Question 1

Table 3-2
 
-Refer to Table 3-2.The table above shows the demand schedules for caviar of two individuals (Ari and Sonia)and the rest of the market.At a price of $75, the quantity demanded in the market would be

Accepted Answer

A) 6 oz. 
B) 46 oz. 
C) 52 oz. 
D) 127 oz.

Question 2

If the price of automobiles was to increase, then

Accepted Answer

A) the demand for gasoline would decrease. 
B) the demand for gasoline would increase. 
C) the supply of gasoline would increase. 
D) the quantity of gasoline demanded would decrease.

Question 3

Holding everything else constant, a decrease in the price of bicycles will result in

Accepted Answer

A) a decrease in the quantity of bicycles demanded. 
B) an increase in the demand for bicycles. 
C) a decrease in the supply of bicycles. 
D) an increase in the quantity of bicycles demanded.

Question 4

Studies have shown links between calcium consumption and a reduction in osteoporosis.How does this affect the market for calcium?

Accepted Answer

A) The calcium supply curve shifts to the right because of a change in tastes in favor of calcium. 
B) The calcium demand curve shifts to the right because of a change in tastes in favor of calcium. 
C) The calcium demand curve shifts to the left because this new information will increase the price of calcium. 
D) The calcium supply curve shifts to the left because this new information will increase the price of calcium.

Question 5

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.

Question 6

In 2004, hurricanes destroyed a large portion of Florida's orange and grapefruit crops.In the market for citrus fruit in 2004

Accepted Answer

A) the supply curve shifted to the right resulting in an increase in the equilibrium price. 
B) the supply curve shifted to the left resulting in an increase in the equilibrium price. 
C) the demand curve shifted to the right resulting in an increase in the equilibrium price. 
D) the demand curve shifted to the left resulting in a decrease in the equilibrium price.

Question 7

Which of the following would cause the equilibrium price of white bread to decrease and the equilibrium quantity of white bread to increase?

Accepted Answer

A) a decrease in the price of flour 
B) an increase in the price of flour 
C) an increase in the price of rye bread, a substitute for white bread 
D) an increase in the price of butter, a complement for white bread

Question 8

Figure 3-1
 
-Refer to Figure 3-1.An increase in population 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 9

A normal good is a good for which the demand increases as income decreases, holding everything else constant.

Accepted Answer

A) True 
 B)False

Question 10

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 answer of In 2004, hurricanes destroyed a large portion...

Question 11

A positive technological change will cause the supply of a good to increase.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

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

Question 13

Figure 3-7
 
-Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for almonds.Which panel best describes what happens in this market when there is an increase in the productivity of almond harvesters?

Accepted Answer

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

Question 14

Which of the following has occurred as the millennial generation has come of age?

Accepted Answer

A) The demand for "fast casual" food has decreased in the U.S. market. 
B) The demand for golf equipment has decreased in the U.S. market. 
C) The demand for traditional fast food has increased in the U.S. market. 
D) all of the above

Question 15

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

Accepted Answer

A) Firms lower the price of walnuts. 
B) The price of cashews is lowered in order to make up for the walnut shortage. 
C) The equilibrium price of walnuts falls due to a decrease in demand. 
D) The quantity of walnuts demanded is greater than the quantity supplied.

Question 16

An article in the Wall Street Journal in early 2001 noted two developments in the market for laser eye surgery.The first development concerned side effects from the surgery, including blurred vision.The second development was that the companies renting eye-surgery machinery to doctors had reduced their charges.In the market for laser eye surgeries, these two developments

Accepted Answer

A) decreased demand and decreased supply, resulting in a decrease in the equilibrium quantity and an increase in the equilibrium price of laser eye surgeries. 
B) decreased demand and increased supply resulting in an increase in both the equilibrium quantity and the equilibrium price of laser eye surgeries. 
C) decreased demand and increased supply, resulting in a decrease in the equilibrium price and an uncertain effect on the equilibrium quantity of laser eye surgeries. 
D) decreased demand and increased supply, resulting in a decrease in both the equilibrium price and the equilibrium quantity of laser eye surgeries.

Question 17

What is the law of supply? What does this law imply about the shape of the supply curve?

Accepted Answer

The answer of What is the law of supply? What...

Question 18

Which of the following statements is true?

Accepted Answer

A) An increase in supply causes a change in equilibrium price; the change in price does not cause a further change in demand or supply. 
B) A decrease in supply causes equilibrium price to rise; the increase in price then results in a decrease in demand. 
C) If both demand and supply increase there must be an increase in equilibrium price; equilibrium quantity may either increase or decrease. 
D) If demand decreases and supply increases one cannot determine if equilibrium price will increase or decrease without knowing which change is greater.

Question 19

In each of the following situations, list what will happen to the equilibrium price and the equilibrium quantity for a particular product, which is a normal good.
a.The population increases and the price of inputs increase.
b.The price of a complement increases and technology advances.
c.The number of firms in the market increases and income increases.
d.Price is expected to increase in the future.
e.Consumer preference increases and the price of a substitute in production decreases.

Accepted Answer

The answer of In each of the following situations, list...

Question 20

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.

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

Table 3-2 -Refer to Table 3-2.The table above shows the demand schedules for caviar of two individuals (Ari and Sonia) and the rest of the market.At a price of $75, the quantity demanded in the market would be