Question 1

There are three consumers in the market for playing cards: Don,John,and Ron.At a price of $2 per pack,the quantities demanded by each are 3,2,and 1,respectively.At a price of $1.50 per pack,the quantities demanded by each are 4,5,and 3,respectively.Which of the following is true?

Accepted Answer

A)   The market demand curve for playing cards does not obey the law of demand.
B)   The price decrease causes the quantity demanded in this market to increase by 6.
C)   The price decrease causes John's demand curve to shift the most.
D)   At a price of $1 per pack,the quantity demanded in this market must be 20.
E)   Don's behavior does not obey the law of demand.

Question 2

Suppose demand increases and supply increases.Which of the following will happen?

Accepted Answer

A)   equilibrium price will increase
B)   equilibrium price will decrease
C)   equilibrium quantity will increase
D)   equilibrium quantity will decrease
E)   neither the equilibrium price nor the equilibrium quantity will change

Question 3

The difference between normal and inferior goods is that

Accepted Answer

A)   normal goods are of better quality than inferior goods
B)   an increase in price will shift the demand curve for a normal good rightward and the demand curve for an inferior good leftward
C)   if the price of a normal good increases,individuals who buy it are poorer;for inferior goods,the opposite is true
D)   an inferior good is something that will not be demanded until quantities of the normal good have been exhausted
E)   an increase in income will shift the demand curve for a normal good rightward and the demand curve for an inferior good leftward

Question 4

As the price of ballpoint pens increases,the demand for felt-tip pens can be expected to decrease.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is the best example of substitutes?

Accepted Answer

A)   coffee and cream
B)   videotapes and VCRs
C)   money and biscuits
D)   tortillas and salsa
E)   hiking boots and athletic shoes

Question 6

A decrease in the price of a good will cause a leftward shift of the demand curve,if it is a normal good.

Accepted Answer

A) True 
 B)False

Question 7

Larger quantities of any good will be supplied at higher prices because

Accepted Answer

A)   consumers will be more satisfied
B)   higher prices attract resources from other uses
C)   people are naturally lazy and have to be bribed to give up their leisure
D)   price and quantity supplied are inversely related
E)   of the law of decreasing opportunity cost

Question 8

The substitution effect of a price change describes what happens to the shift in demand for a good when its price changes.

Accepted Answer

A) True 
 B)False

Question 9

Many people argue against increasing the minimum wage because they believe the result would be increased unemployment.Which of the following best summarizes this argument? A higher minimum wage would

Accepted Answer

A)   increase the supply of labor while decreasing the demand for labor
B)   decrease the supply of labor while increasing the demand for labor
C)   increase the quantity supplied of labor while decreasing the quantity demanded of labor
D)   decrease the quantity supplied of labor while increasing the quantity demanded of labor
E)   increase the supply of labor while decreasing the quantity demanded of labor

Question 10

Which of the following would shift the supply curve for a product to the right?

Accepted Answer

A)   an increase in the price of a resource used in the good's production
B)   the expectation of a higher price in the near future
C)   an increase in the price of the product
D)   an increase in the price of an alternative good
E)   an improvement in the technology for producing the good

Question 11

The market for chewing gum is competitive with a current price of 50 cents per pack and a quantity of 100,000 packs per day.Which of the following events would lead to a new equilibrium price of 75 cents and a new equilibrium quantity of 125,000?

Accepted Answer

A)   an increase in the price of other kinds of candy
B)   an increase in the price of the ingredients used to make chewing gum
C)   an agreement by workers in the chewing gum industry to work for lower wages
D)   a decrease in the number of young people in the population
E)   a decrease in income

Question 12

Which of the following is not true regarding a change in quantity demanded?

Accepted Answer

A)   A change in quantity demanded is shown by a movement along a given demand curve.
B)   The demand curve shifts whenever the quantity demanded changes.
C)   A change in the price of a good,other things constant,will lead to a change in quantity demanded.
D)   The lower the price of a product,other things constant,the higher the quantity demanded.
E)   A shift of the supply curve might cause a change in quantity demanded.

Question 13

Which of the following will cause the demand curve for gasoline to shift leftward?

