to a decrease in demand. 
D) The quantity of chocolate demanded is greater than the quantity supplied. 
A) Firms lower the price of chocolate. 
B) The price of chocolate is raised in order to increase sales. 
C) The equilibrium price of chocolate falls due to a decrease in demand. 
D) The quantity of chocolate demanded is greater than the quantity supplied.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

What would happen in the market for knee replacement surgery if insurance companies started to cover a smaller portion of the cost of the surgery,and fewer doctors decide to enter the field of joint replacement surgery?

Accepted Answer

A) Demand will decrease,but this will not shift the supply curve. 
B) Supply will decrease,but this will not shift the demand curve. 
C) Demand and supply will both decrease. 
D) Demand will decrease and supply will increase. 
A) Demand will decrease,but this will not shift the supply curve. 
B) Supply will decrease,but this will not shift the demand curve. 
C) Demand and supply will both decrease. 
D) Demand will decrease and supply will increase.

Question 7

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

Accepted Answer

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

Question 8

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 9

If the price of smartphones was to increase,then

Accepted Answer

A) the demand for smartphone apps would decrease. 
B) the demand for smartphone apps would increase. 
C) the quantity of smartphone apps demanded would increase. 
D) the quantity of smartphone apps demanded would decrease. 
A) the demand for smartphone apps would decrease. 
B) the demand for smartphone apps would increase. 
C) the quantity of smartphone apps demanded would increase. 
D) the quantity of smartphone apps demanded would decrease.

Question 10

Figure 3-1  
-Refer to Figure 3-1.An increase in taste or preference 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 11

"Because Coke and Pepsi are substitutes,a decrease in the price of Pepsi will cause the demand for Coke to decrease.This initial shift in demand for Coke results in a lower price for Coke;this lower price will cause the demand curve for Coke to shift to the left." Which of the following correctly comments on this statement?

Accepted Answer

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

Question 12

Which of the following would cause an increase in the supply of cheese?

Accepted Answer

A) a decrease in the price of wine (assuming that cheese and wine are complements) 
B) an increase in the price of cheese 
C) an increase the price of a product that producers sell instead of cheese 
D) an increase in the number of firms that produce cheese 
A) a decrease in the price of wine (assuming that cheese and wine are complements) 
B) an increase in the price of cheese 
C) an increase the price of a product that producers sell instead of cheese 
D) an increase in the number of firms that produce cheese

Question 13

Suppose that when the price of oranges decreases,Sarita decreases her purchases of peaches.To Sarita,

Accepted Answer

A) oranges and peaches are complements. 
B) oranges and peaches are inferior goods. 
C) oranges and peaches are normal goods. 
D) oranges and peaches are substitutes. 
A) oranges and peaches are complements. 
B) oranges and peaches are inferior goods. 
C) oranges and peaches are normal goods. 
D) oranges and peaches are substitutes.

Question 14

Assume that the hourly price for the services of personal trainers has risen and sales of these services have also risen.One can conclude that

Accepted Answer

A) the law of demand has been violated. 
B) the number of personal trainers has increased. 
C) the demand for personal trainers has increased. 
D) personal trainers are deliberately charging high prices because they provide services for wealthy clients. 
A) the law of demand has been violated. 
B) the number of personal trainers has increased. 
C) the demand for personal trainers has increased. 
D) personal trainers are deliberately charging high prices because they provide services for wealthy clients.

Question 15

Peanut butter and jelly are complements.If the price of peanut butter increases,the demand for jelly will increase.

Accepted Answer

A) True 
 B)False

Question 16

The ________ effect of a price change refers to the impact of a change in the price of a good on a consumer's purchasing power.

Accepted Answer

A) income 
B) substitution 
C) demographics 
D) ceteris paribus 
A) income 
B) substitution 
C) demographics 
D) ceteris paribus

Question 17

Electric car manufacturers want to sell more electric cars at a higher price.Which of the following events would have this effect?

