Question 1

Suppose a positive technological change in the production of disease-resistant corn caused the price of corn to fall. Holding everything else constant, how would this affect the market for wheat (a substitute for corn)?

Accepted Answer

A)  The supply of wheat would increase, and the equilibrium price of wheat would decrease. 
B)  The demand for wheat would decrease, and the equilibrium price of wheat would decrease. 
C)  The demand for wheat would increase because consumers could afford to buy more wheat and corn. 
D)  The demand for wheat would decrease, and the equilibrium price of wheat would increase.

Question 2

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 3

Figure 3-4 
-Refer to Figure 3-4. At a price of $20, how many units will be supplied?

Accepted Answer

A)  400 
B)  500 
C)  600 
D)  800

Question 4

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 5

A shortage 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 6

A change in which variable will change the market demand for a product?

Accepted Answer

A)  the price of the product 
B)  population 
C)  technology 
D)  the prices of substitutes in production

Question 7

Assume that the hourly price for the services of tarot card readers 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 tarot card readers has increased. 
C)  the demand for tarot card readers has increased. 
D)  tarot card readers are deliberately charging high prices because they provide services for superstitious clients.

Question 8

Figure 3-1 
-Refer to Figure 3-1. A decrease in the price of a complementary good 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

If the quantity demanded for a product exceeds the quantity supplied, the market price will rise until

Accepted Answer

A)  the quantity demanded equals the quantity supplied. The product will then no longer be scarce. 
B)  quantity demanded equals quantity supplied. The equilibrium price will then be greater than the market price. 
C)  only wealthy consumers will be able to afford the product. 
D)  quantity demanded equals quantity supplied. The market price will then equal the equilibrium price.

Question 10

Table 3-3
 
-Refer to Table 3-3. The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi) and the rest of the market. If the price of Kona coffee rises from $4 to $5, the market quantity demanded would

Accepted Answer

A)  decrease by 35 lb. 
B)  increase by 115 lb. 
C)  increase by 35 lb. 
D)  decrease by 115 lb.

Question 11

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 12

What is the difference between a demand schedule and a demand curve?

Accepted Answer

The answer of What is the difference between a demand...

Question 13

During the 1990s positive technological change in the production of chicken caused the price of chicken to fall. Holding everything else constant, how would this affect the market for pork (a substitute for chicken)?

Accepted Answer

A)  The supply of pork would increase, and the equilibrium price of pork would decrease. 
B)  The demand for pork would decrease, and the equilibrium price of pork would decrease. 
C)  The demand for pork would increase because consumers could afford to buy more chicken and pork. 
D)  The demand for pork would decrease, and the equilibrium price of pork would increase.

Question 14

Figure 3-4 
-Refer to Figure 3-4. At a price of $25, how many units will be supplied?

Accepted Answer

A)  400 
B)  500 
C)  600 
D)  800

Question 15

Shrimp is an increasingly popular part of the American diet. Louisiana shrimpers, who represent the bulk of the U.S. industry, were almost all put out of business by Hurricane Katrina. How did this affect the equilibrium price and quantity of shrimp?

Accepted Answer

The answer of Shrimp is an increasingly popular part of...

Question 16

All else equal, the decrease in consumer preference predicted by Apple for its iPhone 5 would be represented by a

Accepted Answer

A)  shift in the supply curve for iPhones to the right. 
B)  shift in the supply curve for iPhones to the left. 
C)  shift in the demand curve for iPhones to the right. 
D)  shift in the demand curve for iPhones to the left.

Question 17

Suppose a negative technological change in the production of disease-resistant wheat caused the price of wheat to rise. Holding everything else constant, how would this affect the market for corn (a substitute for wheat)?

Accepted Answer

A)  The supply of corn would decrease and the equilibrium price of corn would increase. 
B)  The demand for corn would increase and the equilibrium price of corn would increase. 
C)  The demand for corn would decrease because consumers could afford to buy less wheat and corn. 
D)  The demand for corn would increase and the equilibrium price of corn would decrease.

Question 18

If pilots and flight attendants agree to wage and benefit reductions in the wake of the financial difficulties in the airline industry, what impact would this have on the supply and demand in the market for airline service, assuming no other changes take place in this market?

Accepted Answer

The answer of If pilots and flight attendants agree to...

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

If the demand for a product decreases and the supply of the same product decreases, the equilibrium price will decrease.

Accepted Answer

A) True 
 B)False

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

Suppose a positive technological change in the production of disease-resistant corn caused the price of corn to fall. Holding everything else constant, how would this affect the market for wheat (a substitute for corn) ?

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

Figure 3-4 -Refer to Figure 3-4. At a price of $20, how many units will be supplied?

A decrease in the price of pork will result in

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

A change in which variable will change the market demand for a product?

Assume that the hourly price for the services of tarot card readers has risen and sales of these services have also risen. One can conclude that

Figure 3-1 -Refer to Figure 3-1. A decrease in the price of a complementary good would be represented by a movement from

If the quantity demanded for a product exceeds the quantity supplied, the market price will rise until

Table 3-3 -Refer to Table 3-3. The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi) and the rest of the market. If the price of Kona coffee rises from $4 to $5, the market quantity demanded would

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

What is the difference between a demand schedule and a demand curve?

During the 1990s positive technological change in the production of chicken caused the price of chicken to fall. Holding everything else constant, how would this affect the market for pork (a substitute for chicken) ?

Figure 3-4 -Refer to Figure 3-4. At a price of $25, how many units will be supplied?

Shrimp is an increasingly popular part of the American diet. Louisiana shrimpers, who represent the bulk of the U.S. industry, were almost all put out of business by Hurricane Katrina. How did this affect the equilibrium price and quantity of shrimp?

All else equal, the decrease in consumer preference predicted by Apple for its iPhone 5 would be represented by a

Suppose a negative technological change in the production of disease-resistant wheat caused the price of wheat to rise. Holding everything else constant, how would this affect the market for corn (a substitute for wheat) ?

If pilots and flight attendants agree to wage and benefit reductions in the wake of the financial difficulties in the airline industry, what impact would this have on the supply and demand in the market for airline service, assuming no other changes take place in this market?

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

If the demand for a product decreases and the supply of the same product decreases, the equilibrium price will decrease.