Question 1

________ means the supply curve has shifted to the right,while ________ refers to a movement along a given supply curve in response to an increase in price.

Accepted Answer

A)  An increase in supply;a decrease in supply
B)  A decrease in supply;an increase in supply
C)  An increase in supply;an increase in quantity supplied
D)  A decrease in supply;a decrease in quantity suppliedE) B) and D)
F) A) and D)

Question 2

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 increased in the U.S.market.
C)  The demand for traditional fast food has decreased in the U.S.market.
D)  all of the aboveE) All of the above
F) A) and B)

Question 3

Buyers scrambled to secure stocks of Australian wool following a forecast of an 11 percent decline in wool production.What happens in the Australian wool market as a result of this announcement?

Accepted Answer

A)  The demand curve for Australian wool shifts to the left in anticipation of higher prices in the future.
B)  The demand curve for Australian wool shifts to the right in anticipation of higher prices in the future.
C)  The quantity of Australian wool demanded increases in anticipation of higher prices in the future.
D)  The quantity of Australian wool demanded decreases in anticipation of lower quantities in the future.E) B) and C)
F) A) and D)

Question 4

Which of the following would cause a decrease in the supply of peanut butter?

Accepted Answer

A)  a decrease in the price of jelly (assuming that peanut butter and jelly are complements) 
B)  a decrease in the price of peanut butter
C)  an increase the price of peanuts
D)  an increase in the technology used to produce peanut butterE) All of the above
F) A) and C)

Question 5

Would a change in the price of in-line skates cause a change in the supply of in-line skates? Why or why not?

Accepted Answer

No,a change in the price of in-line skat...

Question 6

Figure 3-1 
-Refer to Figure 3-1.An increase in the price of the product 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.E) B) and C)
F) C) and D)

Question 7

What is the difference between a "change in demand" and a "change in quantity demanded"?

Accepted Answer

A "change in demand" means the demand cu...

Question 8

Figure 3-7 
-Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for tuna.Which panel best describes what happens in this market when there is a decrease in the productivity of commercial fishermen?

Accepted Answer

A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d) E) A) and C)
F) None of the above

Question 9

Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right,but the supply curve shifts less than the demand curve.As a result,

Accepted Answer

A)  both the equilibrium price and quantity of DVD players will decrease.
B)  the equilibrium price of DVD players will decrease;the equilibrium quantity may increase or decrease.
C)  the equilibrium price of DVD players may increase or decrease;the equilibrium quantity will increase.
D)  the equilibrium price of DVD players will decrease;the equilibrium quantity will increase.E) B) and C)
F) A) and D)

Question 10

Suppose that when the price of ice cream increases,Liza decreases her purchase of hot fudge.To Liza,

Accepted Answer

A)  ice cream and hot fudge are complements.
B)  ice cream and hot fudge and substitutes.
C)  ice cream and hot fudge are normal goods.
D)  ice cream is a normal good and hot fudge is an inferior good.E) A) and C)
F) All of the above

Question 11

Which of the following statements is true?

Accepted Answer

A)  A decrease in demand causes a decrease in equilibrium price;the decrease in price causes supply to decrease.
B)  A decrease in demand causes equilibrium price to fall;the decrease in price then results in a decrease in quantity supplied.
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.E) B) and D)
F) C) and D)

Question 12

Figure 3-6 
-Refer to Figure 3-6.The figure above represents the market for coffee grinders.Assume that the market price is $21.Which of the following statement is true?

Accepted Answer

A)  There is a shortage that will cause the price to increase;quantity demanded will then decrease and quantity supplied will increase until the price equals $25.
B)  There is a shortage that will cause the price to increase;quantity supplied will then decrease and quantity demanded will increase until the price equals $25.
C)  There will be a shortage that will cause the price to increase;demand will then decrease and supply will increase until the price equals $25.
D)  There is a shortage that will cause the price to decrease;quantity demanded will then increase and quantity supplied will decrease until the price equals $25.E) B) and C)
F) All of the above

Question 13

Figure 3-2 
-Refer to Figure 3-2.A decrease in the number of firms in the market 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.E) A) and C)
F) A) and D)

Question 14

If the number of firms producing electric cars increases and consumer preference for electric cars increases,the equilibrium quantity of electric cars will definitely increase.

