Question 1

Suppose that the price of compact disks (CDs) increases,other things equal.Which of the following in the most likely effect in the market for DVDs?

Accepted Answer

A)  a decrease in demand for DVDs
B)  an increase in demand for DVDs
C)  an increase in quantity demanded of DVDs
D)  a decrease in quantity demanded of DVDs
E)  a decrease in the quantity supplied of DVDsF) B) and E)
G) A) and C)

Question 2

An increase in professors' salaries increases the supply of college education.

Accepted Answer

A) True 
 B)False

Question 3

What is the effect of a decrease in the price of potato chips on the market for pretzels?

Accepted Answer

A)  Both equilibrium price and equilibrium quantity rise.
B)  Both equilibrium price and equilibrium quantity fall.
C)  Equilibrium price rises and equilibrium quantity falls.
D)  Equilibrium price falls and equilibrium quantity rises.
E)  Equilibrium price and equilibrium quantity remain unchanged.F) A) and B)
G) All of the above

Question 4

A leftward shift of a supply curve represents a decrease in supply.

Accepted Answer

A) True 
 B)False

Question 5

The impact of a $200 increase in income on quantity demanded would be called an income effect.

Accepted Answer

A) True 
 B)False

Question 6

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 costF) C) and D)
G) A) and B)

Question 7

An improvement in technology would shift

Accepted Answer

A)  the demand curve leftward
B)  the demand curve rightward
C)  the supply curve leftward
D)  neither the supply nor the demand curve; instead,there is movement along both of them
E)  the supply curve rightwardF) None of the above
G) A) and D)

Question 8

A demand curve shows how quantity demanded changes as the price changes.It implies that

Accepted Answer

A)  only a change in price can shift a demand curve
B)  everything else that affects demand is assumed to be constant
C)  quantity demanded is unrelated to price
D)  economists are concerned only with money
E)  it is impossible to show how anything but price affects demandF) B) and E)
G) C) and E)

Question 9

If the tea harvest is bad in a particular year,the supply of tea will

Accepted Answer

A)  decrease,its price will decrease,and the quantity demanded of coffee will increase
B)  decrease,its price will increase,and the quantity demanded of coffee will increase
C)  decrease,its price will increase,and the quantity demanded of coffee will decrease
D)  decrease,its price will decrease,and the quantity demanded of coffee will decrease
E)  increase,its price will increase,and the quantity demanded of coffee will increaseF) B) and C)
G) A) and E)

Question 10

Rent controls can result in

Accepted Answer

A)  deteriorating or abandoned buildings
B)  strong incentives to oust protected tenants
C)  payments to motivate tenants to move out
D)  benefits to rich people who get a windfall from low rents
E)  All of the answers are correct.F) D) and E)
G) B) and D)

Question 11

Which of the following is most likely to be a normal good?

Accepted Answer

A)  trips to the laundromat
B)  macaroni-and-cheese dinners
C)  tickets to major league baseball games
D)  bus rides
E)  used paperback booksF) None of the above
G) C) and D)

Question 12

As the price of milk increases,producers are normally willing to supply greater quantities.This is known as the law of

Accepted Answer

A)  demand
B)  gravity
C)  variable proportions
D)  profitability
E)  supplyF) All of the above
G) A) and B)

Question 13

Exhibit 4-9 
-The sum of the individual demands of all consumers in the market is called

Accepted Answer

A)  individual demand
B)  market demand
C)  inferior good
D)  market supply
E)  quantity demandedF) A) and D)
G) None of the above

Question 14

Recently it has been discovered that lobsters grown on lobster farms can feed on algae,which is a cheaper lobster food.As a result of this discovery,

Accepted Answer

A)  the supply curve for lobster will shift to the left
B)  the supply curve for lobster will shift to the right
C)  there will be an increase in the quantity of lobsters supplied
D)  there will be a decrease in the quantity of lobsters supplied
E)  both supply and demand curves will shift to the rightF) D) and E)
G) C) and E)

Question 15

Suppliers recognize there is a shortage in the market for their product when they notice that

Accepted Answer

A)  the quantity supplied exceeds the quantity demanded
B)  the quantity demanded is falling
C)  inventories are falling
D)  production exceeds new orders for the product
E)  government economists announce a shortage existsF) None of the above
G) A) and C)

Question 16

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.F) All of the above
G) None of the above

Question 17

Exhibit 4-14 2 to D1 B) movement from b to a on demand curve D1 C) demand shift from D1 to D2 D) movement from d to c on demand curve D2 E) none of the above" class="answers-bank-image d-inline" rel="preload" >
-Refer to exhibit 4-14.An increase in consumer income will cause which of the following to happen if baby formula is an inferior good?

