66) The above igure shows the market for pizza. The market is in equilibrium when the
cheese used to produce pizza falls in price. What point represents the most likely new price
and quantity?
A) A
B) B
C) C
D) D
E) E
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
67) The above igure shows the market for pizza. The market is in equilibrium when the
wages paid pizza workers increases. What point represents the most likely new price and
quantity?
A) A
B) B
C) C
D) D
E) E
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
68) The above igure shows the market for pizza. The market is in equilibrium when new
pizza irms enter the market. What point represents the most likely new price and
quantity?
A) A
B) B
C) C
D) D
E) E
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
91
69) The above igure shows the market for pizza. The market is in equilibrium when some
of the pizza irms go out of business. What point represents the most likely new price and
quantity?
A) A
B) B
C) C
D) D
E) E
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
70) The above igure shows the market for pizza. The market is in equilibrium when people
learn that eating pizza helps prevent heart disease. What point represents the most likely
new price and quantity?
A) A
B) B
C) C
D) D
E) E
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
71) The above igure shows the market for pizza. The market is in equilibrium. Pizza and
tacos are substitutes for consumers. The price of tacos falls. What point represents the
most likely new price and quantity?
A) A
B) B
C) C
D) D
E) E
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
92
72) If both the supply and demand curves shift simultaneously, we can always predict what
will happen to
A) both the price and the quantity.
B) either the price or the quantity, but not both.
C) only the price.
D) only the quantity.
E) neither the price nor the quantity.
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
73) A competitive market is in equilibrium. Then there is an increase in demand and an
increase in supply. The equilibrium price ________, and the equilibrium quantity ________.
A) rises; increases
B) perhaps changes but we can’t say if it rises, falls, or stays the same; does not change
C) falls; increases
D) perhaps changes but we can’t say if it rises, falls, or stays the same; increases
E) falls; perhaps changes but we can’t say if it increases, decreases, or stays the same
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
74) If the demand and supply both increase equally, then the equilibrium price ________, and
the equilibrium quantity ________.
A) increases; increases
B) increases; does not change
C) does not change; increases
D) increases; decreases
E) decreases; does not change
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
93
75) Kiwis and strawberries are substitutes for consumers. An increase in the price of a kiwi
coupled with an increase in the number of strawberry growers ________ the equilibrium
price of a pound of strawberries and ________ the equilibrium quantity of strawberries.
A) raises; increases
B) probably changes, but more information is needed to determine if it rises or falls;
increases
C) raises; probably changes, but more information is needed to determine if it increases or
decreases
D) lowers; probably changes, but more information is needed to determine if it increases or
decreases
E) lowers; increases
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
76) A competitive market is in equilibrium. Then there is a decrease in demand and a
decrease in supply. The equilibrium price ________, and the equilibrium quantity ________.
A) rises; decreases
B) perhaps changes but we can’t say if it rises, falls, or stays the same; decreases
C) falls; increases
D) perhaps changes but we can’t say if it rises, falls, or stays the same; increases
E) rises; increases
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
77) If both supply and demand decrease by the same amount, the equilibrium price
A) does not change.
B) rises.
C) falls.
D) cannot be predicted.
E) None of the answers is correct because the price depends on what happens to the
equilibrium quantity.
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
94
78) Both the demand for and supply of cars changes in France. You observe that the
quantity of cars does not change but the price rises. Thus, which of the following occurred?
A) Demand and supply increased by an equal amount.
B) Demand and supply decreased by an equal amount.
C) Demand increased and supply decreased by an equal amount.
D) Demand decreased and supply increased by an equal amount.
E) Demand increased by a larger magnitude than supply decreased.
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
79) Suppose chickens and beef cattle are produced by diferent companies on diferent
sites. If bad weather causes an increase in the price of hay, a food eaten by beef cattle but
not by chickens, the equilibrium price of beef will ________, and the equilibrium price of
chicken will ________.
A) decrease; decrease
B) decrease; increase
C) stay the same; increase
D) increase; increase
E) increase; decrease
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: New
AACSB: Analytical thinking
80) What happens to the equilibrium price and quantity of automobile tires if rubber prices
increase and the price of automobiles falls?
A) The equilibrium price and quantity decrease.
B) The equilibrium price falls, but the change in equilibrium quantity is unknown.
C) The equilibrium price and quantity increase.
D) The equilibrium quantity decreases, but the change in equilibrium price is unknown.
E) The equilibrium price rises, but the change in equilibrium quantity is unknown.
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: New
AACSB: Analytical thinking
95
81) Suppose that the demand curve for desktop computers shifts rightward and at the
same time the supply curve shifts leftward. Which of the following could have caused these
shifts?
A) Desktop computers are a normal good and incomes increased, while more irms entered
the market.
B) The price of a laptop computer, a substitute for desktop computers, fell and the cost of
producing desktop computers decreased.
C) Consumers purchased more computers because of the Christmas season and the labor
costs of producing desktop computers decreased.
D) Desktop computers are a normal good and incomes increased, while the labor costs of
producing personal computers increased.
