Microeconomics 3rd Edition Krugman Wells Test Bank

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Microeconomics 3rd Edition Krugman Wells Test Bank

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ISBN-10: 1429283424

 

 

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Microeconomics 3rd Edition Krugman Wells Test Bank

ISBN-13: 978-1429283427

ISBN-10: 1429283424

 

 

 

 

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Tests, Surveys, and Pools Tests
Test Canvas : TestBanks Chapter 03: Supply and Demand
Microeconomics, 3e
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1. True/False: A competitive market occurs when ther…
Points: 0
Question
A competitive market occurs when there are many buyers and sellers of the same
good.
Answer
True
False
2. True/False: The demand curve for season tickets f…
Points: 0
Question
The demand curve for season tickets for the Miami Dolphins is the graphical
representation of how many tickets consumers want to buy at any given price.
Answer
True
False
3. True/False: An increase in demand for good X coul…
Points: 0
Question
An increase in demand for good X could be caused by a decrease in the price of X.
Answer
True
False
4. True/False: The terms decrease in demand and decr…
Points: 0
Question
The terms decrease in demand and decrease in quantity demanded can be used
interchangeably.
Answer
True
False
5. True/False: According to the law of demand, if th…
Points: 0
Question
According to the law of demand, if the price of steak increases in Rhode Island, the
demand for steak will decrease in Rhode Island.
Answer
True
False
6. True/False: An increase in income will always shi…
Points: 0
Question
An increase in income will always shift the demand curve to the right.
Answer
True
False
7. True/False: If coffee and tea are viewed as subst…
Points: 0
Question
If coffee and tea are viewed as substitutes in consumption, then an increase in the
price of coffee will increase the demand for tea.
Answer
True
False
8. True/False: After graduation many students’ deman…
Points: 0
Question
After graduation many students’ demand for used cars decreases. This could be
because used cars are considered a normal good to college graduates.
Answer
True
False
9. True/False: The supply curve for apartments in Or…
Points: 0
Question
The supply curve for apartments in Oregon reflects how many apartments landlords
are willing and able to offer for rent at a specific price.
Answer
True
False
10. True/False: An increase in the price of contact l…
Points: 0
Question
An increase in the price of contact lenses will increase the supply of contact
lenses.
Answer
True
False
11. True/False: A major input into vanilla ice cream …
Points: 0
Question
A major input into vanilla ice cream is cream. An increase in the price of cream will
reduce the quantity of vanilla ice cream supplied, but it will not reduce the supply of
vanilla ice cream.
Answer
True
False
12. True/False: If the input costs associated with su…
Points: 0
Question
If the input costs associated with supplying gasoline increases in Wisconsin, the
supply of gasoline will decrease in Wisconsin.
Answer
True
False
13. True/False: If there is an excess supply of a goo…
Points: 0
Question
If there is an excess supply of a good, the problem of scarcity does not apply to
that good.
Answer
True
False
14. True/False: Figure: Supply, Demand, and Equilibri…
Points: 0
Question
Figure: Supply, Demand, and Equilibrium
Reference: Ref 3-18
(Figure: Supply, Demand, and Equilibrium) Look at the figure Supply, Demand, and
Equilibrium. In the figure, there will be an excess supply of the good at a price of
P1.
Answer
True
False
15. True/False: Figure: Supply, Demand, and Equilibri…
Points: 0
Question
Figure: Supply, Demand, and Equilibrium
Reference: Ref 3-18
(Figure: Supply, Demand, and Equilibrium) Look at the figure Supply, Demand, and
Equilibrium. In the figure, there will be an excess demand of the good at a price of
P3.
Answer
True
False
16. True/False: Suppose there is an excess supply of …
Points: 0
Question
Suppose there is an excess supply of chemical engineers in India. Over time, the
salaries for chemical engineers will fall in India.
Answer
True
False
17. True/False: Suppose there is an excess demand for…
Points: 0
Question
Suppose there is an excess demand for water in Florida. This means that we can
expect the price of water to increase in Florida over time.
Answer
True
False
18. True/False: If consumer tastes for electric cars …
Points: 0
Question
If consumer tastes for electric cars increase over the next 10 years, we will see an
increase in the demand for electric cars, higher electric car prices, and an increase
in the equilibrium quantity of electric cars.
Answer
True
False
19. True/False: “In 2008, air travel decreased …
Points: 0
Question
“In 2008, air travel decreased substantially despite significant reductions in ticket
prices.” If this information is correct, it indicates that the law of demand did not
apply to air travel in 2008.
Answer
True
False
20. True/False: If demand decreases and supply increa…
Points: 0
Question
If demand decreases and supply increases, the direction of change in the
equilibrium quantity is unpredictable unless the relative magnitudes of the demand
and supply changes are known.
Answer
True
False
21. Multiple Choice: The market for corn in Kansas is cons…
Points: 0
Question
The market for corn in Kansas is considered to be competitive. This means there
are ________ buyers and ________ sellers of corn in Kansas.
Answer
many; few
few; many
many; many
few; few
22. Multiple Choice: The law of demand states that other t…
Points: 0
Question
The law of demand states that other things equal:
Answer
as the price increases, the quantity demanded will increase.
as the price decreases, the demand curve will shift to the right.
as the price increases, the demand will decrease.
as the price increases, the quantity demanded will decrease.
23. Multiple Choice: A negative relationship between the q…
Points: 0
Question
A negative relationship between the quantity demanded and price is called the law
of:
Answer
demand.
increasing returns.
market clearing.
supply.
24. Multiple Choice: Which of the following examples illus…
Points: 0
Question Which of the following examples illustrates the law of demand?
Answer
An increase in tuition encourages more students to enroll in college because
the quality of education has risen.
Consumers buy more personal computers because prices have fallen.
Oil companies drill for new sources of oil because oil prices are higher.
Fewer people play golf because incomes are lower.
25. Multiple Choice: ________ illustrates an inverse relat…
Points: 0
Question
________ illustrates an inverse relationship between price and quantity.
Answer
A demand curve
A supply curve
A production possibility frontier
Equilibrium
26. Multiple Choice: A negative relationship between the q…
Points: 0
Question
A negative relationship between the quantity demanded and price is called the law
of ________.
Answer
demand
marginality
efficiency
supply
27. Multiple Choice: The law of demand is illustrated by a…
Points: 0
Question
The law of demand is illustrated by a demand curve that is:
Answer
horizontal.
downward sloping.
vertical.
upward sloping.
28. Multiple Choice: The law of demand implies that:
Points: 0
Question
The law of demand implies that:
Answer
consumers are not responsive to price changes.
consumers will buy more at lower prices.
sellers will offer more on the market at higher prices.
sellers will offer less on the market at lower prices.
29. Multiple Choice: The ________ apples will decrease whe…
Points: 0
Question
The ________ apples will decrease when apple prices rise.
Answer
demand for
quantity demanded of
supply of
equilibrium of
30. Multiple Choice: A decrease in the price of a good wil…
Points: 0
Question
A decrease in the price of a good will result in:
Answer
an increase in demand.
an increase in supply.
an increase in the quantity demanded.
more being supplied.
31. Multiple Choice: Which of the following factors would …
Points: 0
Question Which of the following factors would cause a movement along the demand curve for
a particular good?
Answer
a change in the prices of related goods
a change in the price of that good
a change in the size of the population
both a change in the price of that good and a change in the size of the
population
32. Multiple Choice: A decrease in the price of eggs will …
Points: 0
Question
A decrease in the price of eggs will result in:
Answer
an increase in the demand for eggs.
an increase in the supply of eggs.
an increase in the quantity of eggs supplied.
an increase in the quantity of eggs demanded.
33. Multiple Choice: Which of the following best describes…
Points: 0
Question Which of the following best describes the law of demand?
Answer
As income taxes rise, fewer new cars are purchased.
As the price of corn rises, more acres of corn are planted.
As the price of a DVD rental rises, fewer DVDs are rented.
As the population rises, more electricity is consumed.
34. Multiple Choice: Which of the following statements is …
Points: 0
Question Which of the following statements is correct?
Answer
A change in demand is a movement along the demand curve, and a change in
quantity demanded is a shift of the demand curve.
Both a change in quantity demanded and a change in demand are movements
along the demand curve, only in different directions.
Both a change in quantity demanded and a change in demand are shifts of the
demand curve, only in different directions.
A change in quantity demanded is a movement along the demand curve, and a
change in demand is a shift of the demand curve.
35. Multiple Choice: In much of the country, homeowners ch…
Points: 0
Question
In much of the country, homeowners choose to heat their houses with either
natural gas or home heating oil. Which of the following would cause a change in
the demand for natural gas?
Answer
a change in the price of home heating oil
a change in income
an increase in consumer tastes for natural gas as an energy source
all of the above
36. Multiple Choice: Raclette is a popular wintertime dish…
Points: 0
Question
Raclette is a popular wintertime dish in Switzerland. It is essentially melted
Raclette cheese over boiled new potatoes. If the price of Raclette cheese
decreased, we would expect to see:
Answer
an increase in demand for Raclette cheese.
an increase in demand for new potatoes.
no effect on the demand for either of the Raclette ingredients, since this is a
traditional dish and its consumption does not depend on the prices of the
ingredients.
an increase in demand for Raclette cheese and for new potatoes.
37. Multiple Choice: When the economy suffers a downturn a…
Points: 0
Question When the economy suffers a downturn and the incomes of many people decrease,
vacationers are more likely to take car trips than to fly. Which of the following
provides one possible explanation for this phenomenon?
Answer
Air travel and vacation travel by car are complementary goods.
Air travel and vacation travel by car are both normal goods.
Air travel is a normal good and vacation travel by car is an inferior good.
Air travel is an inferior good and vacation travel by car is a normal good.
38. Multiple Choice: A shift of the demand curve for thin-…
Points: 0
Question
A shift of the demand curve for thin-crust pizza would not be caused by a change
in:
Answer
buyers’ incomes.
the price of thin-crust pizza.
the price of thick-crust pizza.
the popularity of thin-crust pizza.
39. Multiple Choice: If goods A and B are substitutes, a d…
Points: 0
Question
If goods A and B are substitutes, a decrease in the price of good B will:
Answer
increase the demand for good A.
increase the demand for good B.
decrease the demand for good A.
increase the demand for good B and decrease the demand for good A.
40. Multiple Choice: If goods A and Z are complements, an …
Points: 0
Question
If goods A and Z are complements, an increase in the price of good Z will:
Answer
increase the demand for good A.
decrease the demand for good A.
decrease the demand for good Z.
decrease the demand for both good A and good Z.
41. Multiple Choice: Over the past several years, consumer…
Points: 0
Question
Over the past several years, consumers have had an increasing interest in getting a
tattoo. This means that the ________ for tattoos has ________.
Answer
quantity demanded; increased
demand; decreased
demand; increased
quantity demanded; decreased
42. Multiple Choice: Which of the following will not cause…
Points: 0
Question Which of the following will not cause an increase in demand for good X?
Answer
a decrease in income if good X is an inferior good
an increase in income if good X is a normal good
a decrease in the price of good X
an increase in consumers’ taste for good X
43. Multiple Choice: A good is normal if which of the foll…
Points: 0
Question
A good is normal if which of the following is true?
Answer
When income increases, the demand remains unchanged.
When income increases, the demand decreases.
When income increases, the demand increases.
Income and the demand are unrelated.
44. Multiple Choice: A good is inferior if which of the fo…
Points: 0
Question
A good is inferior if which of the following is true?
Answer
When income increases, the demand remains unchanged.
When income increases, the demand decreases.
When income increases, the demand increases.
Income and the demand are unrelated.
45. Multiple Choice: The demand curve for videos has shift…
Points: 0
Question
The demand curve for videos has shifted to the right. What could have caused it?
Answer
a fall in the price of videos
an increase in the price of videos
an increase in the supply of videos
an increase in the incomes of buyers
46. Multiple Choice: Which of the following best describes…
Points: 0
Question Which of the following best describes demand?
Answer
A change in demand is a movement along the demand curve, and a change in
quantity demanded is a shift in the demand curve.
A change in quantity demanded is a movement along the demand curve, and a
change in demand is a shift in the demand curve.
Both a change in quantity demanded and a change in demand are shifts in the
demand curve, only in different directions.
Both a change in quantity demanded and a change in demand are movements
along the demand curve, only in different directions.
47. Multiple Choice: If people demand more of product A wh…
Points: 0
Question
If people demand more of product A when the price of B falls, then A and B are:
Answer
not related.
substitutes.
complements.
inferior goods.
48. Multiple Choice: If the demand for tires goes down whe…
Points: 0
Question
If the demand for tires goes down when the price of gas goes up, then tires and gas
are:
Answer
substitutes.
complements.
both expensive.
both inexpensive.
