Question 1

Let D= demand,S = supply,P = equilibrium price,Q= equilibrium quantity.What happens in the market for tropical hardwood trees if the governments restrict the amount of forest lands that can be logged?

Accepted Answer

A)  D decreases, S no change, P and Q decrease 
B)  S decreases, D no change, P increases, Q decreases 
C)  D and S decrease, P and Q increase 
D)  D no change, S decreases, P increases, Q increases

Question 2

The popularity of digital cameras has enticed large discount stores like Wal-Mart and Costco to offer digital photo printing services.How does this affect the digital photo printing market?

Accepted Answer

A)  The demand curve for digital photo printing services shifts to the right. 
B)  The demand curve for digital photo printing services shifts to the left. 
C)  The supply curve for digital photo printing services shifts to the right. 
D)  The supply curve for digital photo printing services shifts to the left.

Question 3

Scarcity is defined as the situation that exists when the quantity demanded for a good is greater than the quantity supplied.

Accepted Answer

A) True 
 B)False

Question 4

If an increase in income leads to in an increase in the demand for peanut butter,then peanut butter is

Accepted Answer

A)  a neutral good. 
B)  a normal good. 
C)  a necessity. 
D)  a complement.

Question 5

Chips and salsa are complements.If the price of salsa decreases,the demand for chips will increase.

Accepted Answer

A) True 
 B)False

Question 6

Elvira decreased her consumption of bananas when the price of peanut butter increased.For Elvira,peanut butter and bananas are

Accepted Answer

A)  substitutes in consumption. 
B)  both inferior goods. 
C)  complements in consumption. 
D)  both luxury goods.

Question 7

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 demanded of gasoline would decrease.

Question 8

Explain how it would be possible for the equilibrium price and equilibrium quantity to both increase in the market for motorcycles if consumer preference for motorcycles increases and the number of motorcycle manufacturers decreases.

Accepted Answer

The answer of Explain how it would be possible for...

Question 9

The Internet has created a new category in the book selling market,namely,the "barely used" book.How does the availability of barely used books affect the market for new books?

Accepted Answer

A)  The demand curve for new books shifts to the right. 
B)  The demand curve for new books shifts to the left. 
C)  The supply curve for new books shifts to the right. 
D)  The supply curve for new books shifts to the left.

Question 10

Select the phrase that correctly completes the following statement."A positive change in technology caused an increase in the supply of flat-screen televisions.As a result ________."

Accepted Answer

A)  the price of flat-screen televisions decreased and the demand for flat-screen televisions increased 
B)  the equilibrium quantity of flat-screen televisions decreased 
C)  the price of flat-screen televisions decreased and the quantity demanded of flat-screen televisions increased 
D)  the price of flat-screen televisions decreased. The lower price caused the supply of flat-screen televisions to decrease

Question 11

Nearly a quarter of China's 1.3 billion people are under the age of 15.How will this affect high school enrollment over the next fifteen years? The labor market over the next fifteen years?

Accepted Answer

The answer of Nearly a quarter of China's 1.3 billion...

Question 12

In recent years the cost of producing organic produce in the U.S.has decreased largely due technological advancement.At the same time,more and more Americans prefer organic produce over conventional produce.Which of the following best explains the effect of these events in the organic produce market?

Accepted Answer

A)  The supply curve has shifted to the left and the demand curve has shifted to the right. As a result there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price. 
B)  Both the supply and demand curves have shifted to the right. As a result, there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price. 
C)  Both the supply and demand curves have shifted to the right. As a result, there has been an increase in both the equilibrium price and the equilibrium quantity. 
D)  The supply curve has shifted to the left and the demand curve has shifted to the right. As a result, there has been an increase in the equilibrium price and an uncertain effect on the equilibrium quantity.

Question 13

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 14

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

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

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

Question 16

Figure 3-4
 
-Refer to Figure 3-4.If the price is $10,

Accepted Answer

A)  there would be a surplus of 600 units. 
B)  there would be a shortage of 600 units. 
C)  there would be a surplus of 200 units. 
D)  there would be a shortage of 200 units.

Question 17

If the Apple iPad and the Samsung Galaxy Tab are considered substitutes,then,other things equal,an increase in the price of the iPad will

Accepted Answer

A)  decrease the demand for the iPad. 
B)  increase the demand for the Galaxy Tab. 
C)  increase the quantity demanded for the Galaxy Tab. 
D)  increase the quantity demanded for the iPad.

Question 18

An increase in the demand for lobster due to changes in consumer tastes,accompanied by a decrease in the supply of lobster as a result bad weather reducing the number of fishermen trapping lobster,will result in

Accepted Answer

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

Question 19

Which of the following statements is true?

Accepted Answer

A)  An increase in demand 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 20

By drawing a demand curve with ________ on the vertical axis and ________ on the horizontal axis,economists assume that the most important determinant of the demand for a good is the ________ of the good.

Accepted Answer

A)  quantity; price; quantity 
B)  price; quantity; quantity 
C)  price; quantity; price 
D)  quantity; price; price

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

Let D= demand,S = supply,P = equilibrium price,Q= equilibrium quantity.What happens in the market for tropical hardwood trees if the governments restrict the amount of forest lands that can be logged?

The popularity of digital cameras has enticed large discount stores like Wal-Mart and Costco to offer digital photo printing services.How does this affect the digital photo printing market?

Scarcity is defined as the situation that exists when the quantity demanded for a good is greater than the quantity supplied.

If an increase in income leads to in an increase in the demand for peanut butter,then peanut butter is

Chips and salsa are complements.If the price of salsa decreases,the demand for chips will increase.

Elvira decreased her consumption of bananas when the price of peanut butter increased.For Elvira,peanut butter and bananas are

If the price of automobiles was to increase,then

Explain how it would be possible for the equilibrium price and equilibrium quantity to both increase in the market for motorcycles if consumer preference for motorcycles increases and the number of motorcycle manufacturers decreases.

The Internet has created a new category in the book selling market,namely,the "barely used" book.How does the availability of barely used books affect the market for new books?

Select the phrase that correctly completes the following statement."A positive change in technology caused an increase in the supply of flat-screen televisions.As a result ________."

Nearly a quarter of China's 1.3 billion people are under the age of 15.How will this affect high school enrollment over the next fifteen years? The labor market over the next fifteen years?

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

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

Figure 3-4 -Refer to Figure 3-4.If the price is $10,

If the Apple iPad and the Samsung Galaxy Tab are considered substitutes,then,other things equal,an increase in the price of the iPad will

An increase in the demand for lobster due to changes in consumer tastes,accompanied by a decrease in the supply of lobster as a result bad weather reducing the number of fishermen trapping lobster,will result in

Which of the following statements is true?

By drawing a demand curve with on the vertical axis and on the horizontal axis,economists assume that the most important determinant of the demand for a good is the of the good.