Question 1

Suppose that over the next few years the demand for dancing to country and western music decreases.Hence,at country and western dance clubs the equilibrium price of admission ________ and the equilibrium quantity of dancing ________.

Accepted Answer

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

Question 2

When there is a surplus of snowboards,the

Accepted Answer

A) demand for snowboards is greater than the supply of snowboards. 
B) supply of snowboards is greater than the demand for snowboards. 
C) quantity of snowboards demanded is greater than the quantity of snowboards supplied. 
D) quantity of snowboards supplied is greater than the quantity of snowboards demanded. 
E) price rises to restore the equilibrium.

Question 3

A market is defined as

Accepted Answer

A) a physical place where people buy only goods. 
B) a physical place where people buy both goods and services. 
C) a store where people buy physical goods. 
D) any arrangement that brings buyers and sellers together. 
E) a place where one good is bartered for another.

Question 4

Consider the market for turkeys.In the United States,because of Thanksgiving in the month of November,

Accepted Answer

A) there is a downward movement along the demand curve for turkeys. 
B) there is an upward movement along the supply curve for turkeys. 
C) the supply curve of turkeys shifts leftward. 
D) the demand curve for turkeys shifts leftward. 
E) neither the demand curve nor the supply curve shift;instead there is a movement along both curves.

Question 5

Which of the following shifts the demand curve for movies leftward?

Accepted Answer

A) a decrease in the price of NetFlix,a substitute for movies 
B) a decrease in the price of movie tickets 
C) an increase in the price of movie tickets 
D) an increase in movie star salaries 
E) an increase in incomes,assuming movies are a normal good

Question 6

Over the next few years more and more people prefer to ride on scooters.Which of the figures above best illustrates how this change affects the demand curve for scooters?

Accepted Answer

A) Figure A 
B) Figure B 
C) Figure C 
D) Figure D 
E) None of the above answers is correct because the change in tastes will affect the supply curve not the demand curve.

Question 7

A huge 50 percent off sale on golf clubs is advertised for next week.What happens this week in the market for golf clubs?

Accepted Answer

A) The supply of golf clubs increases. 
B) The supply of golf clubs decreases. 
C) The demand for golf clubs increases. 
D) The demand for golf clubs decreases. 
E) The demand for and the supply of golf clubs decreases.

Question 8

What leads to a decrease in the quantity supplied of a good or service?

Accepted Answer

The answer of What leads to a decrease in the...

Question 9

-The figure above shows the market for iPods.Which of the following creates a movement from point A to point B?

Accepted Answer

A) a requirement that all students at universities have an iPod 
B) a decrease in the price of iPods 
C) a decrease in the price of Zunes,a substitute for iPods 
D) an increase in the price of iPods 
E) an increase in people's incomes

Question 10

-Using the data in the table above,the equilibrium quantity and equilibrium price for a cellular telephone is

Accepted Answer

A) 50,000 and $100. 
B) 80,000 and $80. 
C) 60,000 and $50. 
D) 40,000 and $20. 
E) 100,000 and $20.

Question 11

The number of buyers of sport utility vehicles,SUV,decreases sharply.So the

Accepted Answer

A) demand curve for SUVs shifts leftward. 
B) demand curve for SUVs shifts rightward. 
C) demand curve for SUVs does not shift,nor is there a movement along then demand curve. 
D) demand curve for SUVs does not shift,but there is a movement downward along it. 
E) supply curve for SUVs shifts rightward.

Question 12

If the price of tangerines increases,the price of oranges also rises because

Accepted Answer

A) consumers consider the two goods complements and so sellers decreased the supply of oranges. 
B) consumers consider the two goods substitutes and demand for oranges increases. 
C) if the supply of tangerines decreased,then the supply of oranges also must decrease. 
D) buyers must have expected a higher price for oranges and thus increased their demand for oranges. 
E) buyers' incomes must have decreased and oranges are an inferior good.

Question 13

-The above figure shows the market for game day t-shirts.If the price of t-shirts is $12,then

Accepted Answer

A) there is a shortage and the price of t-shirts will fall. 
B) there is a shortage and the price of t-shirts will rise. 
C) there is a surplus and the price of t-shirts will rise. 
D) there is a surplus and the price of t-shirts will fall. 
E) the market is in equilibrium.

Question 14

The market demand curve for mangos is

Accepted Answer

A) the same as the demand curve of one buyer in a market with many buyers. 
B) upward sloping because rich people can afford more mangos than poor people can buy. 
C) the horizontal sum of the individual demand curves of all the buyers. 
D) the vertical sum of the individual demand curves of all the buyers. 
E) the horizontal average of the individual demand curves of all the buyers.

Question 15

Consider the market for peanut butter.If there is an increase in the price of peanuts,

Accepted Answer

A) there is an upward movement along the supply curve for peanut butter. 
B) the supply curve for peanuts shifts rightward. 
C) there is a decrease in the supply of peanuts. 
D) there is a decrease in the supply of peanut butter. 
E) there is a decrease in the demand for peanut butter.

Question 16

Which of the following increases the supply of a good and shifts its supply curve rightward?

Accepted Answer

A) a smaller number of producers 
B) a higher wage paid to workers in the industry 
C) a technological advance in how the good is produced 
D) an increase in the cost of the resources used to produce the good 
E) an increase in the price of the good

Question 17

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 18

Consider the market for bread.If the price of wheat rises,then the

Accepted Answer

A) demand curve for bread shifts leftward. 
B) supply curve of bread shifts leftward. 
C) price of bread falls. 
D) equilibrium quantity of bread increases. 
E) demand curve for bread shifts rightward.

Question 19

The "law of demand" refers to the fact that,other things remaining the same,when the price of a good rises,

Accepted Answer

A) the demand curve shifts rightward. 
B) the demand curve shifts leftward. 
C) there is a movement down along the demand curve to a larger quantity demanded. 
D) there is a movement up along the demand curve to a smaller quantity demanded. 
E) the demand curve shifts rightward and there is a movement up along the demand curve to a smaller quantity demanded.

Question 20

-In the above figure,the movement from point a to point b reflects

Accepted Answer

A) an increase in the price of pizza. 
B) an increase in the supply of pizza. 
C) an increase in the number of producers of pizza. 
D) a decrease in the cost of the tomato sauce used to produce pizza. 
E) a decrease in income if pizza is a normal good.

Exam 4: Demand and Supply

Suppose that over the next few years the demand for dancing to country and western music decreases.Hence,at country and western dance clubs the equilibrium price of admission and the equilibrium quantity of dancing .