49. Multiple Choice: An increase in the price of hamburger…
Points: 0
Question
An increase in the price of hamburger would probably result in ________ in the
demand for hamburger buns.
Answer
a decrease
an increase
no change
random fluctuations
50. Multiple Choice: An announcement that smoking will har…
Points: 0
Question
An announcement that smoking will harm your ability to think clearly will most
likely result in:
Answer
an increase in the quantity of cigarettes demanded.
a decrease in the demand for cigarettes.
no change in smoking habits.
an increase in the price of cigarettes.
51. Multiple Choice: If steak and potatoes are complements…
Points: 0
Question
If steak and potatoes are complements, when the price of steak goes up, the
demand curve for potatoes:
Answer
shifts to the right.
shifts to the left.
stays the same.
shifts to the right and then moves back.
52. Multiple Choice: If chicken and beef are substitutes, …
Points: 0
Question
If chicken and beef are substitutes, then a fall in the price of chicken will bring
about:
Answer
an increase in the demand for beef.
a decrease in the demand for beef.
a decrease in the quantity demanded of beef.
no change in the demand for beef.
53. Multiple Choice: For most goods, purchases tend to ris…
Points: 0
Question
For most goods, purchases tend to rise with increases in buyers’ incomes and to
fall with decreases in buyers’ incomes. Such goods are known as:
Answer
inferior goods.
direct goods.
normal goods.
indirect goods.
54. Multiple Choice: An inferior good is one for which ___…
Points: 0
Question
An inferior good is one for which ________ in buyers’ income causes ________.
Answer
an increase; an increase in demand
an increase; an increase in quantity demanded
an increase; a decrease in demand
a decrease; a decrease in demand
55. Multiple Choice: Pizza is a normal good. If students’ …
Points: 0
Question
Pizza is a normal good. If students’ incomes at your college increase, the effect on
pizza would be:
Answer
an increase in the demand.
an increase in the quantity demanded.
a decrease in the demand.
no change in the demand.
56. Multiple Choice: After graduation from college, you mi…
Points: 0
Question
After graduation from college, you might have an increase in your income from a
new job. If, as a result, you decide that you will purchase more T-bone steak and
less hamburger, then for you hamburger would be considered:
Answer
a normal good.
a substitute good.
a complementary good.
an inferior good.
57. Multiple Choice: An increase in the demand for gasolin…
Points: 0
Question
An increase in the demand for gasoline today caused by concerns that gasoline
prices will be higher tomorrow is most likely attributable to which of the following?
Answer
income
consumer expectations
consumer preferences
prices of other goods
58. Multiple Choice: Which of the following would shift th…
Points: 0
Question Which of the following would shift the demand curve for new s to the right?
Answer
a decrease in the price of paper
a fall in the price of used s
an increase in college enrollment
a fall in the price of new s
59. Multiple Choice: Which of the following is likely to c…
Points: 0
Question Which of the following is likely to cause a rightward shift in the demand for home-
delivered pizza?
Answer
a lower price of pizza
a lower price of fast-food hamburgers
a higher price of pepperoni
a larger population
60. Multiple Choice: Which of the following describes two …
Points: 0
Question Which of the following describes two goods that are most likely substitutes in
consumption?
Answer
loaves of bread and sticks of butter
loaves of bread and toasters
loaves of bread and hamburger buns
loaves of bread and gasoline
61. Multiple Choice: The demand for meals at a local Apple…
Points: 0
Question
The demand for meals at a local Applebee’s will shift to the left if:
Answer
the Olive Garden offers a 10% discount coupon in the local newspaper.
the price of a meal at Applebee’s rises.
local incomes increase and Applebee’s is a normal good.
the price of gasoline falls in the local area.
62. Multiple Choice: Which will not increase demand for de…
Points: 0
Question Which will not increase demand for desktop computers?
Answer
an increase in the incomes of computer users
cool new computer games
Dell Computers going out of business
the price of notebook computers increasing
63. Multiple Choice: What will happen in the market for ca…
Points: 0
Question What will happen in the market for canned pinto beans if your income increases?
Answer
Demand will increase if pinto beans are an inferior good.
Demand will increase if pinto beans are a normal good.
Supply will increase if pinto beans are an inferior good.
Supply will increase if pinto beans are a normal good.
64. Multiple Choice: When the price of gas goes down and t…
Points: 0
Question When the price of gas goes down and the demand for tires goes up, a likely
possibility is that tires and gas are:
Answer
substitutes.
complements.
both expensive.
both inexpensive.
65. Multiple Choice: If the price of hamburger decreased, …
Points: 0
Question
If the price of hamburger decreased, it would probably result in ________ in the
demand for hamburger buns.
Answer
a decrease
an increase
no change
random fluctuations
66. Multiple Choice: The demand curve for running shoes ha…
Points: 0
Question
The demand curve for running shoes has shifted to the right. What could have
caused it?
Answer
a fall in the price of running shoes
an increase in the price of running shoes
an increase in the supply of running shoes
an increase in the income of buyers of running shoes
67. Multiple Choice: Figure: Demand for Coconuts Reference…
Points: 0
Question
Figure: Demand for Coconuts
Reference: Ref 3-1
(Figure: Demand for Coconuts) Look at the figure Demand for Coconuts. If
coconuts area normal good and the price of coconuts increases, it would be
represented in the figure as a movement from:
Answer
A to B.
B to A.
C to A.
E to B.
68. Multiple Choice: Figure: Demand for Coconuts Reference…
Points: 0
Question
Figure: Demand for Coconuts
Reference: Ref 3-1
(Figure: Demand for Coconuts) Look at the figure Demand for Coconuts. If fish is a
substitute good for coconuts and the price of fish increases, it will be represented
in the figure as a movement from:
Answer
A to C.
B to A.
C to A.
B to E.
69. Multiple Choice: Figure: Demand for Coconuts Reference…
Points: 0
Question
Figure: Demand for Coconuts
Reference: Ref 3-1
(Figure: Demand for Coconuts) Look at the figure Demand for Coconuts. If
coconuts are a normal good and the income level of consumers falls, it will be
represented in the figure as a movement from:
Answer
A to C.
B to A.
C to A.
E to B.
70. Multiple Choice: Figure: Demand for Coconuts Reference…
Points: 0
Question
Figure: Demand for Coconuts
Reference: Ref 3-1
(Figure: Demand for Coconuts) Look at the figure Demand for Coconuts. If there is
an increase in preference for coconuts, it will be represented in the figure as a
movement from:
Answer
A to C.
B to A.
C to A.
B to E.
71. Multiple Choice: Figure: Demand for Coconuts Reference…
Points: 0
Question
Figure: Demand for Coconuts
Reference: Ref 3-1
(Figure: Demand for Coconuts) Look at the figure Demand for Coconuts. If
coconuts are a normal good and consumers believe that the price of coconuts will
rise significantly in the near future, it will be represented in the figure as a
movement from:
Answer
C to A.
A to B.
B to E.
E to B.
72. Multiple Choice: Reference: Ref 3-2 (Table: The Deman…
Points: 0
Question
Reference: Ref 3-2
(Table: The Demand for Chocolate-Covered Peanuts.) Look at the table The
Demand for Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts
is $0.60, the quantity demanded by George is ________ bags per month.
Answer
10
15
25
30
73. Multiple Choice: Reference: Ref 3-2 (Table: The Deman…
Points: 0
Question
Reference: Ref 3-2
(Table: The Demand for Chocolate-Covered Peanuts) Look at the table The Demand
for Chocolate-Covered Peanuts.) Barbara demands 20 bags of chocolate-covered
peanuts when the price of each bag is ________.
Answer
$0.90
$0.80
$0.70
$0.60
74. Multiple Choice: Reference: Ref 3-2 (Table: The Deman…
Points: 0
Question
Reference: Ref 3-2
(Table: The Demand for Chocolate-Covered Peanuts) Look at the table The Demand
for Chocolate-Covered Peanuts. If George, Barbara, and Dan are the only three
buyers in the market and the price of a bag of chocolate-covered peanuts is $0.80,
the total market demand is ________ bags per month.
Answer
70
80
105
280
75. Multiple Choice: Reference: Ref 3-2 (Table: The Deman…
Points: 0
Question
Reference: Ref 3-2
(Table: The Demand for Chocolate-Covered Peanuts) Look at the table The Demand
for Chocolate-Covered Peanuts. If George, Barbara, and Dan are the only three
buyers in the market and the price of a bag of chocolate-covered peanuts is $0.50,
the total market demand is ________ bags per month.
Answer
80
105
210
280
76. Multiple Choice: Figure: Demand for DVDs Reference: Re…
Points: 0
Question Figure: Demand for DVDs
Reference: Ref 3-3
(Figure: Demand for DVDs) Look at the figure Demand for DVDs. A decrease in the rental
price of DVD would result in a change illustrated by:
Answer
the move from f to g in panel A.
the move from h to i in panel B.
the move from j to k in panel C.
the move from l to m in panel D.
77. Multiple Choice: Figure: Demand for DVDs Reference: Re…
Points: 0
Question
Figure: Demand for DVDs
Reference: Ref 3-3
(Figure: Demand for DVDs) Look at the figure Demand for DVDs. A decrease in the price of
DVD players (a complement) would result in a change illustrated by:
Answer
the move from f to g in panel A.
the move from h to i in panel B.
the move from j to k in panel C.
the move from l to m in panel D.
78. Multiple Choice: Figure: Demand for DVDs Reference: Re…
Points: 0
Question
Figure: Demand for DVDs
Reference: Ref 3-3
(Figure: Demand for DVDs) Look at the figure Demand for DVDs. A decrease in the price of
movie tickets (a substitute) would result in a change illustrated by:
Answer
the move from f to g in panel A.
the move from h to i in panel B.
the move from j to k in panel C.
the move from l to m in panel D.
79. Multiple Choice: _________ illustrates a direct relati…
Points: 0
Question
_________ illustrates a direct relationship between price and quantity.
Answer
A demand curve
A supply curve
A production possibility frontier
Equilibrium
80. Multiple Choice: The typical supply curve illustrates …
Points: 0
Question
The typical supply curve illustrates that:
Answer
other things equal, the quantity supplied for a good is inversely related to the
price of a good.
other things equal, the supply of the good creates its own demand for the
good.
other things equal, the quantity supplied for a good is positively related to the
price of a good.
price and quantity supplied are unrelated.
81. Multiple Choice: When the price of lamps increases, the:
Points: 0
Question When the price of lamps increases, the:
Answer
supply increases.
quantity supplied increases.
supply decreases.
quantity supplied decreases.
82. Multiple Choice: When the price of armchairs increases…
Points: 0
Question When the price of armchairs increases, the:
Answer
quantity supplied increases.
supply increases.
quantity supplied decreases.
supply decreases.
83. Multiple Choice: A decrease in supply means:
Points: 0
Question
A decrease in supply means:
Answer
a shift to the left of the entire supply curve.
a movement down the supply curve as prices go down.
that less will be demanded at every price.
that more will be supplied at every price.
84. Multiple Choice: The primary difference between a chan…
Points: 0
Question
The primary difference between a change in supply and a change in the quantity
supplied is that:
Answer
a change in quantity supplied is a movement along the supply curve, while a
change in supply is a shift in the supply curve.
both a change in quantity supplied and a change in supply are movements
along the supply curve, only in different directions.
a change in supply is related to the supply curve, while a change in quantity
supplied is related to shifts in the demand curve that elicit a change in supply.
a change in supply is a movement along the supply curve, while a change in
quantity supplied is a shift in the supply curve.
85. Multiple Choice: If the price of a commodity increases…
Points: 0
Question
If the price of a commodity increases, you would expect the:
Answer
supply to increase.
quantity supplied to increase.
quantity supplied to decrease.
supply curve to shift to the right.
86. Multiple Choice: In the market for tacos, each of the …
Points: 0
Question
In the market for tacos, each of the following shifts the supply curve to the left
except:
Answer
an increase in the price of beef.
an increase in the wages of taco shop workers.
fewer taco shops.
a decrease in the price of tacos.
87. Multiple Choice: In the local market for coffee, what …
Points: 0
Question
In the local market for coffee, what would happen if Joyce’s Java and Everyday
Joe’s coffee shops go out of business?
Answer
The supply curve shifts to the right.
The demand curve shifts to the left.
The supply curve shifts to the left.
The demand curve shifts to the right.
88. Multiple Choice: Which of the following is not a deter…
Points: 0
Question Which of the following is not a determinant of supply?
Answer
expectations regarding future prices
the technology of production
the cost of production
consumer tastes
89. Multiple Choice: Which of the following influences doe…
Points: 0
Question Which of the following influences does not shift the supply curve?
Answer
people deciding that they want to buy more of the product
a decrease in the price firms expect to receive in the future
a rise in the wages paid to workers
the development of a new production technology
90. Multiple Choice: Which of the following will not cause…
Points: 0
Question Which of the following will not cause an increase in the supply of good X?
