Question 1

Consumers expect that the price of a gallon of gasoline will rise next week. As a result

Accepted Answer

A)   today's supply of gasoline increases.
B)   today's demand for gasoline increases.
C)   the price of a gallon of gasoline falls today.
D)   next week's supply of gasoline decreases.

Question 2

Good A and good B are substitutes in production. The demand for good A increases so that the price of good A rises. The increase in the price of good A shifts the

Accepted Answer

A)   demand curve for good B leftward.
B)   demand curve for good B rightward.
C)   supply curve of good B leftward.
D)   supply curve of good B rightward.

Question 3

-The above figures show the market for oranges. Which figure(s)  shows the effect of new successful advertising campaigns to eat more oranges?

Accepted Answer

A)   Figure A
B)   Figure B
C)   Figure D
D)   Figures A and D

Question 4

-Consider the demand curves for soft drinks shown in the figure above. Moving from point a to point c means that

Accepted Answer

A)   the marginal benefit of each additional soft drink falls.
B)   the opportunity cost of another soft drink increases.
C)   people's incomes have decreased.
D)   the price of a soft drink has increased.

Question 5

The interaction of supply and demand explains

Accepted Answer

A)   the prices of goods and services but not their quantities.
B)   the quantities of goods and services but not their prices.
C)   both the prices and the quantities of goods and services.
D)   neither the prices nor the quantities of goods and services.

Question 6

When both the demand for a good increases and the supply of the good increases, the equilibrium quantity definitely increases.

Accepted Answer

A) True 
 B)False

Question 7

Kelly graduates and her income increases by $25,000 a year. Other things remaining the same, she increases the quantity of clothes she buys. For Kelly, clothes are

Accepted Answer

A)   an inferior good.
B)   a normal good.
C)   a substitute good.
D)   a complement good.

Question 8

An increase in the number of consumers

Accepted Answer

A)   results only in a movement along the demand curve.
B)   shifts the supply curve leftward.
C)   shifts the demand curve rightward.
D)   Both answers B and C are correct.

Question 9

Many Southern farmers face a choice between planting peanuts or cotton. In 2014, farmers anticipated higher prices for cotton. In the market for peanuts in 2014, there would be ________ in the supply of peanuts, which leads to ________ in the price of peanuts and ________ in the quantity of peanuts.

Accepted Answer

A)   a decrease; an increase;a decrease
B)   an increase; a decrease; a decrease
C)   a decrease; an increase; an increase
D)   an increase; an increase; a decrease

Question 10

Suppose the equilibrium price for soft drinks is $1.00. If the current price in the soft drink market is $1.25 each

Accepted Answer

A)   there will be a surplus of soft drinks.
B)   there will be a shortage of soft drinks.
C)   the supply curve of soft drinks will shift leftward.
D)   the demand curve for soft drinks will shift leftward.

Question 11

An increase in technology for producing personal computers leads to

Accepted Answer

A)   an increase in the demand for personal computers.
B)   a decrease in the demand for personal computers.
C)   an increase in the supply of personal computers.
D)   a decrease in the supply of personal computers.

Question 12

For normal goods which of the following explains why demand curves slope downward?

Accepted Answer

A)   prices and income
B)   substitutes and complements
C)   resources and technology
D)   substitution effect and income effect

Question 13

If the price per bushel of apples increased from $7.00 to $8.00 because of a poor harvest, the

Accepted Answer

A)   demand for apples decreases.
B)   quantity of apples demanded decreases.
C)   quantity of apples supplied decreases.
D)   Both answers A and B are correct.

Question 14

The initial supply and demand curves for a good are illustrated in the above figure. If there is a rise in the price of a factor of production used to produce the good, then the new equilibrium price

Accepted Answer

A)   is less than $6.
B)   is $6.
C)   is more than $6.
D)   could be less than, equal to, or more than $6.

