Question 1

-The above figures show the market for HD televisions.If the technology used to produce these televisions advances so that productivity increases,which figure shows the effect of this change?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  None of the figures represent this change.

Question 2

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Price } \
\text { (dollars } \
\text { per stapler) }
\end{array} & \begin{array} { c } 
\text { Quantity demanded } \
\text { (thousands of staplers } \
\text { per week) }
\end{array} & \begin{array} { c } 
\text { Quantity supplied } \
\text { (thousands of staplers } \
\text { per week) }
\end{array} \
\hline 8 & 10 & 90 \
7 & 40 & 80 \
6 & 70 & 70 \
5 & 100 & 60 \
\hline
\end{array}$$
-Using the data in the table above,the equilibrium quantity and equilibrium price for a stapler is

Accepted Answer

A)  10,000 and $8. 
B)  90,000 and $8. 
C)  100,000 and $5. 
D)  70,000 and $6. 
E)  60,000 and $5.

Question 3

$$\begin{array} { c c } 
\begin{array} { c } 
\text { Price } \
\text { (dollars per latte) }
\end{array} & \begin{array} { c } 
\text { Quantity demanded } \
\text { (lattes per hour) }
\end{array} \
\hline 1 & 90 \
2 & 80 \
3 & 60 \
4 & 30 \
\hline
\end{array}$$
-The table above gives the demand schedule for lattes at the Bottomless Cup.If the price of a latte is $3,then the quantity of lattes demanded is ________ an hour.

Accepted Answer

A)  90 
B)  30 
C)  80 
D)  60 
E)  230

Question 4

What happens to the demand for a good if a complement's price increases?

Accepted Answer

A)  The demand decreases and the demand curve shifts rightward. 
B)  The demand increases and the demand curve shifts rightward. 
C)  The demand decreases and the demand curve shifts leftward. 
D)  The demand increases and the demand curve shifts leftward. 
E)  There is no impact on demand for the good and the demand curve does not shift.

Question 5

Candy makers accurately anticipate the increase in demand for candy for Halloween so that the supply of candy and demand for candy increase the same amount.As a result,the price of candy ________ and the quantity of candy ________.

Accepted Answer

A)  rises; does not change 
B)  falls; increases 
C)  does not change; increases 
D)  does not change; does not change 
E)  rises; increases

Question 6

When does a surplus occur?

Accepted Answer

The answer of When does a surplus occur?...

Question 7

In a recession,consumers have less income to spend.As a result,if dining out is a normal good,then which of the following would happen to the demand curve for dining out?

Accepted Answer

A)  The demand curve would shift leftward. 
B)  The demand curve would not shift but the price of dining out would rise. 
C)  The effect on the demand curve is unknown. 
D)  The demand curve would shift rightward. 
E)  The demand curve would not shift but the price of dining out would fall.

Question 8

When there is a shortage of parking spaces at your college,the

Accepted Answer

A)  demand for parking spaces is greater than the supply. 
B)  supply of parking spaces is greater than the demand. 
C)  quantity of parking spaces supplied is greater than the quantity of parking spaces demanded. 
D)  quantity of parking spaces demanded is greater than the quantity of parking spaces supplied. 
E)  Both answers A and D are correct.

Question 9

-In the above figure,the shift in the demand curve from D to D₁ can be the result of

Accepted Answer

A)  a decrease in income if pizza is a normal good. 
B)  a decrease in the price of a sub sandwich, a substitute for pizza. 
C)  an increase in the price of soda, a complement to pizza. 
D)  an increase in the number of teenagers, all of whom demand more pizza than do other age groups. 
E)  new technology that increases the profit from producing pizza.

Question 10

One reason supply curves have an upward slope is because

Accepted Answer

A)  increased supply will require increased technology. 
B)  people will pay a higher price when less is supplied. 
C)  a higher price brings a greater profit, so firms want to sell more of that good. 
D)  to have more of the good supplied requires more firms to open. 
E)  None of the above answers is correct because supply curves have a downward slope.