Answer
an improvement in the technology used to produce good X
an increase in the price of good Y, a substitute
an increase in the price of inputs used to produce good X
a decrease in the price of inputs used to produce good X
91. Multiple Choice: Consider the supply curve for cotton …
Points: 0
Question
Consider the supply curve for cotton shirts. An increase in the price of cotton will:
Answer
increase the supply of cotton shirts.
decrease the supply of cotton shirts.
increase the quantity supplied of cotton shirts.
decrease the demand for cotton shirts.
92. Multiple Choice: Over the past few years, the technolo…
Points: 0
Question
Over the past few years, the technology associated with producing flat-panel
televisions has improved. This has led to ________ in ________ flat-panel
televisions.
Answer
an increase; the supply of
an increase; the demand for
a decrease; the supply of
a decrease; the quantity supplied of
93. Multiple Choice: A technological advance in the produc…
Points: 0
Question
A technological advance in the production of automobiles will:
Answer
increase the demand for automobiles.
increase the supply of automobiles.
decrease the demand for automobiles.
decrease the supply of automobiles.
94. Multiple Choice: An increase in supply of a good is ca…
Points: 0
Question
An increase in supply of a good is caused by:
Answer
input prices rising.
a fall in the price of the good.
an increase in the number of sellers.
expectations of future price increases.
95. Multiple Choice: An increase in supply is caused by:
Points: 0
Question
An increase in supply is caused by:
Answer
an increase in input prices.
suppliers’ expectations of higher prices in the future.
an increase in the price of the good.
a decrease in the price of goods that are used in production.
96. Multiple Choice: A decrease in supply is caused by:
Points: 0
Question
A decrease in supply is caused by:
Answer
an increase in the price of goods that are used in production.
suppliers’ expectations of lower prices in the future.
an advancement in the technology for producing the good.
an increase in the number of producers.
97. Multiple Choice: If the price of mozzarella cheese (an…
Points: 0
Question
If the price of mozzarella cheese (an ingredient in pizza) declines, there would be:
Answer
a decrease in the supply of pizza.
an increase in the supply of pizza.
an increase in the quantity of pizza supplied.
no change in the supply of pizza.
98. Multiple Choice: An increase in supply is caused by:
Points: 0
Question
An increase in supply is caused by:
Answer
an increase in input prices.
a decrease in the number of sellers in the market.
suppliers’ expectations of higher prices in the future.
an advancement in the technology for producing the good.
99. Multiple Choice: A decrease in supply is caused by:
Points: 0
Question
A decrease in supply is caused by:
Answer
a decrease in input prices.
an increase in the number of sellers in the market.
suppliers’ expectations of higher prices in the future.
an advancement in the technology for producing the good.
100. Multiple Choice: Which of the following would not caus…
Points: 0
Question Which of the following would not cause the supply curve to shift?
Answer
a change in the technology of production
a change in factor costs
a change in the price of the good
a change in suppliers’ expectations of future prices
101. Multiple Choice: A shift to the left of a supply curve…
Points: 0
Question
A shift to the left of a supply curve is caused by:
Answer
an increase in the number of sellers.
a technological improvement in production.
an increase in the cost of an input.
an increase in the number of buyers.
102. Multiple Choice: Which of the following is most likely…
Points: 0
Question Which of the following is most likely to shift the supply of milk to the right?
Answer
a tax on each gallon of milk produced
an increase in household income and milk is a normal good
a decrease in the price of feed given to dairy cows
the bankruptcy of many small dairy farms
103. Multiple Choice: In the market for wheat, what would h…
Points: 0
Question
In the market for wheat, what would happen if the price of ethanol (which is made
from corn) increases dramatically?
Answer
an increase in supply of wheat
a decrease in supply of wheat
an increase in demand for wheat
a decrease in demand for wheat
104. Multiple Choice: Which of the following will not cause…
Points: 0
Question Which of the following will not cause an increase in the supply of cornflakes in the
short run?
Answer
an increase in the price of cornflakes
a cost-saving improvement in the technology of corn production
a reduction in the price of corn
the expectation by producers that the price of cornflakes will fall in the future
105. Multiple Choice: Figure: Supply of Coconuts Reference:…
Points: 0
Question
Figure: Supply of Coconuts
Reference: Ref 3-4
(Figure: Supply of Coconuts) Look at the figure Supply of Coconuts. If the price of
coconuts decreased, it would be represented in the figure as a movement from:
Answer
A to B.
B to A.
C to A.
E to B.
106. Multiple Choice: Figure: Supply of Coconuts Reference:…
Points: 0
Question
Figure: Supply of Coconuts
Reference: Ref 3-4
(Figure: Supply of Coconuts) Look at the figure Supply of Coconuts. If the prices of
inputs (e.g., labor, fertilizer, and fuel) used to produce and transport coconuts
increased, it would be represented in the figure as a movement from:
Answer
A to B.
B to A.
C to A.
E to B.
107. Multiple Choice: Figure: Supply of Coconuts Reference:…
Points: 0
Question
Figure: Supply of Coconuts
Reference: Ref 3-4
(Figure: Supply of Coconuts) Look at the figure Supply of Coconuts. If the prices of
inputs (e.g., labor, fertilizer, and fuel) used to produce and transport coconuts
decreased, it would be represented in the figure as a movement from:
Answer
A to B.
B to A.
C to A.
E to B.
108. Multiple Choice: Figure: Supply of Coconuts Reference:…
Points: 0
Question
Figure: Supply of Coconuts
Reference: Ref 3-4
(Figure: Supply of Coconuts) Look at the figure Supply of Coconuts. An
improvement in the technology used to harvest coconuts (e.g., a faster, less
expensive coconut picker) would be represented in the figure as a movement from:
Answer
A to C.
B to A.
C to A.
B to E.
109. Multiple Choice: Figure: Supply of Coconuts Reference:…
Points: 0
Question
Figure: Supply of Coconuts
Reference: Ref 3-4
(Figure: Supply of Coconuts) Look at the figure Supply of Coconuts. An
expectation on the part of coconut suppliers that the price of coconuts will be
significantly higher in the very near future would be represented in the figure as a
movement from
Answer
A to B.
B to A.
A to C.
B to E.
110. Multiple Choice: Figure: The Supply of DVD Rentals Ref…
Points: 0
Question Figure: The Supply of DVD Rentals
Reference: Ref 3-5
(Figure: The Supply of DVD Rentals) Look at the figure The Supply of DVD Rentals. A
decrease in the price of DVD rentals would result in a change illustrated by the move from:
Answer
n to o in panel A.
p to q in panel B.
s to t in panel C.
u to v in panel D.
111. Multiple Choice: Figure: The Supply of DVD Rentals Ref…
Points: 0
Question Figure: The Supply of DVD Rentals
Reference: Ref 3-5
(Figure: The Supply of DVD Rentals) Look at the figure The Supply of DVD Rentals. A
decrease in the price of DVDs sold by movie producers to rental stores would result in a
change illustrated by the move from:
Answer
n to o in panel A.
p to q in panel B.
s to t in panel C.
u to v in panel D.
112. Multiple Choice: Reference: Ref 3-6 (Table: Supply of…
Points: 0
Question
Reference: Ref 3-6
(Table: Supply of Lemonade) Look at the table Supply of Lemonade. When the
price of lemonade is $1 per cup, the quantity of lemonade supplied by Eli will be:
Answer
40 cups.
90 cups.
10 cups.
25 cups.
113. Multiple Choice: Reference: Ref 3-6 (Table: Supply of…
Points: 0
Question
Reference: Ref 3-6
(Table: Supply of Lemonade) Look at the table Supply of Lemonade. If the price of
lemonade is $1 per cup, the total quantity of lemonade supplied will be:
Answer
50 cups.
80 cups.
25 cups.
90 cups.
114. Multiple Choice: If the market for buffalo meat is in …
Points: 0
Question
If the market for buffalo meat is in equilibrium, the price of buffalo meat will probably
________ in the near future.
Answer
increase
not change
decrease
increase considerably
115. Multiple Choice: Market equilibrium occurs when:
Points: 0
Question
Market equilibrium occurs when:
Answer
there is no incentive for prices to change in the market.
quantity demanded equals quantity supplied.
the market clears.
there is no incentive for prices to change in the market, quantity demanded
equals quantity supplied, and the market clears.
116. Multiple Choice: The market equilibrium is found at the:
Points: 0
Question
The market equilibrium is found at the:
Answer
price where quantity demanded exceeds quantity supplied.
price where quantity demanded equals quantity supplied.
price where quantity supplied exceeds quantity demanded.
highest price the market will bear.
117. Multiple Choice: Suppose the equilibrium price of good…
Points: 0
Question
Suppose the equilibrium price of good Y is $5 and the equilibrium quantity is 150
units. If the price of good Y is $12:
Answer
the quantity demanded will be greater than 150 units.
the quantity supplied will be less than 150 units.
there will be an excess demand for good Y.
there will be an excess supply of good Y.
118. Multiple Choice: Excess supply occurs when:
Points: 0
Question
Excess supply occurs when:
Answer
the price is above the equilibrium price.
the quantity demanded exceeds the quantity supplied.
the price is below the equilibrium price.
the quantity demanded exceeds the quantity supplied and when the price is
below the equilibrium price.
119. Multiple Choice: If the quantity supplied in a market …
Points: 0
Question
If the quantity supplied in a market exceeds the quantity demanded in a market,
we would expect prices to:
Answer
stay the same.
rise.
fall.
rise in order to clear the market.
120. Multiple Choice: If the quantity of housing supplied i…
Points: 0
Question
If the quantity of housing supplied in a community is greater than the quantity of
houses demanded, the existing price:
Answer
is above the market equilibrium price.
will rise to clear the market.
will either rise or remain unchanged.
is below the market equilibrium price.
121. Multiple Choice: If the supply and demand curves inter…
Points: 0
Question
If the supply and demand curves intersect at a price of $47, then any price above
that would result in:
Answer
a shortage.
a surplus.
equilibrium.
an increase in demand.
122. Multiple Choice: If the supply and demand curves inter…
Points: 0
Question
If the supply and demand curves intersect at a price of $14, then any price below
that would result in:
Answer
a shortage.
a surplus.
equilibrium.
an increase in demand.
123. Multiple Choice: Suppose the equilibrium price of good…
Points: 0
Question
Suppose the equilibrium price of good X is $25 and the equilibrium quantity is 124
units. If the price of good X is $2:
Answer
there will be excess demand for good X.
there will be an excess supply of good X.
the market will clear.
the quantity demanded of good X will be less than 124 units.
124. Multiple Choice: Figure: Demand and Supply of Gasoline…
Points: 0
Question
Figure: Demand and Supply of Gasoline
Reference: Ref 3-7
(Figure: Demand and Supply of Gasoline) Look at the figure Demand and Supply of
Gasoline. The initial equilibrium price and quantity (at intersection of S1 and D) of
gasoline are:
Answer
$2.00 and 450 gallons.
$1.50 and 400 gallons.
$2.00 and 200 gallons.
$2.50 and 300 gallons.
125. Multiple Choice: Figure: Demand and Supply of Gasoline…
Points: 0
Question
Figure: Demand and Supply of Gasoline
Reference: Ref 3-7
(Figure: Demand and Supply of Gasoline) Look at the figure Demand and Supply of
Gasoline. A factor that may have changed supply from S1 to S2 is:
Answer
better technology in the production of gasoline.
increased demand.
lower labor productivity in gasoline production.
increased prices of substitutes for gasoline.
126. Multiple Choice: Figure: Demand and Supply of Gasoline…
Points: 0
Question
Figure: Demand and Supply of Gasoline
Reference: Ref 3-7
(Figure: Demand and Supply of Gasoline) Look at the figure Demand and Supply of
Gasoline. Given the equilibrium after a change in supply from S1 to S2:
Answer
at the old price of $2.50, there will be pressure for the price to fall.
the new price will be $2.00.
the new quantity will be 600.
the price will remain constant.
127. Multiple Choice: Figure: Demand and Supply of Gasoline…
Points: 0
Question
Figure: Demand and Supply of Gasoline
Reference: Ref 3-7
(Figure: Demand and Supply of Gasoline) Look at the figure Demand and Supply of
Gasoline. Given the initial equilibrium of S1 and D, any price lower than ________
will create pressure for the price to ________.
Answer
$2.00; fall
$2.50; rise
$3.00; rise
$2.50; fall
128. Multiple Choice: Figure: Demand and Supply of Gasoline…
Points: 0
Question
Figure: Demand and Supply of Gasoline
Reference: Ref 3-7
(Figure: Demand and Supply of Gasoline) Look at the figure Demand and Supply of
Gasoline. When the supply curve shifted from the initial equilibrium, the new
intersection of supply and demand has a price of ________ and quantity of 400.
This supply shift could have resulted from ________.