Accepted Answer

A)  demand shift from D2 to D1
B)  movement from b to a on demand curve D1
C)  demand shift from D1 to D2
D)  movement from d to c on demand curve D2
E)  none of the aboveF) All of the above
G) C) and D)

Question 18

Which of the following is true of an increase in quantity supplied of a given good?

Accepted Answer

A)  It is represented by a rightward shift in the supply curve.
B)  It could result from a technological improvement.
C)  The price of a key resource used to produce the good may have decreased.
D)  It is caused by an increase in the price of the good.
E)  The price of an alternative good has increased.F) B) and D)
G) C) and E)

Question 19

Exhibit 4-16 1,Q1. B) P3,Q4 C) P4,Q3 D) P2,Q1 E) P1,Q1" class="answers-bank-image d-inline" rel="preload" >
-Refer to exhibit 4-16.If the market demand for baby formula is given by demand curve D2 and the supply is given by supply curve S2,which of the following is the market equilibrium?

Accepted Answer

A)  P1,Q1.
B)  P3,Q4
C)  P4,Q3
D)  P2,Q1
E)  P1,Q1F) B) and D)
G) C) and D)

Question 20

Which of the following might cause the demand for ice cream,a normal good,to increase?

Accepted Answer

A)  an increase in the price of ice cream
B)  an increase in the price of sherbet
C)  cooler weather
D)  a decrease in the number of consumers
E)  a decrease in consumer incomeF) None of the above
G) C) and E)

Exam 4: Demand, supply, and Markets

Recently it has been discovered that lobsters grown on lobster farms can feed on algae,which is a cheaper lobster food.As a result of this discovery,

Correct AnswerverifiedShow Answer

Rent controls can result in

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The impact of a $200 increase in income on quantity demanded would be called an income effect.

Correct AnswerverifiedShow Answer

Suppose that the price of compact disks (CDs) increases,other things equal.Which of the following in the most likely effect in the market for DVDs?

Correct AnswerverifiedShow Answer

Which of the following is true of an increase in quantity supplied of a given good?

Correct AnswerverifiedShow Answer

Which of the following is most likely to be a normal good?

Correct AnswerverifiedShow Answer

Which of the following might cause the demand for ice cream,a normal good,to increase?

Correct AnswerverifiedShow Answer

An increase in professors' salaries increases the supply of college education.

Correct AnswerverifiedShow Answer

If the tea harvest is bad in a particular year,the supply of tea will

Correct AnswerverifiedShow Answer

A demand curve shows how quantity demanded changes as the price changes.It implies that

Correct AnswerverifiedShow Answer

Suppliers recognize there is a shortage in the market for their product when they notice that

Correct AnswerverifiedShow Answer

Exhibit 4-9 -The sum of the individual demands of all consumers in the market is called

Correct AnswerverifiedShow Answer

A leftward shift of a supply curve represents a decrease in supply.

Correct AnswerverifiedShow Answer

What is the effect of a decrease in the price of potato chips on the market for pretzels?

Correct AnswerverifiedShow Answer

Exhibit 4-14 -Refer to exhibit 4-14.An increase in consumer income will cause which of the following to happen if baby formula is an inferior good?

Correct AnswerverifiedShow Answer

An improvement in technology would shift

Correct AnswerverifiedShow Answer

As the price of milk increases,producers are normally willing to supply greater quantities.This is known as the law of

Correct AnswerverifiedShow Answer

Exhibit 4-16 -Refer to exhibit 4-16.If the market demand for baby formula is given by demand curve D2 and the supply is given by supply curve S2,which of the following is the market equilibrium?

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified