Question 1

Suppose that the equilibrium price and quantity of new houses both increase.Which of the following could be a cause of this change?

Accepted Answer

A)  The demand for new houses increased,and the supply did not change.
B)  The supply of new houses increased,and the demand for new houses did not change.
C)  Both the supply and demand for new houses decreased.
D)  The supply of new houses decreased,and the demand for new houses did not change.
E)  Both the supply and the demand for new houses increased,and the supply increased by more than the demand.

Question 2

The law of supply states that,other things remaining the same,

Accepted Answer

A)  if the price of a good increases,firms buy less of it.
B)  if the price of a good increases,the quantity supplied increases.
C)  as people's income increases,the supply of goods increases.
D)  demand increases when supply increases.
E)  if the price of a good increases,the supply increases.

Question 3

Assume a competitive market is in equilibrium.There is an increase in demand,but no change in supply.As a result,the equilibrium price ________,and the equilibrium quantity ________.

Accepted Answer

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

Question 4

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

Accepted Answer

A)  an increase in the price of the tomato sauce used to produce pizza.
B)  an increase in the demand for pizza.
C)  a decrease in the number of firms producing pizza.
D)  an increase in the number of people who eat pizza.
E)  a decrease in the price of pizza.

Question 5

Which of the following shifts the supply curve of popcorn leftward?

Accepted Answer

A)  A decrease in the cost of producing popcorn.
B)  A decrease in the price of popcorn.
C)  An increase in the price of popcorn.
D)  A decrease in the number of popcorn suppliers.
E)  A technological development in the production of popcorn.

Question 6

Suppose the current price of a kilogram of steak is $6 per kilogram and the equilibrium price is $9 per kilogram.What takes place?

Accepted Answer

A)  There is a shortage,so the price rises and quantity demanded increases.
B)  There is a surplus,so the price falls and quantity demanded increases.
C)  There is a shortage,so the price falls and quantity demanded decreases.
D)  There is a shortage,so the price rises and quantity demanded decreases.
E)  There is a shortage,so the price falls and quantity demanded increases.

Question 7

When the demand curve shifts rightward and the market moves to a new equilibrium,then the

Accepted Answer

A)  quantity supplied increases.
B)  quantity supplied decreases.
C)  supply increases.
D)  supply decreases.
E)  price falls to restore the equilibrium.

Question 8

Computer chips are a normal good.Suppose the economy slips into a recession so that income falls.As a result,the demand for computer chips ________ so that the price of a computer chip ________.

Accepted Answer

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

Question 9

If the price is below the equilibrium price,

Accepted Answer

A)  the supply curve will shift rightward.
B)  there is a shortage.
C)  the demand curve will shift leftward.
D)  there is a surplus.
E)  the supply curve will shift leftward.

Question 10

-Using the data in the table above,the equilibrium quantity and equilibrium price for a cellular phone are

Accepted Answer

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

Question 11

Advances in productivity increase supply because they might

Accepted Answer

A)  increase the price expected in the future.
B)  raise the prices of resources used to produce the good.
C)  increase the number of firms producing the good.
D)  decrease the cost of production.
E)  decrease the number of goods available.

Question 12

-In the above figure,the shift in the supply curve from S to S₂ might reflect

Accepted Answer

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

Question 13

-The above figure shows the market for laptops.Which of the following shifts the supply curve from S₀to S₂?

Accepted Answer

A)  An increase in the productivity of the workers manufacturing laptops.
B)  A decrease in the price of laptops.
C)  A decrease in the number of laptop manufactures and sellers.
D)  An increase in the cost of hard drives.
E)  An increase in the price of laptops.

Question 14

-In the above figure,the shift in the demand curve from D to D₁ can be the result of

Accepted Answer

A)  an increase in the price of cola,a complement to pizza.
B)  an increase in the number of teenagers,all of whom demand more pizza than other age groups.
C)  a decrease in income if pizza is a normal good.
D)  new technology that increases the profit from producing pizza.
E)  a decrease in the price of a hamburger,a substitute for pizza.

Question 15

When there is a surplus of snowboards,the

Accepted Answer

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

Question 16

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

Accepted Answer

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

Question 17

If the Health Services Union successfully negotiates a wage increase for its members,how does the wage increase affect the supply of health services?

Accepted Answer

A)  The quantity supplied increases.
B)  The supply decreases.
C)  The supply increases.
D)  The quantity supplied decreases.
E)  Both answers B and D are correct.

Question 18

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

Accepted Answer

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

Question 19

-Which figure above shows the effect of a technological advance in the production of pizza?

Accepted Answer

A)  Figure A
B)  Figure B
C)  Figure C
D)  Figure D
E)  Both Figure A and Figure D

Question 20

Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers.The equilibrium quantity of beef will

Accepted Answer

A)  perhaps increase,decrease or stay the same,but more information is needed to determine which it does.
B)  increase.
C)  definitely either stay the same or decrease.
D)  decrease.
E)  stay the same.

Exam 4: Demand and Supply

-In the above figure,the shift in the supply curve from S to S₂ might reflect

Correct AnswerverifiedShow Answer

Which of the following shifts the supply curve of popcorn leftward?

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If the price is below the equilibrium price,

Correct AnswerverifiedShow Answer

-The above figure shows the market for laptops.Which of the following shifts the supply curve from S₀to S₂?

Correct AnswerverifiedShow Answer

Computer chips are a normal good.Suppose the economy slips into a recession so that income falls.As a result,the demand for computer chips ________ so that the price of a computer chip ________.

Correct AnswerverifiedShow Answer

When there is a surplus of snowboards,the

Correct AnswerverifiedShow Answer

-Using the data in the table above,the equilibrium quantity and equilibrium price for a cellular phone are

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If the Health Services Union successfully negotiates a wage increase for its members,how does the wage increase affect the supply of health services?

Correct AnswerverifiedShow Answer

Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers.The equilibrium quantity of beef will

Correct AnswerverifiedShow Answer

The law of supply states that,other things remaining the same,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose that the equilibrium price and quantity of new houses both increase.Which of the following could be a cause of this change?

Correct AnswerverifiedShow Answer

-In the above figure,the shift in the demand curve from D to D₁ can be the result of

Correct AnswerverifiedShow Answer

When the demand curve shifts rightward and the market moves to a new equilibrium,then the

Correct AnswerverifiedShow Answer

Assume a competitive market is in equilibrium.There is an increase in demand,but no change in supply.As a result,the equilibrium price ________,and the equilibrium quantity ________.

Correct AnswerverifiedShow Answer

-Which figure above shows the effect of a technological advance in the production of pizza?

Correct AnswerverifiedShow Answer

Suppose the current price of a kilogram of steak is $6 per kilogram and the equilibrium price is $9 per kilogram.What takes place?

Correct AnswerverifiedShow Answer

Advances in productivity increase supply because they might

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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Computer chips are a normal good.Suppose the economy slips into a recession so that income falls.As a result,the demand for computer chips so that the price of a computer chip .

Correct Answer
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Assume a competitive market is in equilibrium.There is an increase in demand,but no change in supply.As a result,the equilibrium price ,and the equilibrium quantity .

Correct Answer
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