Answer
$1.50; an increase in consumers’ income
$1.50; an increase in refining technology
$2.00; an increase in the number of buyers
$2.00; an increase in consumers’ income
129. Multiple Choice: Figure: Demand and Supply of Gasoline…
Points: 0
Question
Figure: Demand and Supply of Gasoline
Reference: Ref 3-7
(Figure: Demand and Supply of Gasoline) Look at the figure Demand and Supply of
Gasoline. What might cause the supply curve to shift from S2 back to the initial
supply curve S1?
Answer
The Organization of Petroleum Exporting Countries (OPEC) restricts the
production of crude oil.
The Organization of Petroleum Exporting Countries (OPEC) increases the
production of crude oil.
Americans want to buy more gas.
Technology in the refinement of gasoline greatly improves.
130. Multiple Choice: A competitive market with flexible pr…
Points: 0
Question
A competitive market with flexible prices and many buyers and sellers will:
Answer
eliminate surpluses.
eliminate shortages.
reach equilibrium.
eliminate surpluses and shortages and reach equilibrium.
131. Multiple Choice: Reference: Ref 3-8 (Table: The Marke…
Points: 0
Question
Reference: Ref 3-8
(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market
for Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.60,
the price will:
Answer
not change.
fall to $0.30.
fall to $0.50.
rise to $0.70.
132. Multiple Choice: Reference: Ref 3-8 (Table: The Marke…
Points: 0
Question
Reference: Ref 3-8
(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market
for Chocolate-Covered Peanuts. The equilibrium quantity and the equilibrium price
are ________ bags and ________.
Answer
140; $0.40
175; $0.60
175; $0.80
210; $0.50
133. Multiple Choice: Reference: Ref 3-8 (Table: The Marke…
Points: 0
Question
Reference: Ref 3-8
(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market
for Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.80,
there is:
Answer
a surplus of 140 bags per month.
a shortage of 140 bags per month.
a surplus of 70 bags per month.
a shortage of 70 bags per month.
134. Multiple Choice: Reference: Ref 3-8 (Table: The Marke…
Points: 0
Question
Reference: Ref 3-8
(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market
for Chocolate-Covered Peanuts. A surplus of 210 bags of chocolate-covered
peanuts exists if the price is ________ per bag.
Answer
$0.90
$0.80
$0.60
$0.40
135. Multiple Choice: Reference: Ref 3-8 (Table: The Marke…
Points: 0
Question
Reference: Ref 3-8
(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market
for Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.50,
there is:
Answer
a surplus of 35 bags per month.
a shortage of 35 bags per month.
a surplus of 70 bags per month.
a shortage of 70 bags per month.
136. Multiple Choice: Reference: Ref 3-8 (Table: The Marke…
Points: 0
Question
Reference: Ref 3-8
(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market
for Chocolate-Covered Peanuts. A shortage of 210 bags of chocolate-covered
peanuts exists if the price is ________ per bag.
Answer
$0.80
$0.60
$0.40
$0.30
137. Multiple Choice: What is the difference between a shor…
Points: 0
Question What is the difference between a shortage and scarcity?
Answer
Scarcity will almost always exist, but a shortage will exist only if the price is
kept below the equilibrium level.
Scarcity is a result of two or more alternative uses, and quantities of supply
and demand adjusting to flexible prices will create shortages.
A shortage will exist when a good is scarce.
There is no distinction between the two. They are the same thing.
138. Multiple Choice: Figure: The Demand and Supply of Whea…
Points: 0
Question
Figure: The Demand and Supply of Wheat
Reference: Ref 3-9
(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and
Supply of Wheat. What is the equilibrium price in this wheat market?
Answer
$6
$4
$2
$8
139. Multiple Choice: Figure: The Demand and Supply of Whea…
Points: 0
Question
Figure: The Demand and Supply of Wheat
Reference: Ref 3-9
(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and
Supply of Wheat. If a price of $10 temporarily exists in this market:
Answer
a shortage of 10,000 bushels will result.
a shortage of 8,000 bushels will result.
a surplus of 8,000 bushels will result.
a surplus of 4,000 bushels will result.
140. Multiple Choice: Figure: The Demand and Supply of Whea…
Points: 0
Question
Figure: The Demand and Supply of Wheat
Reference: Ref 3-9
(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and
Supply of Wheat. A price of ________ will result in a ________.
Answer
$6; shortage
$8; surplus
$8; shortage
$4; surplus
141. Multiple Choice: Figure: The Demand and Supply of Whea…
Points: 0
Question
Figure: The Demand and Supply of Wheat
Reference: Ref 3-9
(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and
Supply of Wheat. If there were an increase in demand of 2,000 bushels at each
price, the equilibrium price and quantity would be ________ and ________ bushels,
respectively.
Answer
$5; 5,000
$6; 7,000
$7; 7,000
$8; 8,000
142. Multiple Choice: Figure: The Demand and Supply of Whea…
Points: 0
Question
Figure: The Demand and Supply of Wheat
Reference: Ref 3-9
(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and
Supply of Wheat. If there were a decrease in supply of 2,000 bushels at each price,
the equilibrium price and quantity would be ________ and ________ bushels,
respectively.
Answer
$5; 5,000
$7; 5,000
$6; 4,000
$8; 6,000
143. Multiple Choice: Figure: The Demand and Supply of Whea…
Points: 0
Question
Figure: The Demand and Supply of Wheat
Reference: Ref 3-9
(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and
Supply of Wheat. A temporary price of $2 in this market would result in:
Answer
a surplus of 4,000 bushels.
a shortage of 8,000 bushels.
a shortage of 10,000 bushels.
a surplus of 10,000 bushels.
144. Multiple Choice: Figure: The Demand and Supply of Whea…
Points: 0
Question
Figure: The Demand and Supply of Wheat
Reference: Ref 3-9
(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and
Supply of Wheat. What is the equilibrium quantity in this wheat market?
Answer
12,000 bushels
2,000 bushels
10,000 bushels
6,000 bushels
145. Multiple Choice: Figure: The Demand and Supply of Whea…
Points: 0
Question
Figure: The Demand and Supply of Wheat
Reference: Ref 3-9
(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and
Supply of Wheat. If a price of $8 temporarily exists in this market:
Answer
a shortage of 2,000 bushels will result.
a surplus of 4,000 bushels will result.
a shortage of 4,000 bushels will result.
a surplus of 6,000 bushels will result.
146. Multiple Choice: Figure: The Demand and Supply of Whea…
Points: 0
Question
Figure: The Demand and Supply of Wheat
Reference: Ref 3-9
(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and
Supply of Wheat. A temporary price of $4 in this market would result in:
Answer
a surplus of 4,000 bushels.
a shortage of 2,000 bushels.
a shortage of 4,000 bushels.
a surplus of 2,000 bushels.
147. Multiple Choice: Reference: Ref 3-10 (Table: The Lemo…
Points: 0
Question
Reference: Ref 3-10
(Table: The Lemonade Market) Look at the table The Lemonade Market. If the price
of a cup of lemonade is $1.00, there will be ________ in the market.
Answer
equilibrium
a shortage of 150 cups
a shortage of 75 cups
a surplus of 75 cups
148. Multiple Choice: Reference: Ref 3-10 (Table: The Lemo…
Points: 0
Question
Reference: Ref 3-10
(Table: The Lemonade Market) Look at the table The Lemonade Market. If the price
of lemonade is $1.25 per cup, we would expect to see:
Answer
a rising price to eliminate the shortage.
a rising price to eliminate the surplus.
a falling price to eliminate the shortage.
a market in equilibrium.
149. Multiple Choice: Figure: The DVD Rental Market Referen…
Points: 0
Question
Figure: The DVD Rental Market
Reference: Ref 3-11
(Figure: The DVD Rental Market) Look at the figure The DVD Rental Market. The
figure shows the weekend rental market for DVDs in Collegetown. The equilibrium
price for DVD rentals is ________ and the equilibrium quantity is ________.
Answer
$5; 50
$3; 30
$9; 90
$6; 40
150. Multiple Choice: Figure: The DVD Rental Market Referen…
Points: 0
Question
Figure: The DVD Rental Market
Reference: Ref 3-11
(Figure: The DVD Rental Market) Look at the figure The DVD Rental Market. If the
rental price of DVDs rises from $5 per rental to $7 per rental, then:
Answer
demand will decrease from 50 to 30 rentals per weekend.
the quantity demanded will decrease from 50 rentals per weekend to 30 rentals
per weekend.
supply will increase from 50 to 70 rentals per weekend.
the quantity supplied will increase from 50 to 60 rentals per weekend.
151. Multiple Choice: Figure: The DVD Rental Market Referen…
Points: 0
Question
Figure: The DVD Rental Market
Reference: Ref 3-11
(Figure: The DVD Rental Market) Look at the figure The DVD Rental Market. At a
rental price of $3, there will be
Answer
equilibrium in the rental market for DVDs.
an increase in demand.
an excess supply of 40 DVD rentals.
an excess demand of 40 DVD rentals.
152. Multiple Choice: Figure: The DVD Rental Market Referen…
Points: 0
Question
Figure: The DVD Rental Market
Reference: Ref 3-11
(Figure: The DVD Rental Market) Look at the figure The DVD Rental Market. At a
rental price of $6, there will be:
Answer
equilibrium in the rental market for DVDs.
a decrease in demand.
an excess supply of 20 DVD rentals.
an excess demand of 20 DVD rentals.
153. Multiple Choice: Which of the following always results…
Points: 0
Question Which of the following always results in an increase in price and quantity?
Answer
an increase in supply and a decrease in demand
an increase in demand with no change in supply
an increase in supply with no change in demand
a decrease in demand and supply
154. Multiple Choice: The market price of airline flights i…
Points: 0
Question
The market price of airline flights increased recently. Some economists suggest
that the price increased because there has been an increase in the number of
business travelers. They believe that in the market for flights:
Answer
supply increased.
supply decreased.
demand increased.
demand decreased.
155. Multiple Choice: If tortilla chips are a normal good, …
Points: 0
Question
If tortilla chips are a normal good, what happens to equilibrium price and quantity
when there is an increase in income?
Answer
Equilibrium price decreases and equilibrium quantity increases.
Equilibrium price decreases and equilibrium quantity decreases.
Equilibrium price increases and equilibrium quantity increases.
Equilibrium price increases and equilibrium quantity decreases.
156. Multiple Choice: In the market for tacos, you observe …
Points: 0
Question
In the market for tacos, you observe that the equilibrium price and quantity have
increased. This can be caused only by:
Answer
an increase in the price of beef.
an increase in the wages of taco shop workers.
fewer taco shops.
an increase in the incomes of people who eat tacos.
157. Multiple Choice: Suppose you manage a corner grocery s…
Points: 0
Question
Suppose you manage a corner grocery store. If peanut butter is an inferior good,
what do you suppose would happen to the price and quantity sold of peanut butter
as incomes fall during an economic recession?
Answer
The price would increase and the quantity would decrease.
The price and quantity would both increase.
The price and quantity would both decrease.
The price would decrease and the quantity would increase.
158. Multiple Choice: A newspaper story recently reported t…
Points: 0
Question
A newspaper story recently reported that the price of new cars has decreased and
the quantity of new cars sold has dropped. The new price and quantity could have
been caused by:
Answer
a decrease in buyers’ incomes.
an increase in buyers’ incomes.
an increase in production costs.
a decrease in production costs.
159. Multiple Choice: A shift of a demand curve to the righ…
Points: 0
Question
A shift of a demand curve to the right, all other things unchanged, will:
Answer
increase equilibrium price and quantity.
decrease equilibrium price and quantity.
decrease equilibrium quantity and increase equilibrium price.
increase equilibrium quantity and decrease equilibrium price.
160. Multiple Choice: For consumers, pizza and hamburgers a…
Points: 0
Question
For consumers, pizza and hamburgers are substitutes. A rise in the price of a
pizza causes ________ in the equilibrium price of a hamburger and ________ in
the equilibrium quantity of hamburgers.
Answer
a rise; an increase
a rise; a decrease
a fall; an increase
a fall; a decrease
161. Multiple Choice: If the economy booms and peoples’ inc…
Points: 0
Question
If the economy booms and peoples’ incomes rise, then the demand curve for a
normal good like new houses will ________ and the equilibrium quantity of new
houses produced will ________.
Answer
shift to the right; increase
not shift; not change
not shift; increase
shift to the left; decrease
162. Multiple Choice: A new wonder diet that results in a d…
Points: 0
Question
A new wonder diet that results in a dramatic weight loss sweeps through America.
The key to the diet is to eat unlimited amounts of red meat (beef) but no poultry or
carbohydrate-rich foods. As millions of Americans switch to the new diet, we can
expect:
Answer
an increase in the demand for beef, leading to a shift to the right in the demand
curve for beef and higher beef prices.
an increase in the demand for beef, leading to a shift to the right in the demand
curve for beef and lower beef prices.
a decrease in the supply of beef, leading to a shift to the left in the supply
curve for beef and higher beef prices.
a decrease in the demand for beef, leading to a shift to the left in the demand
curve for beef and higher beef prices.