E) Desktop computers are a normal good and incomes decreased, while the labor costs of
producing personal computers increased.
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
82) If the demand curve for desktop computers shifts rightward and at the same time the
supply curve shifts leftward, then
A) the equilibrium price deinitely rises.
B) the equilibrium price deinitely falls.
C) the equilibrium price deinitely remains the same.
D) More information is needed to determine the efect on the equilibrium price.
E) the equilibrium quantity deinitely increases.
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
83) If the demand curve for desktop computers shifts rightward and at the same time the
supply curve shifts leftward, then
A) the equilibrium quantity deinitely increases.
B) the equilibrium quantity deinitely decreases.
C) the equilibrium quantity deinitely remains the same.
D) More information is needed to determine the efect on the equilibrium quantity.
E) the equilibrium price deinitely falls.
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
96
84) The demand for oranges increases while the supply decreases. The equilibrium price of
oranges ________, and the equilibrium quantity ________.
A) rises; decreases
B) falls; perhaps changes but we can’t say if it increases, decreases, or stays the same
C) falls; increases
D) does not change; perhaps changes but we can’t say if it increases, decreases, or stays
the same
E) rises; perhaps changes but we can’t say if it increases, decreases, or stays the same
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
85) The demand for cat food decreases while the supply increases. The equilibrium price of
cat food ________, and the equilibrium quantity ________.
A) does not change; increases
B) rises; decreases
C) falls; perhaps changes but we can’t say if it increases, decreases, or stays the same
D) rises; perhaps changes but we can’t say if it increases, decreases, or stays the same
E) falls; increases
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
86) Suppose the government imposes a small carbon tax on automakers. But the price of
gasoline has doubled due to a Middle East crisis which has reduced oil production. In the
market for autos, these changes mean that supply and demand have both changed with the
efect on the demand larger than the efect on the supply. The result is that the price of
autos will ________ and the number of autos sold will ________.
A) rise; perhaps change but we can’t say if it increases, decreases, or stays the same
B) rise; increase
C) rise; decrease
D) fall; perhaps change but we can’t say if it increases, decreases, or stays the same
E) fall; decrease
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
97
87) If both producers and consumers believe that a product’s price will rise in the future,
then at the present, demand ________ and supply ________.
A) increases; increases
B) decreases; decreases
C) increases; decreases
D) decreases; increases
E) does not change; does not change
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
88) If both producers and consumers believe that a product’s price will rise in the future,
then at the present, the equilibrium price
A) does not change.
B) rises.
C) falls.
D) might rise, fall, or not change, but the change can never be predicted.
E) might rise, fall, or not change depending on whether the efect from the producers is
greater than or less than the efect from the consumers.
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
89) The equilibrium price of a good occurs if the
A) quantity of the good demanded equals the quantity of the good supplied.
B) quantity of the good demanded is greater than the quantity of the good supplied.
C) quantity of the good demanded is less than the quantity of the good supplied.
D) demand for the good is equal to the supply of the good.
E) price of the good seems reasonable to most buyers.
Skill: Level 1: Deinition
Section: Checkpoint 4.3
Status: Old
AACSB: Relective thinking
98
90) If there is a surplus of a good, the quantity demanded is ________ the quantity supplied
and the price will ________.
A) less than; rise
B) less than; fall
C) greater than; rise
D) greater than; fall
E) equal to; fall
Skill: Level 2: Using deinitions
Section: Checkpoint 4.3
Status: Old
AACSB: Relective thinking
91) The graph illustrates the market for bottled water. When the price exceeds the
equilibrium price, the quantity demanded is ________ the quantity supplied and the price of
the good will ________.
A) less then; fall
B) greater than; rise
C) greater than; fall
D) less than; rise
E) equal to; fall
Skill: Level 2: Using deinitions
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
99
92) Which of the following is correct?
i. A surplus puts downward pressure on the price of a good.
ii. A shortage puts upward pressure on the price of a good.
iii. There is no surplus or shortage at equilibrium.
A) i and ii
B) i and iii
C) ii and iii
D) i, ii, and iii
E) only iii
Skill: Level 2: Using deinitions
Section: Checkpoint 4.3
Status: Old
AACSB: Relective thinking
93) Which of the following is the best explanation for why the price of gasoline increases
during the summer months?
A) Oil producers have higher costs of production in the summer.
B) Sellers have to earn proits during the summer to cover losses in the winter.
C) There is increased driving by families going on vacation.
D) There is less competition among oil reineries in the summer.
E) The number of gas stations open 24 hours a day rises in the summer months and so the
price must rise to cover the higher costs.
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Relective thinking
94) The number of people looking to buy ceiling fans increases, so there is an increase in
the
A) quantity of ceiling fans demanded and a surplus of ceiling fans.
B) demand for ceiling fans and a rise in the price of a ceiling fan.
C) demand for ceiling fans and a surplus of ceiling fans.
D) supply of ceiling fans and no change in the price of a ceiling fan.
E) demand for ceiling fans and in the supply of ceiling fans.
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
100