Question 11

To be part of the supply for a good,a producer must be

Accepted Answer

A)  only able to supply the good. 
B)  only willing to supply the good. 
C)  both able and willing to supply the good. 
D)  both able and willing to supply the good, and have already identified a buyer. 
E)  both able and willing to supply the good, and have already sold the good.

Question 12

-The graph illustrates the market for British pounds,the currency of the United Kingdom.As the number of buyers of pounds increases and the number of sellers of pounds increases,the equilibrium price of a pound

Accepted Answer

A)  will rise. 
B)  will fall 
C)  will remain the same. 
D)  might rise, fall, or remain the same depending on whether the effect on buyers is larger than, less than, or the same as the effect on sellers. 
E)  None of the above answers is correct.

Question 13

List the factors that change supply and shift the supply curve.Tell what happens to supply and the supply curve when there is an increase in the factor.

Accepted Answer

The answer of List the factors that change supply and...

Question 14

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Quantity demanded } \
\text { (tons of cat food per year) }
\end{array} & \begin{array} { c } 
\text { Price } \
\text { (dollars per pound of cat } \
\text { food) }
\end{array} & \begin{array} { c } 
\text { Quantity supplied } \
\text { (tons of cat food per year) }
\end{array} \
\hline 52 & 1.00 & 15 \
46 & 1.50 & 26 \
43 & 2.00 & 34 \
40 & 2.50 & 40 \
35 & 3.00 & 44 \
\hline
\end{array}$$
-The above table gives the demand and supply schedules for cat food.If the price is $1.00 per pound of cat food,will there be a shortage,a surplus,or is this price the equilibrium price? If there is a shortage,how much is the shortage? If there is a surplus,how much is the surplus? If $3.00 is the equilibrium price,what is the equilibrium quantity?

Accepted Answer

The answer of \[\begin{array} { c c c } 
\begin{array}...

Question 15

Water bottlers announce that next month the price of bottled water will rise by 25 percent.Which of the following occurs immediately?

Accepted Answer

A)  The quantity of bottled water demanded increases. 
B)  The quantity of bottled water demanded decreases. 
C)  The demand for bottled water decreases. 
D)  The demand for bottled water increases. 
E)  None of the above answers is correct because it is the supply that immediately changes, not the demand.

Question 16

The number of corn producers increases,so the supply of corn ________ and the supply curve of corn ________.

Accepted Answer

A)  increases; shifts rightward 
B)  increases; shifts leftward 
C)  decrease; shifts rightward 
D)  decreases; shifts leftward 
E)  increases; does not shift

Question 17

If the demand for a good increases when people's incomes increase,

Accepted Answer

A)  the good is an inferior good. 
B)  the law of demand is violated. 
C)  the good's demand curve must be slope upward. 
D)  the good is a normal good. 
E)  the good is a substitute good for an inferior good.

Question 18

Consider the market for peanut butter.If there is a decrease in the price of deli turkey slices (a substitute in consumption for peanut butter)along with a decrease in the price of peanut brittle (a substitute in production for peanut butter),the

Accepted Answer

A)  equilibrium price of peanut butter definitely falls. 
B)  equilibrium quantity of peanut definitely decreases. 
C)  equilibrium price of peanut butter might rise or fall. 
D)  equilibrium quantity of peanut butter definitely increases. 
E)  equilibrium price of peanut butter definitely rises.

Question 19

In Great Britain,raising taxes on gasoline has increased the costs of supplying gasoline.As a result,the equilibrium quantity of gasoline ________,and the equilibrium price of gasoline ________.

Accepted Answer

A)  increases; rises 
B)  increases; falls 
C)  decreases; rises 
D)  decreases; falls 
E)  does not change; rises

Question 20

-New technology for producing plywood is developed.Which of the figures above best illustrates this change?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  Figure A and Figure D

Exam 4: Demand and Supply