Question 1

Figure 3-5 
-Refer to Figure 3-5. At a price of $15, the quantity sold

Accepted Answer

A)  is 2 units. 
B)  is 4 units. 
C)  is 6 units. 
D)  cannot be determined.

Question 2

Figure 3-4 
-Refer to Figure 3-4. If the price is $20

Accepted Answer

A)  there is a surplus of 600 units. 
B)  there is a shortage of 600 units. 
C)  quantity demanded is zero. 
D)  the market is in equilibrium.

Question 3

The supply curve for umbrellas

Accepted Answer

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

Question 4

The decline in the popularity of clothing made from animal fur has enticed large department stores like J. C. Penney and Sears to discontinue sales of animal-fur products. How does discontinuing sales of these products by J.C. Penney and Sears affect the animal-fur clothing market?

Accepted Answer

A)  The demand curve for animal-fur clothing shifts to the right. 
B)  The demand curve for animal-fur clothing shifts to the left. 
C)  The supply curve for animal-fur clothing shifts to the right. 
D)  The supply curve for animal-fur clothing shifts to the left.

Question 5

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

Accepted Answer

A)  both the equilibrium price and quantity of MP3 players will increase. 
B)  the equilibrium price of MP3 players will increase; the equilibrium quantity may increase or decrease. 
C)  the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will increase. 
D)  the equilibrium price of MP3 players will decrease; the equilibrium quantity may increase or decrease.

Question 6

If the demand curve for a product shifts to the right and the supply curve for the product shifts to the left, equilibrium price and equilibrium quantity will both increase.

Accepted Answer

A) True 
 B)False

Question 7

Would a change in the price of in-line skates cause a change in the supply of in-line skates? Why or why not?

Accepted Answer

The answer of Would a change in the price of...

Question 8

Assume that California Merlot is a normal good. Prices of California Merlot have risen steadily in recent years. Over this same period, prices for French oak barrels used for wine storage have dropped and consumer incomes have risen. Which of the following best explains the rising prices of California Merlots?

Accepted Answer

A)  The supply curve for Merlot has shifted to the right while the demand curve for Merlot has shifted to the left. 
B)  The demand curve for Merlot has shifted to the right more than the supply curve has shifted to the right. 
C)  The demand curve and the supply curve for Merlot have both shifted to the left. 
D)  The supply curve for Merlot has shifted to the right more than the demand curve has shifted to the right.

Question 9

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.

Question 10

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.

Question 11

In October 2005, the U.S. Fish and Wildlife Service banned the importation of beluga caviar, the most prized of caviars, from the Caspian Sea. What happened in the market for caviar in the United States?

Accepted Answer

A)  The supply curve shifted to the left. 
B)  The supply curve shifted to the right. 
C)  The demand curve shifted to the right. 
D)  The demand curve shifted to the left.

Question 12

Using Richard Tedlow's "three phases of marketing", the premium bottled water industry is probably in

Accepted Answer

A)  the first phase, where a very large number of firms are each producing a relatively small volume of premium bottled water. 
B)  the second phase, where one or a few brands have attained high market shares by selling a large number of bottles of premium water at lower prices. 
C)  the third phase, where the dominant firms have rapidly introduced a large number of premium bottled water varieties. 
D)  The market for premium bottled water is too young to categorize using the "three phases of marketing".

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 a shortage of apples, how will the equilibrium point change?

Accepted Answer

A)  The equilibrium point will move from A to B. 
B)  The equilibrium point will move from A to C. 
C)  There will be no change in the equilibrium point. 
D)  The equilibrium point will move from A to E.

Question 14

Assume that the price for swimming pool maintenance services has risen and sales of these services have fallen. One can conclude that

Accepted Answer

A)  the law of supply has been violated. 
B)  the demand for swimming pool maintenance services has increased. 
C)  the supply of swimming pool maintenance services has decreased. 
D)  swimming pool maintenance services are becoming more technologically advanced.

Question 15

Figure 3-7 
-Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for tuna. Which panel best describes what happens in this market when there is a decrease in the productivity of commercial fishermen?

Accepted Answer

A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d)

Question 16

A decrease in the price of pork will result in

Accepted Answer

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

Question 17

Table 3-6
 
-Refer to Table 3-6. The table contains information about the sorghum market. Use the table to answer the following questions.
a. What are the equilibrium price and quantity of sorghum?
b. Suppose the prevailing price is $6 per bushel. Is there a shortage or a surplus in the market?
c. What is the quantity of the shortage or surplus?
d. How many bushels will be sold if the market price is $6 per bushel?
e. If the market price is $6 per bushel, what must happen to restore equilibrium in the market?
f. At what price will suppliers be able to sell 36,000 bushels of sorghum?
g. Suppose the market price is $14 per bushel. Is there a shortage or a surplus in the market?
h. What is the quantity of the shortage or surplus?
i. How many bushels will be sold if the market price is $14 per bushel?
j. If the market price is $14 per bushel, what must happen to restore equilibrium in the market?