Accepted Answer

A) True 
 B)False

Question 15

As the number of firms in a market decreases,the supply curve will shift to the left and the equilibrium price will fall.

Accepted Answer

A) True 
 B)False

Question 16

According to a recent study,"Stricter college alcohol policies,such as raising the price of alcohol,or banning alcohol on campus,decrease the number of students who use marijuana." On the basis of this information,how would you describe alcohol and marijuana?

Accepted Answer

A)  The two goods are substitutes in consumption.
B)  There is no relationship between the two goods.
C)  The two goods are complements in consumption.
D)  They are both luxury goods.E) A) and D)
F) B) and C)

Question 17

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.E) B) and D)
F) A) and D)

Question 18

If the demand for letters written by Abraham Lincoln is higher than the demand for letters written by John Wilkes Booth,what would have to be true for the market equilibrium prices for these letters to be equal?

Accepted Answer

A)  The supply of Lincoln letters would have to be less than the supply of Booth letters.
B)  The supply of Booth letters would have to be less than the supply of Lincoln letters.
C)  The supply of Lincoln letters and the supply of Booth letters would have to be equal.
D)  If the demand for Lincoln letters is greater than the demand for Booth letters,the market equilibrium price for Lincoln letters will always be greater than the market equilibrium price for Booth letters.E) C) and D)
F) None of the above

Question 19

Figure 3-4 
-Refer to Figure 3-4.If the price is $20,

Accepted Answer

A)  there is a surplus of 600 units.
B)  there is a shortage of 600 units.
C)  quantity demanded is zero.
D)  the market is in equilibrium.E) B) and C)
F) A) and B)

Question 20

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 slopedE) A) and D)
F) B) and C)

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

Would a change in the price of in-line skates cause a change in the supply of in-line skates? Why or why not?

Correct AnswerverifiedNo,a change in the price of in-line skat...View AnswerShow Answer

Figure 3-6 -Refer to Figure 3-6.The figure above represents the market for coffee grinders.Assume that the market price is $21.Which of the following statement is true?

Correct AnswerverifiedShow Answer

What is the difference between a "change in demand" and a "change in quantity demanded"?

Correct AnswerverifiedA "change in demand" means the demand cu...View AnswerShow Answer

Which of the following would cause a decrease in the supply of peanut butter?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 3-2 -Refer to Figure 3-2.A decrease in the number of firms in the market would be represented by a movement from

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 3-1 -Refer to Figure 3-1.An increase in the price of the product would be represented by a movement from

Correct AnswerverifiedShow Answer

Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right,but the supply curve shifts less than the demand curve.As a result,

Correct AnswerverifiedShow Answer

If the demand for letters written by Abraham Lincoln is higher than the demand for letters written by John Wilkes Booth,what would have to be true for the market equilibrium prices for these letters to be equal?

Correct AnswerverifiedShow Answer

If the number of firms producing electric cars increases and consumer preference for electric cars increases,the equilibrium quantity of electric cars will definitely increase.

Correct AnswerverifiedShow Answer

________ means the supply curve has shifted to the right,while ________ refers to a movement along a given supply curve in response to an increase in price.

Correct AnswerverifiedShow Answer

As the number of firms in a market decreases,the supply curve will shift to the left and the equilibrium price will fall.

Correct AnswerverifiedShow Answer

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) ?

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

According to a recent study,"Stricter college alcohol policies,such as raising the price of alcohol,or banning alcohol on campus,decrease the number of students who use marijuana." On the basis of this information,how would you describe alcohol and marijuana?

Correct AnswerverifiedShow Answer

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for tuna.Which panel best describes what happens in this market when there is a decrease in the productivity of commercial fishermen?

Correct AnswerverifiedShow Answer

Figure 3-4 -Refer to Figure 3-4.If the price is $20,

Correct AnswerverifiedShow Answer

Suppose that when the price of ice cream increases,Liza decreases her purchase of hot fudge.To Liza,

Correct AnswerverifiedShow Answer

Buyers scrambled to secure stocks of Australian wool following a forecast of an 11 percent decline in wool production.What happens in the Australian wool market as a result of this announcement?

Correct AnswerverifiedShow Answer

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No,a change in the price of in-line skat...
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A "change in demand" means the demand cu...
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means the supply curve has shifted to the right,while refers to a movement along a given supply curve in response to an increase in price.

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