Accepted Answer

A)   a decrease in the price of gasoline
B)   an increase in the price of gasoline
C)   a leftward shift of the supply of gasoline
D)   a rightward shift of the supply of cars
E)   a decrease in the price of bicycles

Question 14

Two goods are considered substitutes only if a(n)

Accepted Answer

A)   decrease in the demand for one leads to a decrease in the supply of the other
B)   increase in the demand for one leads to a decrease in the supply of the other
C)   increase in the price of one leads to an increase in the demand for the other
D)   decrease in the price of one leads to an increase in the demand for the other
E)   decrease in the supply of one leads producers to switch to production of the other

Question 15

An increase in the price of a good normally increases the

Accepted Answer

A)   demand for its substitutes
B)   supply of complements for the good
C)   purchasing power of consumers' dollar incomes
D)   money income of the consumer
E)   quantity demanded of all goods that are unrelated to the good in question

Question 16

Disequilibrium occurs when quantity demanded equals quantity supplied.

Accepted Answer

A) True 
 B)False

Question 17

If a decrease in the price of a good causes a rightward shift of the demand curve for that good,then it is an inferior good.

Accepted Answer

A) True 
 B)False

Question 18

Exhibit 4-9
 
-Refer to the supply curve in Exhibit 4-9.If the price increases from P to P',quantity supplied will

Accepted Answer

A)   increase
B)   The answer can only be determined with numbers to analyze.
C)   stay the same
D)   drop to zero
E)   decrease

Question 19

Which of the following is the best example of complements?

Accepted Answer

A)   milk and cheese
B)   coffee and tea
C)   CDs and DVDs
D)   hiking boots and athletic shoes
E)   film and film processing (developing)

Question 20

Velcro is becoming more and more popular for a variety of uses,including as fasteners for shoes.What should happen to the equilibrium price and quantity for shoelaces as a result?

Accepted Answer

A)   Both price and quantity should increase.
B)   Both price and quantity should decrease.
C)   Price should increase and quantity decrease.
D)   Price should decrease and quantity increase.
E)   Nothing.

Exam 4: Demand, supply, and Markets

Many people argue against increasing the minimum wage because they believe the result would be increased unemployment.Which of the following best summarizes this argument? A higher minimum wage would

Correct AnswerverifiedShow Answer

Larger quantities of any good will be supplied at higher prices because

Correct AnswerverifiedShow Answer

Disequilibrium occurs when quantity demanded equals quantity supplied.

Correct AnswerverifiedShow Answer

Two goods are considered substitutes only if a(n)

Correct AnswerverifiedShow Answer

Suppose demand increases and supply increases.Which of the following will happen?

Correct AnswerverifiedShow Answer

As the price of ballpoint pens increases,the demand for felt-tip pens can be expected to decrease.

Correct AnswerverifiedShow Answer

Which of the following will cause the demand curve for gasoline to shift leftward?

Correct AnswerverifiedShow Answer

The market for chewing gum is competitive with a current price of 50 cents per pack and a quantity of 100,000 packs per day.Which of the following events would lead to a new equilibrium price of 75 cents and a new equilibrium quantity of 125,000?

Correct AnswerverifiedShow Answer

The substitution effect of a price change describes what happens to the shift in demand for a good when its price changes.

Correct AnswerverifiedShow Answer

The difference between normal and inferior goods is that

Correct AnswerverifiedShow Answer

If a decrease in the price of a good causes a rightward shift of the demand curve for that good,then it is an inferior good.

Correct AnswerverifiedShow Answer

There are three consumers in the market for playing cards: Don,John,and Ron.At a price of $2 per pack,the quantities demanded by each are 3,2,and 1,respectively.At a price of $1.50 per pack,the quantities demanded by each are 4,5,and 3,respectively.Which of the following is true?

Correct AnswerverifiedShow Answer

Which of the following is not true regarding a change in quantity demanded?

Correct AnswerverifiedShow Answer

A decrease in the price of a good will cause a leftward shift of the demand curve,if it is a normal good.

Correct AnswerverifiedShow Answer

Which of the following is the best example of substitutes?

Correct AnswerverifiedShow Answer

An increase in the price of a good normally increases the

Correct AnswerverifiedShow Answer

Velcro is becoming more and more popular for a variety of uses,including as fasteners for shoes.What should happen to the equilibrium price and quantity for shoelaces as a result?

Correct AnswerverifiedShow Answer

Exhibit 4-9 -Refer to the supply curve in Exhibit 4-9.If the price increases from P to P',quantity supplied will

Correct AnswerverifiedShow Answer

Which of the following would shift the supply curve for a product to the right?

Correct AnswerverifiedShow Answer

Which of the following is the best example of complements?

Correct AnswerverifiedShow Answer

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