Accepted Answer

The answer of Table 3-6
 
-Refer to Table 3-6. The...

Question 18

Harvey Rabbitt pays for monthly cable TV service. Last week, the cable company informed Harvey that his monthly cable price would go down because the city council has granted approval for three new cable companies to service his area. How is the market for cable TV services affected by this?

Accepted Answer

A)  There is an increase in the supply of cable TV service. 
B)  There is a decrease in the demand for cable TV service. 
C)  There is a decrease in the quantity of cable TV service supplied. 
D)  There is a decrease in the supply of cable TV service.

Question 19

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.

Question 20

Due to wildfires in Northern California, agricultural experts predict a 30 percent decline in this year's grape harvest. What happens in the California wine market as a result of this announcement?

Accepted Answer

A)  The demand curve for California wine shifts to the left in anticipation of higher prices in the future. 
B)  The demand curve for California wine shifts to the right in anticipation of higher prices in the future. 
C)  The supply curve for California wine shifts to the right in anticipation of higher prices in the future. 
D)  The supply curve for California wine shifts to the left in anticipation of lower quantities in the future.

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

Figure 3-5 -Refer to Figure 3-5. At a price of $15, the quantity sold

Figure 3-4 -Refer to Figure 3-4. If the price is $20

The supply curve for umbrellas

The decline in the popularity of clothing made from animal fur has enticed large department stores like J. C. Penney and Sears to discontinue sales of animal-fur products. How does discontinuing sales of these products by J.C. Penney and Sears affect the animal-fur clothing market?

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

If the demand curve for a product shifts to the right and the supply curve for the product shifts to the left, equilibrium price and equilibrium quantity will both increase.

Would a change in the price of in-line skates cause a change in the supply of in-line skates? Why or why not?

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

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

In October 2005, the U.S. Fish and Wildlife Service banned the importation of beluga caviar, the most prized of caviars, from the Caspian Sea. What happened in the market for caviar in the United States?

Using Richard Tedlow's "three phases of marketing", the premium bottled water industry is probably in

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 a shortage of apples, how will the equilibrium point change?

Assume that the price for swimming pool maintenance services has risen and sales of these services have fallen. One can conclude that

Figure 3-7 -Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for tuna. Which panel best describes what happens in this market when there is a decrease in the productivity of commercial fishermen?

A decrease in the price of pork will result in

Harvey Rabbitt pays for monthly cable TV service. Last week, the cable company informed Harvey that his monthly cable price would go down because the city council has granted approval for three new cable companies to service his area. How is the market for cable TV services affected by this?

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

Due to wildfires in Northern California, agricultural experts predict a 30 percent decline in this year's grape harvest. What happens in the California wine market as a result of this announcement?

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

Figure 3-5 -Refer to Figure 3-5. At a price of $15, the quantity sold

Figure 3-4 -Refer to Figure 3-4. If the price is $20

The supply curve for umbrellas

The decline in the popularity of clothing made from animal fur has enticed large department stores like J. C. Penney and Sears to discontinue sales of animal-fur products. How does discontinuing sales of these products by J.C. Penney and Sears affect the animal-fur clothing market?

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

If the demand curve for a product shifts to the right and the supply curve for the product shifts to the left, equilibrium price and equilibrium quantity will both increase.

Would a change in the price of in-line skates cause a change in the supply of in-line skates? Why or why not?

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

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

In October 2005, the U.S. Fish and Wildlife Service banned the importation of beluga caviar, the most prized of caviars, from the Caspian Sea. What happened in the market for caviar in the United States?

Using Richard Tedlow's "three phases of marketing", the premium bottled water industry is probably in

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 a shortage of apples, how will the equilibrium point change?

Assume that the price for swimming pool maintenance services has risen and sales of these services have fallen. One can conclude that

Figure 3-7 -Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for tuna. Which panel best describes what happens in this market when there is a decrease in the productivity of commercial fishermen?

A decrease in the price of pork will result in

Harvey Rabbitt pays for monthly cable TV service. Last week, the cable company informed Harvey that his monthly cable price would go down because the city council has granted approval for three new cable companies to service his area. How is the market for cable TV services affected by this?

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

Due to wildfires in Northern California, agricultural experts predict a 30 percent decline in this year's grape harvest. What happens in the California wine market as a result of this announcement?

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 a shortage of apples, how will the equilibrium point change?