Accepted Answer

A) technological advancement in the production of electric car batteries. 
B) an increase in the number of manufacturers of electric cars. 
C) a decrease in the price of lithium,which is used in the electric car batteries. 
D) an increase in the price of gasoline. 
A) technological advancement in the production of electric car batteries. 
B) an increase in the number of manufacturers of electric cars. 
C) a decrease in the price of lithium,which is used in the electric car batteries. 
D) an increase in the price of gasoline.

Question 18

Figure 3-1  
-Refer to Figure 3-1.An increase in the price of a complement 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 19

It is possible for a market for a good to experience a surplus and a shortage at the same time.

Accepted Answer

A) True 
 B)False

Question 20

The market for smartwatches is becoming very competitive.The increase in competition in this market is an example of how the market responds to

Accepted Answer

A) changes in consumer tastes. 
B) increases in income. 
C) changes in population. 
D) decreases in the price of smartphones (a substitute for the product). 
A) changes in consumer tastes. 
B) increases in income. 
C) changes in population. 
D) decreases in the price of smartphones (a substitute for the product).

A decrease in the number of firms in a market will cause supply to increase.

Figure 3-5 -Refer to Figure 3-5.In a free market such as that depicted above,a shortage is eliminated by

An increase in the demand for peanuts due to changes in consumer tastes,accompanied by an increase in the supply of peanuts as a result of favorable growing conditions,will result in

Which of the following is evidence of a shortage of chocolate?

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

What would happen in the market for knee replacement surgery if insurance companies started to cover a smaller portion of the cost of the surgery,and fewer doctors decide to enter the field of joint replacement surgery?

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

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

If the price of smartphones was to increase,then

Figure 3-1 -Refer to Figure 3-1.An increase in taste or preference would be represented by a movement from

Which of the following would cause an increase in the supply of cheese?

Suppose that when the price of oranges decreases,Sarita decreases her purchases of peaches.To Sarita,

Assume that the hourly price for the services of personal trainers has risen and sales of these services have also risen.One can conclude that

Peanut butter and jelly are complements.If the price of peanut butter increases,the demand for jelly will increase.

The ________ effect of a price change refers to the impact of a change in the price of a good on a consumer's purchasing power.

Electric car manufacturers want to sell more electric cars at a higher price.Which of the following events would have this effect?

Figure 3-1 -Refer to Figure 3-1.An increase in the price of a complement would be represented by a movement from

It is possible for a market for a good to experience a surplus and a shortage at the same time.

The market for smartwatches is becoming very competitive.The increase in competition in this market is an example of how the market responds to

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

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

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

A decrease in the number of firms in a market will cause supply to increase.

Figure 3-5 -Refer to Figure 3-5.In a free market such as that depicted above,a shortage is eliminated by

An increase in the demand for peanuts due to changes in consumer tastes,accompanied by an increase in the supply of peanuts as a result of favorable growing conditions,will result in

Which of the following is evidence of a shortage of chocolate?

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

What would happen in the market for knee replacement surgery if insurance companies started to cover a smaller portion of the cost of the surgery,and fewer doctors decide to enter the field of joint replacement surgery?

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

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

If the price of smartphones was to increase,then

Figure 3-1 -Refer to Figure 3-1.An increase in taste or preference would be represented by a movement from

Which of the following would cause an increase in the supply of cheese?

Suppose that when the price of oranges decreases,Sarita decreases her purchases of peaches.To Sarita,

Assume that the hourly price for the services of personal trainers has risen and sales of these services have also risen.One can conclude that

Peanut butter and jelly are complements.If the price of peanut butter increases,the demand for jelly will increase.

The ________ effect of a price change refers to the impact of a change in the price of a good on a consumer's purchasing power.

Electric car manufacturers want to sell more electric cars at a higher price.Which of the following events would have this effect?

Figure 3-1 -Refer to Figure 3-1.An increase in the price of a complement would be represented by a movement from

It is possible for a market for a good to experience a surplus and a shortage at the same time.

The market for smartwatches is becoming very competitive.The increase in competition in this market is an example of how the market responds to

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

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