163. Multiple Choice: A new wonder diet that results in a d…
Points: 0
Question
A new wonder diet that results in a dramatic weight loss sweeps through America.
The key to the diet is to eat unlimited amounts of red meat (beef) but no poultry or
carbohydrate-rich foods. As millions of Americans switch to the new diet, we can
expect:
Answer
a decrease in the supply of poultry, leading to a shift to the left in the supply
curve for poultry and higher poultry prices.
an increase in the supply of poultry, leading to a shift to the right in the supply
curve for poultry and higher poultry prices.
a decrease in the demand for poultry, leading to a shift to the right in the
demand curve for poultry and lower beef prices.
a decrease in the demand for poultry, leading to a shift to the left in the
demand curve for poultry and lower poultry prices.
164. Multiple Choice: Consider two competing motorcycle man…
Points: 0
Question
Consider two competing motorcycle manufacturers, Harley-Davidson and Honda. If
Harley-Davidson raises the price of its motorcycles, we can expect:
Answer
a shift to the right in the supply curve of Hondas and lower prices for Hondas.
a shift to the left in the supply curve of Hondas and higher prices for Hondas.
a shift to the right in the demand curve for Hondas and higher prices for
Hondas.
a shift to the left in the demand curve for Hondas and lower prices for Hondas.
165. Multiple Choice: An increase in demand with no change …
Points: 0
Question
An increase in demand with no change in supply will lead to ________ in
equilibrium quantity and ________ in equilibrium price.
Answer
an increase; an increase
an increase; a decrease
a decrease; an increase
a decrease; a decrease
166. Multiple Choice: French fries and hamburgers are compl…
Points: 0
Question
French fries and hamburgers are complements. Suppose the cost of the
ingredients used to make hamburgers risesRemember, that the price of a hamburger rises.
Then the equilibrium relative price of french fries ________ and the equilibrium
quantity ________.
Answer
rises; increases
rises; decreases
falls; increases
falls; decreases
167. Multiple Choice: A decrease in demand, with no change …
Points: 0
Question
A decrease in demand, with no change in supply, will lead to ________ in
equilibrium quantity and ________ in equilibrium price.
Answer
an increase; an increase
an increase; a decrease
a decrease; an increase
a decrease; a decrease
168. Multiple Choice: Given a supply curve that is positive…
Points: 0
Question
Given a supply curve that is positively sloped and a demand curve for a normal
good that is negatively sloped, an increase in income will most likely result in:
Answer
an increase in equilibrium price and quantity.
a decrease in equilibrium price and an increase in equilibrium quantity.
a decrease in both equilibrium price and quantity.
an increase in equilibrium price and a decrease in equilibrium quantity.
169. Multiple Choice: An increase in demand, all other thin…
Points: 0
Question
An increase in demand, all other things unchanged, will result in ________ in
equilibrium price and ________ in equilibrium quantity.
Answer
an increase; an increase
a decrease; a decrease
a decrease; an increase
an increase; a decrease
170. Multiple Choice: A decrease in supply, with no change …
Points: 0
Question
A decrease in supply, with no change in demand, will lead to ________ in
equilibrium quantity and ________ in equilibrium price.
Answer
an increase; an increase
an increase; a decrease
a decrease; an increase
a decrease; a decrease
171. Multiple Choice: An increase in supply, with no change…
Points: 0
Question
An increase in supply, with no change in demand, will lead to ________ in
equilibrium quantity and ________ in equilibrium price.
Answer
an increase; an increase
an increase; a decrease
a decrease; an increase
a decrease; a decrease
172. Multiple Choice: You notice that the price of DVD play…
Points: 0
Question
You notice that the price of DVD players falls and the quantity of DVD players sold
increases. This set of observations can be the result of the:
Answer
demand for DVD players shifting to the right.
demand for DVD players shifting to the left.
supply of DVD players shifting to the right.
supply of DVD players shifting to the left.
173. Multiple Choice: In the market for corn tortilla chips…
Points: 0
Question
In the market for corn tortilla chips, what would cause a price increase?
Answer
Doctors tell their patients that tortilla chips are unhealthy.
There is a technological advancement in the tortilla chip production process.
A fungus kills much of the corn crop in Nebraska.
The price of salsa triples.
174. Multiple Choice: The market price of airline flights i…
Points: 0
Question
The market price of airline flights increased recently. Some economists suggest
that the price increased because several airlines went out of business. They believe
that in the market for flights:
Answer
supply increased.
supply decreased.
demand increased.
demand decreased.
175. Multiple Choice: The market price of airline flights i…
Points: 0
Question
The market price of airline flights increased recently. Some economists suggest
that the price increased because jet fuel is much more expensive than before. They
believe that in the market for flights:
Answer
supply increased.
supply decreased.
demand increased.
demand decreased.
176. Multiple Choice: In the market for grass-fed beef, wha…
Points: 0
Question
In the market for grass-fed beef, what would cause a price increase?
Answer
The price of chicken decreases.
Doctors tell patients that beef is full of saturated fat that causes heart attacks.
The prices of grass and corn increase.
There is a movement in the United States towards vegetarianism.
177. Multiple Choice: The market for corn is in equilibrium…
Points: 0
Question
The market for corn is in equilibrium. Which of the following is most likely to
increase the equilibrium price of corn?
Answer
a bountiful harvest
increasing production of corn-based ethanol
decreasing household incomes and corn is a normal good
a subsidy given by the government to growers of corn
178. Multiple Choice: The market for lemonade is in equilib…
Points: 0
Question
The market for lemonade is in equilibrium and the price of lemons rises. How will
this affect the lemonade market?
Answer
Demand will decrease, decreasing the price and decreasing the quantity.
Demand will decrease, increasing the price and decreasing the quantity.
Supply will increase, decreasing the price and increasing the quantity.
Supply will decrease, increasing the price and decreasing the quantity.
179. Multiple Choice: Suppose the input costs associated wi…
Points: 0
Question
Suppose the input costs associated with manufacturing hair replacement
treatments decreases over time. This would lead to:
Answer
an increase in the supply of such treatments, lower prices, and an increase in
the equilibrium quantity.
a decrease in quantity supplied and lower prices.
an increase in demand and higher prices.
a decrease in the supply of such treatments, higher prices, and a decrease in
the equilibrium quantity.
180. Multiple Choice: The price of microchips used to produ…
Points: 0
Question
The price of microchips used to produce computers falls. As a result, the
equilibrium price of computers ________ and the equilibrium quantity ________.
Answer
rises; increases
rises; decreases
falls; decreases
falls; increases
181. Multiple Choice: You notice that the price of DVD play…
Points: 0
Question
You notice that the price of DVD players falls and the quantity of DVD players sold
increases. Which of the following may cause this change?
Answer
Demand for DVD players shifts to the right.
Demand for DVD players shifts to the left.
Supply of DVD players shifts to the right.
Supply of DVD players shifts to the left.
182. Multiple Choice: If the United States increases tariff…
Points: 0
Question
If the United States increases tariffs on imports of lumber from Canada (which
causes the price of lumber to increase in the United States), the equilibrium price
of new homes in the United States will ________ and the equilibrium quantity of
new homes in the United States will ________.
Answer
increase; increase
increase; decrease
decrease; increase
decrease; decrease
183. Multiple Choice: Consider gas stations where customers…
Points: 0
Question
Consider gas stations where customers pay inside before they pump gasoline. If
they introduce a new technology where customers pay at the pump, thus
decreasing production costs, there will be:
Answer
a shift to the right in the supply curve and lower gas prices.
a shift to the left in the supply curve and higher gas prices.
a shift to the right in the demand curve and higher gas prices.
a shift to the left in the demand curve and lower gas prices.
184. Multiple Choice: Many public utilities burn oil to gen…
Points: 0
Question
Many public utilities burn oil to generate electricity. If the price of oil increases, we
would expect there to be:
Answer
a shift to the right in the supply curve of electricity and a lower price for
electricity.
a shift to the left in the supply curve of electricity and a higher price for
electricity.
a shift to the right in the demand curve for oil and a higher price for electricity.
a shift to the left in the demand curve for oil and a lower price for electricity.
185. Multiple Choice: The market for milk is initially in e…
Points: 0
Question
The market for milk is initially in equilibrium. Milk producers engage in an
advertising program to encourage milk drinking, which succeeds in shifting
consumer tastes toward drinking milk. More milk producers enter the market.
Standard demand and supply analysis tells us that:
Answer
the equilibrium price and quantity of milk will rise.
the equilibrium price and quantity of milk will fall.
the equilibrium quantity of milk will rise, but we can’t determine how the
equilibrium price will be affected.
the equilibrium price of milk will rise, but we can’t determine how the
equilibrium quantity will be affected.
186. Multiple Choice: Consider the market for iPods. What h…
Points: 0
Question
Consider the market for iPods. What happens if a fantastic new alternative MP3
player is developed and at the same time a boat carrying a large shipment of iPods
is attacked by pirates and sunk?
Answer
Price decreases and quantity increases.
Price increases and quantity increases.
The change in price is indeterminate and quantity decreases.
Price increases and the change in quantity is indeterminate.
187. Multiple Choice: Consider the market for corn. What ha…
Points: 0
Question
Consider the market for corn. What happens if there is an increased demand for
corn tortillas and at the same time a new corn seed becomes available that
dramatically increases the per-acre yield?
Answer
Price and quantity decrease.
The change in price is indeterminate; quantity decreases.
The change in price is indeterminate; quantity increases.
Price increases; the change in quantity is indeterminate.
188. Multiple Choice: In the market for local coffee, the p…
Points: 0
Question
In the market for local coffee, the price will ________ and the quantity will
________ if new coffee shops open and consumers’ incomes decrease due to a
recession.
Answer
increase; be indeterminate
decrease; be indeterminate
be indeterminate; increase
be indeterminate; decrease
189. Multiple Choice: Suppose the local real estate market …
Points: 0
Question
Suppose the local real estate market is in equilibrium. A recession causes local
household incomes to decline. At the same time, construction of a large
subdivision of new homes has just been completed. Given these two changes, we
can predict the price of real estate will ________ and the quantity of real estate
bought and sold will ________.
Answer
fall; fall
fall; rise
fall; rise or fall
rise; fall or rise
190. Multiple Choice: Suppose the market for gasoline is in…
Points: 0
Question
Suppose the market for gasoline is in equilibrium. You have heard that the price of
crude oil is falling because of new oil discoveries. You are also aware that the
number of car and truck drivers is steadily rising. Knowing this, you predict that the
price of gasoline will ________ and the quantity of gasoline bought and sold will
________.
Answer
rise; rise
rise; fall
rise or fall; rise
rise or fall; fall
191. Multiple Choice: A recent news story reported that OPE…
Points: 0
Question
A recent news story reported that OPEC is expected to decrease the supply of oil
next summer. Summer is traditionally a time of increased demand for oil because
of the many families driving and flying to vacation sites. What would be the
combined effect of these two events on the summer market for gasoline?
Answer
an increase in the price and the quantity
an increase in the price and an unpredictable change in the quantity
an unpredictable change in both the price and the quantity
an unpredictable change in the price and a decrease in the quantity
192. Multiple Choice: Suppose that more police and security…
Points: 0
Question
Suppose that more police and security workers become aware that wearing
bulletproof vests can protect them from injury and decide to start wearing
bulletproof vests. At the same time, the price of ceramics used to produce the
vests falls. The equilibrium relative price of bulletproof vests ________ and the
equilibrium quantity produced ________.
Answer
increases; increases
decreases; decreases
probably changes, but in an ambiguous direction; probably changes, but in an
ambiguous direction
probably changes, but in an ambiguous direction; increases
193. Multiple Choice: An increase in the price and an ambig…
Points: 0
Question
An increase in the price and an ambiguous change in quantity is most likely
caused by:
Answer
a shift to the left in demand and no shift in supply.
a shift to the left in supply and no shift in demand.
a shift to the right in supply and a shift to the left in demand.
a shift to the left in supply and a shift to the right in demand.
194. Multiple Choice: Suppose that supply increases and dem…
Points: 0
Question
Suppose that supply increases and demand decreases. What is the most likely
effect on price and quantity?
Answer
The price will increase, but quantity may increase, decrease, or stay the
same.
The price will decrease, but quantity may increase, decrease, or stay the
same.
The price will decrease and quantity will decrease.
The price will increase and quantity will increase.
195. Multiple Choice: An ambiguous change in price and a de…
Points: 0
Question
An ambiguous change in price and a decrease in quantity are most likely caused
by:
Answer
no shift in supply and a shift to the left in demand.
a shift to the left in supply and a shift to the left in demand.
a shift to the right in supply and a shift to the left in demand.
a shift to the left in supply and a shift to the right in demand.
