Question 1

Figure 3-2 
-Refer to Figure 3-2.A technological advancement 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 2

If the United States lifts the embargo on Cuban products,what will happen in the U.S.market for Cuban cigars?

Accepted Answer

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

Question 3

If the price of peaches,a substitute for plums,increases the demand for plums will decrease.

Accepted Answer

A) True 
 B)False

Question 4

How does the increasing use of digital cameras affect the market for traditional camera film?

Accepted Answer

A) The demand curve for traditional camera film shifts to the right. 
B) The quantity of traditional camera film demanded decreases. 
C) The quantity of traditional camera film demanded increases. 
D) The demand curve for traditional camera film shifts to the left.

Question 5

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 6

If the price of gasoline increases,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.

Question 7

Electric car enthusiasts want to buy more electric cars at a lower price.All of the following events would have this effect except

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.

Question 8

Figure 3-8 
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D2 and S2 (point

Accepted Answer

A) The equilibrium point will move from E to A. 
B) The equilibrium point will move from E to B. 
C) The equilibrium point will move from E to C. 
D) The equilibrium point will remain at E. 
E) .If the technology to produce motorcycles improves and the number of buyers increases,how will the equilibrium point change?

Question 9

Assume that airline tickets are a normal good.Prices of commercial airline tickets have fallen in recent months.Over this same period,the price of jet fuel has risen and consumer incomes have fallen.Which of the following best explains the falling prices of airline tickets?

Accepted Answer

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

Question 10

A ________ demand curve for shampoo would be caused by a change in the price of shampoo.

Accepted Answer

A) rightward shift of the 
B) leftward shift of the 
C) movement along the 
D) positively sloped

Question 11

A decrease in input costs in the production of LCD televisions caused the price of LCD televisions to decrease.Holding everything else constant,how would this affect the market for video game consoles (a complement to LCD televisions)?

Accepted Answer

A) The supply of video game consoles would increase and the equilibrium price of video game consoles would decrease. 
B) The demand for video game consoles would decrease and the equilibrium price of video game consoles would decrease. 
C) The demand for video game consoles would decrease because consumers could afford to buy fewer LCD televisions and video game consoles. 
D) The demand for video game consoles would increase and the equilibrium price of video game consoles would increase.

Question 12

A surplus is defined as the situation that exists when the quantity of a good supplied is greater than the quantity demanded.

Accepted Answer

A) True 
 B)False

Question 13

Several studies have shown promising links between green tea consumption and cancer prevention.How does this affect the market for green tea?

Accepted Answer

A) The quantity of green tea demanded increases because of a change in tastes in favor of green tea. 
B) The green tea demand curve shifts to the right because of a change in tastes in favor of green tea. 
C) The green tea demand curve shifts to the left because this new information will increase the price of green tea. 
D) The quantity of green tea demanded decreases because this new information will increase the price of green tea.

Question 14

At a product's equilibrium price

Accepted Answer

A) anyone who needs the product will be able to buy the product,regardless of ability to pay. 
B) the federal government will provide the product to anyone who cannot afford it. 
C) not all sellers who are willing to accept the price will find buyers for their products. 
D) any buyer who is willing and able to pay the price will find a seller for the product.

Question 15

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

Accepted Answer

A) consumer income. 
B) consumer tastes and preferences. 
C) the price of the good. 
D) the quality of the good.

Question 16

One would speak of a movement along a supply curve for a good,rather than a change in supply,if

Accepted Answer

A) the cost of producing the good changes. 
B) supplier expectations about future prices change. 
C) the price of the good changes. 
D) prices of substitutes in production change.

Question 17

Which of the following will not shift the demand curve for a good?

Accepted Answer

A) an increase in population 
B) an increase in the price of the good 
C) a decrease in the price of a substitute good 
D) an increase in consumer incomes

Question 18

An increase in the demand for LED light bulbs due to changes in consumer tastes,accompanied by an increase in the supply of LED light bulbs as a result of government subsidies,will result in

Accepted Answer

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

Question 19

In April,market analysts predict that the price of titanium will fall in May.What happens in the titanium market in April,holding everything else constant?

Accepted Answer

A) The supply curve shifts to the right. 
B) The supply curve shifts to the left. 
C) The quantity demanded and the quantity supplied increase. 
D) The demand curve shifts to the right.

Question 20

Suppose a drought resulted in a major reduction in the California lettuce crop.In the market for lettuce

Accepted Answer

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

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

Figure 3-2 -Refer to Figure 3-2.A technological advancement would be represented by a movement from

If the United States lifts the embargo on Cuban products,what will happen in the U.S.market for Cuban cigars?

If the price of peaches,a substitute for plums,increases the demand for plums will decrease.

How does the increasing use of digital cameras affect the market for traditional camera film?

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?

If the price of gasoline increases,what will be the impact in the market for public transportation?

Electric car enthusiasts want to buy more electric cars at a lower price.All of the following events would have this effect except

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₂ and S₂ (point

Assume that airline tickets are a normal good.Prices of commercial airline tickets have fallen in recent months.Over this same period,the price of jet fuel has risen and consumer incomes have fallen.Which of the following best explains the falling prices of airline tickets?

A ________ demand curve for shampoo would be caused by a change in the price of shampoo.

A decrease in input costs in the production of LCD televisions caused the price of LCD televisions to decrease.Holding everything else constant,how would this affect the market for video game consoles (a complement to LCD televisions) ?

A surplus is defined as the situation that exists when the quantity of a good supplied is greater than the quantity demanded.

Several studies have shown promising links between green tea consumption and cancer prevention.How does this affect the market for green tea?

At a product's equilibrium price

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

One would speak of a movement along a supply curve for a good,rather than a change in supply,if

Which of the following will not shift the demand curve for a good?

An increase in the demand for LED light bulbs due to changes in consumer tastes,accompanied by an increase in the supply of LED light bulbs as a result of government subsidies,will result in

In April,market analysts predict that the price of titanium will fall in May.What happens in the titanium market in April,holding everything else constant?

Suppose a drought resulted in a major reduction in the California lettuce crop.In the market for lettuce

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

Figure 3-2 -Refer to Figure 3-2.A technological advancement would be represented by a movement from

If the United States lifts the embargo on Cuban products,what will happen in the U.S.market for Cuban cigars?

If the price of peaches,a substitute for plums,increases the demand for plums will decrease.

How does the increasing use of digital cameras affect the market for traditional camera film?

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?

If the price of gasoline increases,what will be the impact in the market for public transportation?

Electric car enthusiasts want to buy more electric cars at a lower price.All of the following events would have this effect except

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D2 and S2 (point

Assume that airline tickets are a normal good.Prices of commercial airline tickets have fallen in recent months.Over this same period,the price of jet fuel has risen and consumer incomes have fallen.Which of the following best explains the falling prices of airline tickets?

A ________ demand curve for shampoo would be caused by a change in the price of shampoo.

A decrease in input costs in the production of LCD televisions caused the price of LCD televisions to decrease.Holding everything else constant,how would this affect the market for video game consoles (a complement to LCD televisions) ?

A surplus is defined as the situation that exists when the quantity of a good supplied is greater than the quantity demanded.

Several studies have shown promising links between green tea consumption and cancer prevention.How does this affect the market for green tea?

At a product's equilibrium price

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

One would speak of a movement along a supply curve for a good,rather than a change in supply,if

Which of the following will not shift the demand curve for a good?

An increase in the demand for LED light bulbs due to changes in consumer tastes,accompanied by an increase in the supply of LED light bulbs as a result of government subsidies,will result in

In April,market analysts predict that the price of titanium will fall in May.What happens in the titanium market in April,holding everything else constant?

Suppose a drought resulted in a major reduction in the California lettuce crop.In the market for lettuce

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₂ and S₂ (point