Question 15

-The figure above shows supply curves for soft drinks. Suppose the economy is at point a. A movement to point b could be the result of

Accepted Answer

A)   an increase in technology.
B)   a decrease in the relative price of a soft drink.
C)   an increase in the relative price of a soft drink.
D)   an increase in the money price of a soft drink.

Question 16

Which of the following raises the equilibrium price and increases the equilibrium quantity of used cars?

Accepted Answer

A)   a fall in income if used cars are an inferior good
B)   an increase in the wage rate paid to used car salespeople
C)   neither of the above because the question suggests a violation of the "law of demand"
D)   neither of the above because the question suggests a violation of the "law of supply"

Question 17

A consumer might consider in-line skates and elbow-pads to be

Accepted Answer

A)   products with upward sloping demand curves.
B)   unrelated goods.
C)   complements.
D)   substitutes.

Question 18

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in income if fruit snacks are an inferior good?

Accepted Answer

A)   from point a to point e
B)   from point a to point b
C)   from point a to point c
D)   from point a to point d

Question 19

If the demand and supply curves are described by the following equations P = a - bQ and P = c + dQ, respectively, the equilibrium quantity is Q* = (a - c) / (b + d).

Accepted Answer

A) True 
 B)False

Question 20

The law of demand implies that if nothing else changes, there is

Accepted Answer

A)   a positive relationship between the price of a good and the quantity demanded.
B)   a negative relationship between the price of a good and the quantity demanded.
C)   a linear relationship between price of a good and the quantity demanded.
D)   an exponential relationship between price of a good and the quantity demanded.

Exam 3: Demand and Supply

The interaction of supply and demand explains

Correct AnswerverifiedShow Answer

-The above figures show the market for oranges. Which figure(s) shows the effect of new successful advertising campaigns to eat more oranges?

Correct AnswerverifiedShow Answer

Consumers expect that the price of a gallon of gasoline will rise next week. As a result

Correct AnswerverifiedShow Answer

Kelly graduates and her income increases by $25,000 a year. Other things remaining the same, she increases the quantity of clothes she buys. For Kelly, clothes are

Correct AnswerverifiedShow Answer

-The figure above shows supply curves for soft drinks. Suppose the economy is at point a. A movement to point b could be the result of

Correct AnswerverifiedShow Answer

Which of the following raises the equilibrium price and increases the equilibrium quantity of used cars?

Correct AnswerverifiedShow Answer

The initial supply and demand curves for a good are illustrated in the above figure. If there is a rise in the price of a factor of production used to produce the good, then the new equilibrium price

Correct AnswerverifiedShow Answer

If the demand and supply curves are described by the following equations P = a - bQ and P = c + dQ, respectively, the equilibrium quantity is Q* = (a - c) / (b + d).

Correct AnswerverifiedShow Answer

If the price per bushel of apples increased from $7.00 to $8.00 because of a poor harvest, the

Correct AnswerverifiedShow Answer

-The figure above shows the demand for fruit snacks. Which movement reflects an increase in income if fruit snacks are an inferior good?

Correct AnswerverifiedShow Answer

Suppose the equilibrium price for soft drinks is $1.00. If the current price in the soft drink market is $1.25 each

Correct AnswerverifiedShow Answer

-Consider the demand curves for soft drinks shown in the figure above. Moving from point a to point c means that

Correct AnswerverifiedShow Answer

For normal goods which of the following explains why demand curves slope downward?

Correct AnswerverifiedShow Answer

An increase in the number of consumers

Correct AnswerverifiedShow Answer

When both the demand for a good increases and the supply of the good increases, the equilibrium quantity definitely increases.

Correct AnswerverifiedShow Answer

The law of demand implies that if nothing else changes, there is

Correct AnswerverifiedShow Answer

An increase in technology for producing personal computers leads to

Correct AnswerverifiedShow Answer

A consumer might consider in-line skates and elbow-pads to be

Correct AnswerverifiedShow Answer

Good A and good B are substitutes in production. The demand for good A increases so that the price of good A rises. The increase in the price of good A shifts the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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