196. Multiple Choice: The cost of sensors used in making di…
Points: 0
Question
The cost of sensors used in making digital cameras falls, while a successful ad
campaign makes digital cameras more fashionable. As a result, the equilibrium
relative price of digital cameras ________ and the equilibrium quantity ________.
Answer
increases; increases
increases; may increase, decrease, or stay the same
may increase, decrease, or stay the same; increases
decreases; increases
197. Multiple Choice: A decrease in demand and a decrease i…
Points: 0
Question
A decrease in demand and a decrease in supply will lead to ________ in
equilibrium quantity and ________ in equilibrium price.
Answer
a decrease; an indeterminate change
an indeterminate change; an increase
an indeterminate change; a decrease
an increase; an indeterminate change
198. Multiple Choice: An increase in demand and a decrease …
Points: 0
Question
An increase in demand and a decrease in supply will lead to ________ in
equilibrium quantity and ________ in equilibrium price.
Answer
a decrease; a decrease
an indeterminate change; an increase
an indeterminate change; a decrease
an increase; an indeterminate change
199. Multiple Choice: It is certain that the equilibrium pr…
Points: 0
Question
It is certain that the equilibrium price will fall when:
Answer
the supply curve and the demand curve both shift to the right.
the supply curve shifts to the right and the demand curve shifts to the left.
supply and demand both increase.
supply decreases and demand stays the same.
200. Multiple Choice: It is certain that the equilibrium pr…
Points: 0
Question
It is certain that the equilibrium price will rise when:
Answer
the supply curve and the demand curve both shift to the right.
the supply curve shifts to the right and the demand curve shifts to the left.
supply and demand both shift to the left.
the supply curve shifts to the left and the demand curve shifts to the right.
201. Multiple Choice: It is certain that the equilibrium qu…
Points: 0
Question
It is certain that the equilibrium quantity will fall when:
Answer
the supply curve and the demand curve both shift to the right.
the supply curve shifts to the right and the demand curve shifts to the left.
supply curve shifts to the left and demand shifts to the right.
supply shifts to the left and demand stays the same.
202. Multiple Choice: It is certain that the equilibrium qu…
Points: 0
Question
It is certain that the equilibrium quantity will rise when:
Answer
the supply curve and the demand curve both shift to the right.
the supply curve shifts to the right and the demand curve shifts to the left.
supply and demand both shift to the left.
supply shifts to the left and demand stays the same.
203. Multiple Choice: Equilibrium quantity will always incr…
Points: 0
Question
Equilibrium quantity will always increase if:
Answer
supply and demand both increase.
supply increases and demand decreases.
supply and demand both decrease.
supply decreases and demand remains unchanged.
204. Multiple Choice: The ________ tomatoes will decrease i…
Points: 0
Question
The ________ tomatoes will decrease if fertilizer prices rise.
Answer
demand for
quantity demanded of
supply of
equilibrium price of
205. Multiple Choice: Which of the following will result in…
Points: 0
Question Which of the following will result in an increased price of milk?
Answer
a shift to the right of the supply curve for milk
a shift to the right of the demand curve for milk
an increase in the number of milk suppliers
a decrease in the number of milk buyers
206. Multiple Choice: Figure: Four Markets for DVDs Referen…
Points: 0
Question
Figure: Four Markets for DVDs
Reference: Ref 3-12
(Figure: Four Markets for DVDs) Look at the figure Four Markets for DVDs. If D1 or
S1 is the original curve and D2 or S2 is the new curve, which of the graphs shows a
change that results in an increase in the quantity demanded of DVDs?
Answer
A
B
C
D
207. Multiple Choice: Figure: Four Markets for DVDs Referen…
Points: 0
Question
Figure: Four Markets for DVDs
Reference: Ref 3-12
(Figure: Four Markets for DVDs) Look at the figure Four Markets for DVDs. If D1 or
S1 is the original curve and D2 or S2 is the new curve, which of the graphs
illustrates what may happen in the market for DVDs if there is an increase in the
cost of a movie ticket at the local theater?
Answer
A
B
C
D
208. Multiple Choice: Figure: Four Markets for DVDs Referen…
Points: 0
Question
Figure: Four Markets for DVDs
Reference: Ref 3-12
(Figure: Four Markets for DVDs) Look at the figure Four Markets for DVDs. If D1 or
S1 is the original curve and D2 or S2 is the new curve, which of the graphs shows a
change that results in a decrease in the quantity of DVDs supplied?
Answer
A
B
C
D
209. Multiple Choice: Figure: Four Markets for DVDs Referen…
Points: 0
Question
Figure: Four Markets for DVDs
Reference: Ref 3-12
(Figure: Four Markets for DVDs) Look at the figure Four Markets for DVDs. If D1 or
S1 is the original curve and D2 or S2 is the new curve,, which of the graphs
illustrates what may happen in the market for DVDs if the cost of producing DVDs
falls?
Answer
A
B
C
D
210. Multiple Choice: Figure: Four Markets for DVDs Referen…
Points: 0
Question
Figure: Four Markets for DVDs
Reference: Ref 3-12
(Figure: Four Markets for DVDs) Look at the figure Four Markets for DVDs. If D1 or
S1 is the original curve and D2 or S2 is the new curve, which of the graphs shows
what may happen in the market for DVDs if the cost of producing DVD players
increases?
Answer
A
B
C
D
211. Multiple Choice: Figure: Four Markets for DVDs Referen…
Points: 0
Question
Figure: Four Markets for DVDs
Reference: Ref 3-12
(Figure: Four Markets for DVDs) Look at the figure Four Markets for DVDs. If D1 or
S1 is the original curve and D2 or S2 is the new curve, which of the graphs shows
what may happen if some of the stores that rent DVDs close?
Answer
A
B
C
D
212. Multiple Choice: Figure: Shifts in Demand and Supply R…
Points: 0
Question
Figure: Shifts in Demand and Supply
Reference: Ref 3-13
(Figure: Shifts in Demand and Supply) Look at the figure Shifts in Demand and
Supply. The figure shows how supply and demand might shift in response to
specific events. Suppose consumer incomes increase. Which panel best describes
how this will affect the market for used furniture, an inferior good?
Answer
panel A
panel B
panel C
panel D
213. Multiple Choice: Figure: Shifts in Demand and Supply R…
Points: 0
Question
Figure: Shifts in Demand and Supply
Reference: Ref 3-13
(Figure: Shifts in Demand and Supply) Look at the figure Shifts in Demand and
Supply. The figure shows how supply and demand might shift in response to
specific events. Suppose scientists discover that eating a tomato a day prevents
aging. Which panel best describes how this will affect the market for tomatoes?
Answer
panel A
panel B
panel C
panel D
214. Multiple Choice: Figure: Shifts in Demand and Supply R…
Points: 0
Question
Figure: Shifts in Demand and Supply
Reference: Ref 3-13
(Figure: Shifts in Demand and Supply) Look at the figure Shifts in Demand and
Supply. The figure shows how supply and demand might shift in response to
specific events. Suppose a fall frost destroys one-third of the nation’s orange crop.
Which panel best describes how this will affect the market for oranges?
Answer
panel A
panel B
panel C
panel D
215. Multiple Choice: Figure: Shifts in Demand and Supply R…
Points: 0
Question
Figure: Shifts in Demand and Supply
Reference: Ref 3-13
(Figure: Shifts in Demand and Supply) Look at the figure Shifts in Demand and
Supply. The figure shows how supply and demand might shift in response to
specific events. Suppose a fall frost destroys one-third of the nation’s orange crop.
Which panel best describes how this will affect the market for vitamin C tablets,
which are a substitute for oranges?
Answer
panel A
panel B
panel C
panel D
216. Multiple Choice: Figure: Shifts in Demand and Supply R…
Points: 0
Question
Figure: Shifts in Demand and Supply
Reference: Ref 3-13
(Figure: Shifts in Demand and Supply) Look at the figure Shifts in Demand and
Supply. The figure shows how supply and demand might shift in response to
specific events. Suppose the population increases. Which panel best describes
how this will affect the market for apples?
Answer
panel A
panel B
panel C
panel D
217. Multiple Choice: Figure: Shifts in Demand and Supply R…
Points: 0
Question
Figure: Shifts in Demand and Supply
Reference: Ref 3-13
(Figure: Shifts in Demand and Supply) Look at the figure Shifts in Demand and
Supply. The graph shows how supply and demand might shift in response to
specific events. Suppose a new machine is developed that allows restaurants and
fast-food outlets to produce french fries at a lower cost. Which panel best
describes how this will affect the market for french fries?
Answer
panel A
panel B
panel C
panel D
218. Multiple Choice: Figure: Shifts in Demand and Supply I…
Points: 0
Question
Figure: Shifts in Demand and Supply II
Reference: Ref 3-14
(Figure: Shifts in Demand and Supply II) Look at the figure Shifts in Demand and
Supply II. The graph shows how supply and demand might shift in response to
specific events. Suppose consumer incomes decrease. Which panel best
describes how this will affect the market for used clothing, an inferior good?
Answer
panel A
panel B
panel C
panel D
219. Multiple Choice: Figure: Shifts in Demand and Supply I…
Points: 0
Question
Figure: Shifts in Demand and Supply II
Reference: Ref 3-14
(Figure: Shifts in Demand and Supply II) Look at the figure Shifts in Demand and
Supply II. The graph shows how supply and demand might shift in response to
specific events. Suppose scientists discover that eating pomegranates causes
aging. Which panel best describes how this will affect the market for
pomegranates?
Answer
panel A
panel B
panel C
panel D
220. Multiple Choice: Figure: Shifts in Demand and Supply I…
Points: 0
Question
Figure: Shifts in Demand and Supply II
Reference: Ref 3-14
(Figure: Shifts in Demand and Supply II) Look at the figure Shifts in Demand and
Supply II. The graph shows how supply and demand might shift in response to
specific events. Suppose a drought destroys one-third of the nation’s peanut crop.
Which panel best describes how this will affect the market for peanuts?
Answer
panel A
panel B
panel C
panel D
221. Multiple Choice: Figure: Shifts in Demand and Supply I…
Points: 0
Question
Figure: Shifts in Demand and Supply II
Reference: Ref 3-14
(Figure: Shifts in Demand and Supply II) Look at the figure Shifts in Demand and
Supply II. The graph shows how supply and demand might shift in response to
specific events. Suppose a fall frost destroys one-third of the nation’s grapefruit
crop. Which panel best describes how this will affect the market for vitamin B12
tablets, which are a substitute for grapefruit?
Answer
panel A
panel B
panel C
panel D
222. Multiple Choice: Figure: Shifts in Demand and Supply I…
Points: 0
Question
Figure: Shifts in Demand and Supply II
Reference: Ref 3-14
(Figure: Shifts in Demand and Supply II) Look at the figure Shifts in Demand and
Supply II. The figure shows how supply and demand might shift in response to
specific events. Suppose the birth rate (the number of babies per woman of
childbearing age) decreases. Which panel best describes how this will affect the
market for diapers?
Answer
panel A
panel B
panel C
panel D
223. Multiple Choice: Figure: Shifts in Demand and Supply I…
Points: 0
Question
Figure: Shifts in Demand and Supply II
Reference: Ref 3-14
(Figure: Shifts in Demand and Supply II) Look at the figure Shifts in Demand and
Supply II. The figure shows how supply and demand might shift in response to
specific events. Suppose that vast new oilfields are discovered offshore of
California, and thus gasoline prices fall. Which panel best describes how this will
affect the market for sport utility vehicles, a complement to gasoline?
Answer
panel A
panel B
panel C
panel D
224. Multiple Choice: Figure: Shifts in Demand and Supply I…
Points: 0
Question
Figure: Shifts in Demand and Supply II
Reference: Ref 3-14
(Figure: Shifts in Demand and Supply II) Look at the figure Shifts in Demand and
Supply II. The figure shows how supply and demand might shift in response to
specific events. Suppose the technology for producing ethanol fuel improves.
Which panel best describes how this will affect the market for ethanol?
Answer
panel A
panel B
panel C
panel D
225. Multiple Choice: Figure: Shifts in Demand and Supply I…
Points: 0
Question
Figure: Shifts in Demand and Supply III
Reference: Ref 3-15
(Figure: Shifts in Demand and Supply III) Look at the figure Shifts in Demand and
Supply III. The figure shows how supply and demand might shift in response to
specific events. Suppose consumer incomes increase. Which panel best describes
how this will affect the market for designer boots, a normal good?
Answer
panel A
panel B
panel C
panel D
226. Multiple Choice: Figure: Shifts in Demand and Supply I…
Points: 0
Question
Figure: Shifts in Demand and Supply III
Reference: Ref 3-15
(Figure: Shifts in Demand and Supply III) Look at the figure Shifts in Demand and
Supply III. The figure shows how supply and demand might shift in response to
specific events. Suppose scientists discover that eating asparagus slows down the
aging process. Which panel best describes how this will affect the market for
asparagus?
