Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
1
Econ 9
Ch 3 Practice Problems
These practice problems are not reflective of all material covered in class or the textbook.
1. Equilibrium quantity must increase when demand
a. increases and supply does not change, when demand does not change and supply
increases, and when both demand and supply increase.
b. increases and supply does not change, when demand does not change and supply
increases, and when both demand and supply decrease.
c. decreases and supply does not change, when demand does not change and supply
decreases, and when both demand and supply increase.
d. decreases and supply does not change, when demand does not change and supply
decreases, and when both demand and supply decrease.
ANS: A
2. Good X and good Y are substitutes. If the price of good Y increases, then the
a. demand for good X will decrease.
b. quantity demanded of good X will decrease.
c. demand for good X will increase.
d. quantity demanded of good X will increase.
ANS: C
3. Funsters, Inc., the largest toy company in the country, sells its most popular doll for $15.
It has just learned that its leading competitor, Toysorama, is mass-producing an excellent
copy and plans to flood the market with their $5 doll in six weeks. Funsters should
a. “fight fire with fire” by decreasing supply of its doll for six weeks and then increasing
the supply.
b. increase the supply of its doll now before the other doll hits the market.
c. increase the price of its doll now.
d. discontinue its doll.
ANS: B
4. A demand curve shows the relationship between price and
a.
income.
b.
quantity demanded.
c.
production.
d.
income and quantity demanded.
ANS: B
5. A decrease in quantity demanded
a. results in a movement downward and to the right along a demand curve.
b. results in a movement upward and to the left along a demand curve.
c. shifts the demand curve to the left.
d. shifts the demand curve to the right.
ANS: B
6. If the supply of a product decreases, then we would expect equilibrium price
a. to increase and equilibrium quantity to decrease.
b. to decrease and equilibrium quantity to increase.
c. and equilibrium quantity to both increase.
d. and equilibrium quantity to both decrease.
ANS: A
Figure 4
price