Answer
panel A
panel B
panel C
panel D
227. Multiple Choice: Figure: Shifts in Demand and Supply I…
Points: 0
Question
Figure: Shifts in Demand and Supply III
Reference: Ref 3-15
(Figure: Shifts in Demand and Supply III) Look at the figure Shifts in Demand and
Supply III. The figure shows how supply and demand might shift in response to
specific events. Suppose a wet and sunny year increases the nation’s corn crop by
20%. Which panel best describes how this will affect the market for corn?
Answer
panel A
panel B
panel C
panel D
228. Multiple Choice: Figure: Shifts in Demand and Supply I…
Points: 0
Question
Figure: Shifts in Demand and Supply III
Reference: Ref 3-15
(Figure: Shifts in Demand and Supply III) Look at the figure Shifts in Demand and
Supply III. The figure shows how supply and demand might shift in response to
specific events. Suppose a spring frost destroys one-third of the nation’s artichoke
crop. Which panel best describes how this will affect the market for mayonnaise,
which is a complement to artichokes?
Answer
panel A
panel B
panel C
panel D
229. Multiple Choice: Figure: Shifts in Demand and Supply I…
Points: 0
Question
Figure: Shifts in Demand and Supply III
Reference: Ref 3-15
(Figure: Shifts in Demand and Supply III) Look at the figure Shifts in Demand and
Supply III. The figure shows how supply and demand might shift in response to
specific events. Suppose the technology for producing snowboards improves.
Which panel best describes how this will affect the market for winter parkas, a
complement of snowboards?
Answer
panel A
panel B
panel C
panel D
230. Multiple Choice: Figure: Shifts in Demand and Supply I…
Points: 0
Question
Figure: Shifts in Demand and Supply IV
Reference: Ref 3-16
(Figure: Shifts in Demand and Supply IV) Look at the figure Shifts in Demand and
Supply IV. The figure shows how supply and demand might shift in response to
specific events. Suppose consumer incomes increase. Which panel best describes
how this will affect the market for big-screen televisions, a normal good?
Answer
panel A
panel B
panel C
panel D
231. Multiple Choice: Figure: Shifts in Demand and Supply I…
Points: 0
Question
Figure: Shifts in Demand and Supply IV
Reference: Ref 3-16
(Figure: Shifts in Demand and Supply IV) Look at the figure Shifts in Demand and
Supply IV. The figure shows how supply and demand might shift in response to
specific events. Suppose the Surgeon General announces that eating chocolate
prevents heart disease. Which panel best describes how this will affect the market
for chocolate?
Answer
panel A
panel B
panel C
panel D
232. Multiple Choice: Figure: Shifts in Demand and Supply I…
Points: 0
Question
Figure: Shifts in Demand and Supply IV
Reference: Ref 3-16
(Figure: Shifts in Demand and Supply IV) Look at the figure Shifts in Demand and
Supply IV. The figure shows how supply and demand might shift in response to
specific events. Suppose the price of lumber falls dramatically. Which panel best
describes how this will affect the market for houses?
Answer
panel A
panel B
panel C
panel D
233. Multiple Choice: Figure: Shifts in Demand and Supply I…
Points: 0
Question
Figure: Shifts in Demand and Supply IV
Reference: Ref 3-16
(Figure: Shifts in Demand and Supply IV) Look at the figure Shifts in Demand and
Supply IV. The figure shows how supply and demand might shift in response to
specific events. Suppose oil becomes more expensive. Which panel best
describes how this will affect the market for gasoline, which is made from oil?
Answer
panel A
panel B
panel C
panel D
234. Multiple Choice: Figure: Shifts in Demand and Supply I…
Points: 0
Question
Figure: Shifts in Demand and Supply IV
Reference: Ref 3-16
(Figure: Shifts in Demand and Supply IV) Look at the figure Shifts in Demand and
Supply IV. The figure shows how supply and demand might shift in response to
specific events. Suppose half of the people in San Diego move to Colorado Springs.
Which panel best describes how this will affect the market for houses in Colorado
Springs?
Answer
panel A
panel B
panel C
panel D
235. Multiple Choice: Figure: Shifts in Demand and Supply I…
Points: 0
Question
Figure: Shifts in Demand and Supply IV
Reference: Ref 3-16
(Figure: Shifts in Demand and Supply IV) Look at the figure Shifts in Demand and
Supply IV. The figure shows how supply and demand might shift in response to
specific events. Suppose half of the people in San Diego pack up and move to
Colorado Springs. Which panel best describes how this will affect the supply of
houses in San Diego?
Answer
panel A
panel B
panel C
panel D
236. Multiple Choice: Figure: Supply and Demand in the Oran…
Points: 0
Question
Figure: Supply and Demand in the Orange Juice Market
Reference: Ref 3-17
(Figure: Supply and Demand in the Orange Juice Market) Look at the figure Supply
and Demand in the Orange Juice Market. Suppose a hurricane hits Florida, where
oranges are grown. What will be the most likely new equilibrium point in the orange
juice market?
Answer
A
B
D
E
237. Multiple Choice: Figure: Supply and Demand in the Oran…
Points: 0
Question
Figure: Supply and Demand in the Orange Juice Market
Reference: Ref 3-17
(Figure: Supply and Demand in the Orange Juice Market) Look at the figure Supply
and Demand in the Orange Juice Market. Suppose most people drink orange juice
only with champagne. What will be the new equilibrium point in the orange juice
market if a law banning alcohol passes?
Answer
A
B
D
E
238. Multiple Choice: Figure: Supply and Demand in the Oran…
Points: 0
Question
Figure: Supply and Demand in the Orange Juice Market
Reference: Ref 3-17
(Figure: Supply and Demand in the Orange Juice Market) Look at the figure Supply
and Demand in the Orange Juice Market. A reputable scientist asserts in a major
scientific publication that drinking orange juice will increase your life span. What
will be the most likely new equilibrium point in the orange juice market?
Answer
A
B
D
E
239. Multiple Choice: When milk prices increased in 2008, o…
Points: 0
Question When milk prices increased in 2008, one milk consumer stated that the reason he
cut down on milk consumption is so that he could drive his car. This action
represents a:
Answer
movement along the demand curve for milk.
movement along the supply curve for milk.
shift of the demand curve for milk.
shift of the supply curve for milk.
240. Multiple Choice: A decrease in the price of eggs will …
Points: 0
Question
A decrease in the price of eggs will result in:
Answer
an increase in the demand for eggs.
an increase in the supply of eggs.
a shift in the supply curve for eggs.
a movement along the demand curve for eggs.
241. Multiple Choice: A decrease in the price of a good wil…
Points: 0
Question
A decrease in the price of a good will result in:
Answer
an increase in demand.
an increase in supply.
an increase in the quantity demanded.
an increase in the quantity supplied.
242. Multiple Choice: If the price of corn is rises, we wou…
Points: 0
Question
If the price of corn is rises, we would expect:
Answer
the quantity of corn demanded to rise.
the quantity of corn supplied to rise.
the demand for corn to shift inward.
the supply of corn to shift outward.
243. Multiple Choice: Assume that corn is an input in the p…
Points: 0
Question
Assume that corn is an input in the production of beef but not in the production of
pork. Further, beef and pork are substitutes. A decrease in the price of corn will:
Answer
increase the supply of beef and increase the demand for pork.
decrease the supply of beef and increase the demand for pork.
decrease the supply of beef and decrease the demand for pork.
increase the supply of beef and decrease the demand for pork.
244. Multiple Choice: The market for soybeans is initially …
Points: 0
Question
The market for soybeans is initially in equilibrium. Because of mad cow disease,
producers decide to replace bone meal with soybeans in cattle feed. The likely
effect is that:
Answer
the equilibrium price and quantity of soybeans will rise.
the equilibrium price and quantity of soybeans will fall.
the equilibrium quantity of soybeans will rise, but we can’t determine what will
happen to the equilibrium price.
the equilibrium price of soybeans will rise, but we can’t determine what will
happen to the equilibrium quantity.
245. Multiple Choice: An increase in which of the following…
Points: 0
Question
An increase in which of the following determinants of demand will have an
ambiguous (uncertain) effect on price?
Answer
tastes and preferences
price of a substitute
price of a complement
income
246. Multiple Choice: Which of the following would result i…
Points: 0
Question Which of the following would result in a movement along the demand curve?
Answer
a change in preferences
an increase in the number of buyers
an increase in the number of suppliers
a decrease in income
247. Multiple Choice: Markets that are characterized by man…
Points: 0
Question
Markets that are characterized by many buyers and many sellers are referred to
as:
Answer
inefficient.
competitive.
foreign.
monopolies.
248. Multiple Choice: Alice goes to the local supermarket t…
Points: 0
Question
Alice goes to the local supermarket to purchase one package of her favorite taco
shells. She often pays $1.50 for a package, but she finds they are on sale for $1
each. According to the law of demand, one can expect Alice to:
Answer
purchase an alternative good.
purchase more than one package of taco shells.
decide not to purchase taco shells on this visit.
buy only one package of taco shells.
249. Multiple Choice: When the price of a good increases an…
Points: 0
Question When the price of a good increases and the quantity demanded decreases, this is
often referred to as:
Answer
efficiency.
the law of demand.
the supply schedule.
the production possibilities frontier.
250. Multiple Choice: Recent research suggests that certain…
Points: 0
Question
Recent research suggests that certain plastic containers may have cancer-causing
elements in them. As a result of this research, one would expect that:
Answer
the demand for such containers would decrease.
the quantity demanded for such containers might increase.
no impact would be observed in this market.
the price of the containers would change due to a movement along the demand
curve.
251. Multiple Choice: Good X and good Y are related goods. …
Points: 0
Question
Good X and good Y are related goods. If the price of good X increases and the
demand for good Y shifts left, these goods are:
Answer
complements.
substitutes.
inferior.
normal.
252. Multiple Choice: Suppose oranges and clementines are c…
Points: 0
Question
Suppose oranges and clementines are considered to be substitutes. Holding
everything else constant, if the price of oranges increases, then the:
Answer
demand for clementines will increase.
demand for clementines will decrease.
demand for oranges will increase.
demand for oranges will decrease.
253. Multiple Choice: Good X and good Y are related goods. …
Points: 0
Question
Good X and good Y are related goods. Holding everything else constant, if the price
of X decreases and the demand for Y increases, then this most likely means that X
and Y are:
Answer
complements.
substitutes.
inferior.
normal.
254. Multiple Choice: Good X and good Y are substitutes. Ho…
Points: 0
Question
Good X and good Y are substitutes. Holding all other things constant, this means
that when the price of good X increases, the:
Answer
demand for good X will increase.
demand for good Y will increase.
demands for both good X and good Y will both increase.
demand for good Y will decrease.
255. Multiple Choice: Holding all other things constant, if…
Points: 0
Question
Holding all other things constant, if ramen noodles are an inferior good to Vanessa,
then as her income increases, her demand curve for ramen noodles:
Answer
will shift left.
will shift right.
will not shift at all.
may shift left or right, but we’re not sure by how much.
256. Multiple Choice: If Benjamin considers sushi to be a n…
Points: 0
Question
If Benjamin considers sushi to be a normal good and if his income increases by
20%, his purchases of sushi will:
Answer
decrease by 20%.
increase.
decrease.
not change.
257. Multiple Choice: The demand for a good will increase if:
Points: 0
Question
The demand for a good will increase if:
Answer
there is a decrease in the price of the good.
the price of inputs needed in the production of the good decrease.
there is an increase in the number of consumers in this market.
the price of a complementary good increases.
258. Multiple Choice: A market is composed of three individ…
Points: 0
Question A market is composed of three individuals, Nicholas, Benjamin, and Alexander. Their
individual demand schedules are given below and are as follows:
Based on this information, which of the following market demand schedules
accurately portrays this market?
Answer
259. Multiple Choice: The horizontal summation of individua…
Points: 0
Question
The horizontal summation of individual demand curves for a particular product,
holding the quantity demanded constant, is referred to as:
Answer
market demand.
market supply.
complements in production.
substitutes in production.
260. Multiple Choice: Milk is an important ingredient in th…
Points: 0
Question
Milk is an important ingredient in the production of ice cream. If the price of milk
increases, then one would expect, holding all other things constant:
Answer
the supply curve for ice cream to shift left.
the supply curve for ice cream to shift right.
no change in the supply curve for ice cream.
a movement along the supply curve for ice cream curve, resulting in more ice
cream supplied.
261. Multiple Choice: High-fructose corn syrup, which is de…
Points: 0
Question
High-fructose corn syrup, which is derived from corn, is an important ingredient in
the production of many soft drinks. If the price of corn increases, one would expect:
Answer
the supply curve for soft drinks to shift left.
the quantity supplied of soft drinks to increase.
the demand for soft drinks to increase.
the supply curve for soft drinks to shift right.
262. Multiple Choice: All of the following would result in …
Points: 0
Question
All of the following would result in an increase in the supply of a good except:
Answer
a decrease in resource prices.
a beneficial technological change.
an increase in the number of suppliers.
an increase in input prices.
263. Multiple Choice: A farmer finds that when he produces …
Points: 0
Question
A farmer finds that when he produces more corn, he also has more corn stalks that
he can sell as decorations. To the farmer, corn and corn stalks are:
Answer
complements in production.
substitutes in production.
unrelated goods.
inferior goods.
264. Multiple Choice: Substitutes in production suggest tha…
Points: 0
Question
Substitutes in production suggest that a producer with a fixed set of resources
initially will need to reduce production of one good when the producer:
Answer
produces less of the other good.
produces more of the other good.
experiences an increase in resources.
produces more of the other good and when the producer experiences an
increase in resources.
265. Multiple Choice: Researchers find a new strain of gene…
Points: 0
Question
Researchers find a new strain of genetically modified seeds that results in a higher
yield for corn producers. Holding all other things constant, this research will:
Answer
shift the supply curve for corn left.
increase the quantity supplied of corn.
decrease the quantity supplied of corn.
shift the supply curve for corn to the right.
266. Multiple Choice: If suppliers expect prices for their …
Points: 0
Question
If suppliers expect prices for their product to rise next year, then one would expect:
Answer
that this will shift the demand curve for the product right this year.
a decrease in the quantity demanded this year.
that this will shift the supply curve for the product to the left this year.
a shift in the supply curve for the product to the right this year.
267. Multiple Choice: The market for good Y, a perfectly co…
Points: 0
Question
The market for good Y, a perfectly competitive good, is made up of 15 producers
who each produce the same amount of good Y. If the price of good Y is currently
$100 and the total quantity supplied is 150, how many units of good Y is each
producer supplying?
Answer
10
150
100
15
268. Multiple Choice: When a market is in equilibrium, one …
Points: 0
Question When a market is in equilibrium, one will find that the:
Answer
quantity demanded is equal to zero.
quantity demanded is equal to quantity supplied.
quantity demanded is greater than quantity supplied.
quantity supplied is zero.
269. Multiple Choice: Reference: Ref 3-19 (Table: Competit…
Points: 0
Question
Reference: Ref 3-19
(Table: Competitive Market for Good Z) Look at the table Competitive Market for
Good Z. If the current price of good Z is $15, there will be:
Answer
excess demand of 25 units.
excess supply of 25 units.
a shortage of 20 units.
a surplus of 45 units.
270. Multiple Choice: Reference: Ref 3-19 (Table: Competit…
Points: 0
Question
Reference: Ref 3-19
(Table: Competitive Market for Good Z) Look at the table Competitive Market for
Good Z. A surplus of the good will occur at a price of ________.
Answer
$0
$5
$10
$15
271. Multiple Choice: Reference: Ref 3-19 (Table: Competit…
Points: 0
Question
Reference: Ref 3-19
(Table: Competitive Market for Good Z) Look at the table Competitive Market for
Good Z. The equilibrium price and quantity in this market are, respectively:
Answer
$5 and 40 units.
$20 and 60 units.
$10 and 30 units.
$15 and 20 units.
272. Multiple Choice: Reference: Ref 3-19 (Table: Competit…
Points: 0
Question
Reference: Ref 3-19
(Table: Competitive Market for Good Z) Look at the table Competitive Market for
Good Z. If the demand curve for good Z is linear, it can be expressed as:
Answer
Qd = 3P.
Qd = 50 – 2P.
Qd = Qs.
Qd = 100 – 2P.
273. Multiple Choice: Reference: Ref 3-19 (Table: Competit…
Points: 0
Question
Reference: Ref 3-19
(Table: Competitive Market for Good Z) Look at the table Competitive Market for
Good Z. If the supply curve for good Z is linear, it can be expressed as:
Answer
Qs = 3P.
Qs = 50 – 2P.
Qs = 100 – 2P.
Qs = Qd
274. Multiple Choice: Figure: The Market for Candy Referenc…
Points: 0
Question
Figure: The Market for Candy
Reference: Ref 3-20
(Figure: The Market for Candy) Look at the figure The Market for Candy. Equilibrium
occurs at a price of ________, and the equilibrium quantity is equal to ________.
Answer
P1; Q5
P2; Q3
P3; Q2
P1; Q3
275. Multiple Choice: Figure: The Market for Candy Referenc…
Points: 0
Question
Figure: The Market for Candy
Reference: Ref 3-20
(Figure: The Market for Candy) Look at the figure The Market for Candy. A surplus
of the good will exist at a price of:
Answer
P1.
P2.
P3.
There are no surpluses in this market.
276. Multiple Choice: Suppose the demand curve for good Z i…
Points: 0
Question
Suppose the demand curve for good Z is downward sloping. If the price of good Z
decreases because of a shift in the supply of good Z, this will cause:
Answer
an increase in the demand for good Z.
a movement along the demand curve of good Z.
no effect on the quantity demanded of good Z.
fewer people to purchase good Z.
277. Multiple Choice: Suppose people expect the price of MP…
Points: 0
Question
Suppose people expect the price of MP3 players to rise next year. As a result of
this expectation, people will most likely:
Answer
purchase fewer MP3 players this year.
observe higher prices for MP3 players this year.
purchase the same amount of MP3 players, since this expectation will have no
effect on consumers this year.
decide to wait and purchase the MP3 players next year.
278. Multiple Choice: An increase in the price of sugar (an…
Points: 0
Question
An increase in the price of sugar (an ingredient for soft drinks) and an increased
concern about tooth decay caused by the consumption of soft drinks will result in
which of the following in the soft drink market?
Answer
There will be an increase in both the equilibrium price and quantity.
Equilibrium quantity will decrease, but equilibrium price may decrease,
increase, or stay the same.
There will be a decrease in both equilibrium price and quantity.
Equilibrium quantity will increase, but equilibrium price may decrease,
increase, or stay the same.
279. Multiple Choice: An increase in the price of wheat, an…
Points: 0
Question
An increase in the price of wheat, an important ingredient in the production of
bread, combined with an increase in the number of people consuming bread, will
result in which of the following changes in the bread market?
Answer
Both the equilibrium price and quantity will increase.
Equilibrium quantity will decrease, but equilibrium price may decrease,
increase, or stay the same.
Both the equilibrium price and quantity will decrease.
Equilibrium price will increase, but equilibrium quantity may decrease,
increase, or stay the same.
280. Multiple Choice: Gasoline, a derivative of oil, is a l…
Points: 0
Question
Gasoline, a derivative of oil, is a large part of transportation costs for many
producers. If the price of oil increases at the same time that incomes fall for many
consumers, one would expect the equilibrium price of many normal goods to
________, while their equilibrium quantities would ________.
Answer
fall; rise
fall, rise, or stay the same; decrease
decrease; fall, rise, or stay the same
fall; fall
281. Multiple Choice: Rice and potatoes are substitutes. If…
Points: 0
Question
Rice and potatoes are substitutes. If the price of rice rises and there is a bumper
crop of potatoes, in the market for potatoes one would expect the:
Answer
equilibrium price to rise, fall, or stay the same and equilibrium quantity to rise.
equilibrium price to rise and the equilibrium quantity to fall.
equilibrium price and quantity both to fall.
equilibrium price to rise and the equilibrium quantity to fall, rise, or stay the
same.
282. Multiple Choice: A beneficial technological change enh…
Points: 0
Question
A beneficial technological change enhances the production of cranberries. At the
same time, scientists discover the health benefits of cranberries. This will result in:
Answer
an increase in both the equilibrium price and quantity in the cranberry market.
an increase in the equilibrium quantity and an uncertain impact on the
equilibrium price of cranberries.
a decrease in both the equilibrium price and quantity in the cranberry market.
a decrease in the equilibrium price and an uncertain impact on the equilibrium
quantity of cranberries.
283. Multiple Choice: The market demand for singing dolls i…
Points: 0
Question
The market demand for singing dolls is initially made up of 50 buyers. Suppose
there is a decrease in the number of buyers by 10. Holding everything else
constant, one would expect:
Answer
the supply curve to shift left.
the quantity supplied to increase.
the supply curve to shift right.
the quantity supplied to decrease.
284. Essay: Explain the law of demand. What does …
Points: 0
Question
Explain the law of demand. What does it tell us about the shape of a demand
curve?
Answer
The law of demand states that when all other variables are held constant, a higher
price of a good will tend to decrease the quantity demanded of that good.
Graphically we see this as a downward-sloping demand curve.
285. Essay: Why are economists so particular abou…
Points: 0
Question Why are economists so particular about the difference between an increase in
“quantity demanded” and an increase in “demand”? Aren’t they the same thing?
Answer
No, they are not the same thing. An increase in the quantity demanded implies a
downward movement along a given demand curve. The price has fallen and the
quantity demanded has increased. An increase in demand implies that the entire
demand curve has shifted rightward. This means that at all prices the quantity
demanded has increased.
286. Essay: A small private college increases tui…
Points: 0
Question
A small private college increases tuition while a large public university in the same
state does not. What will happen to the demand (enrollment) for both schools?
Answer
The small college is likely to see a decrease in the quantity demanded for college
education at the school. This would be seen as a movement upward along the
demand curve. If students see the two schools as substitutes, the demand curve
would shift rightward for the large public university.
287. Essay: How would each of the following event…
Points: 0
Question
How would each of the following events affect the demand for new s?
a) The price of a used rises.
b) The price of college tuition rises.
c) More high school graduates decide to attend college.
Answer
a) A used is a substitute for a new . When the used book
becomes more expensive, the demand for a new book increases.
b) A college course is a complement with a new . If the price of attending
college is rising, the demand for a new decreases.
c) More students in college is an increase in the number of consumers for new
s. This increases the demand for books (both new and used).
288. Essay: Suppose the supply curve for soap bub…
Points: 0
Question
Suppose the supply curve for soap bubbles has a slope of +1 and intersects the
vertical axis at a price of $2 per bottle. Interpret the meaning of both the y-intercept
and the slope.
Answer
The y-intercept at $2 tells us that there will be zero bottles supplied at prices of $2
and below. In other words, the price must rise above $2 for any bottles to be
supplied. The slope of +1 tells us that if the price rises $1, one more bottle of soap
bubbles will be supplied.
289. Essay: How would each of the following event…
Points: 0
Question
How would each of the following events affect the supply of compact cars?
a) The price of steel rises.
b) The production technology for car manufacturing improves.
c) The price of sport utility vehicles falls.
Answer
a) Steel is an important input in car production. Higher steel prices would shift the
supply curve to the left.
b) Better production technology would shift the supply curve to the right.
c) Producers would see less profit in producing sport utility vehiclesRemember, the supply
of compact cars would shift to the right.
290. Essay: Why do many clothing stores have big …
Points: 0
Question Why do many clothing stores have big after-Christmas sales on their merchandise?
Answer
After the holidays, demand for clothing (and all items that make for good gifts) falls.
At the pre-Christmas price, there is now a surplus of clothing. Whenever there is a
surplus in any market, you see suppliers (or retailers in this case) with unsold
inventory. In order to clear the surplus, the price is lowered. More shoppers are
enticed by the lower price and the surplus is eliminated.
291. Essay: You read that college tuition is risi…
Points: 0
Question
You read that college tuition is rising every year, and yet more students attend
college every year. Isn’t this a violation of the law of demand?
Answer
Probably not. Rising tuition and rising college attendance can likely be explained
by a series of rightward shifts in the demand curve for college education. If the
supply curve is steady, shifting demand along the unchanged supply curve would
explain this trend.
292. Essay: In the Midwestern United States, the …
Points: 0
Question
In the Midwestern United States, the price of an ear of corn is always lowest in the
summer. This seems odd, because consumers really enjoy eating ears of corn in
the summer. Can you explain this?
Answer
Even with greater demand for corn in the summer, the supply is quite large. If the
price is low in the summer, it must be the case that the supply shift to the right is
larger than the demand shift to the right.
293. Essay: In August 2005, Hurricane Katrina dam…
Points: 0
Question
In August 2005, Hurricane Katrina damaged or destroyed oil platforms in the Gulf of
Mexico, refineries along the Gulf coast, and the pipeline infrastructure that
transports oil and gas to customers across the eastern United States. The winter
of 2005 was also unusually cold in many parts of the country. How did these
events affect the market for natural gas and heating oil?
Answer
The supply of natural gas was severely decreased by Katrina. When the cold winter
came, demand for natural gas to heat homes sharply increased. The combination
of supply falling and demand rising created a big increase in the equilibrium price of
natural gas. The change in equilibrium quantity is uncertain because we don’t know
the relative size of each shift.
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