978-0133460629 Chapter 04 Part 4

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83) The table above gives the demand schedule for lattes at the Bottomless Cup. If the

price of a latte is $3, then the quantity of lattes demanded is ________ an hour.

A) 90

B) 30

C) 80

D) 60

E) 230

Skill: Level 2: Using deinitions

Section: Checkpoint 4.1

Status: Old

AACSB: Analytical thinking

84) Other things remaining the same, the quantity of a good or service demanded will

increase if the price of the good or service

A) rises.

B) falls.

C) does not change.

D) rises or does not change.

E) rises or falls.

Skill: Level 2: Using deinitions

Section: Checkpoint 4.1

Status: Old

AACSB: Relective thinking

85) The “law of demand” indicates that if the University of Maine increases tuition, all

other things remaining the same,

A) the demand for classes will decrease at the University of Maine.

B) the demand for classes will increase at the University of Maine.

C) the quantity of classes demanded will increase at the University of Maine.

D) the quantity of classes demanded will decrease at the University of Maine.

E) both the demand for and the quantity of classes demanded will decrease at the

University of Maine.

Skill: Level 2: Using deinitions

Section: Checkpoint 4.1

Status: Old

AACSB: Relective thinking

86) The graph illustrates the demand for peanuts. Peanuts are a normal good because the

A) demand curve for peanuts slopes downward.

B) demand for peanuts increases when income increases.

C) demand for peanuts increases when the price of one of its substitutes rises.

D) peanuts have both substitutes and complements.

E) demand curve shows that if the price of peanuts rises, there is a movement along the

demand curve to a lower quantity demanded.

Skill: Level 2: Using deinitions

Section: Checkpoint 4.1

Status: Old

AACSB: Analytical thinking

87) A normal good is deined as a good

A) with a downward sloping demand curve.

B) for which demand increases when the price of a substitute rises.

C) for which demand increases when income increases.

D) for which demand increases when the number of demanders increases.

E) for which demand increases when the price of a complement falls.

Skill: Level 1: Deinition

Section: Checkpoint 4.1

Status: Old

AACSB: Relective thinking

88) Soda and peanuts are complements. Other inluences on buying plans remaining the

same, a rise in the price of soda

A) increases the demand for peanuts.

B) decreases the demand for peanuts.

C) decreases the demand for soda.

D) increases the demand for soda.

E) has no efect on the demand for peanuts, though it does change the quantity demanded

of peanuts.

Skill: Level 2: Using deinitions

Section: Checkpoint 4.1

Status: Old

AACSB: Relective thinking

89) People come to expect that the price of a gallon of gasoline will rise next week. As a

result,

A) today’s supply of gasoline increases.

B) today’s demand for gasoline increases.

C) the price of a gallon of gasoline falls today.

D) next week’s supply of gasoline decreases.

E) today’s demand for gasoline and today’s supply of gasoline do not change.

Skill: Level 3: Using models

Section: Checkpoint 4.1

Status: Old

AACSB: Relective thinking

90) One reason the demand for laptop computers might increase is a

A) fall in the price of a laptop computers.

B) fall in price of desktop computers.

C) change in preferences as laptops have become more portable, with faster processors

and larger hard drives.

D) poor quality performance record for laptop computers.

E) decrease in income if laptops are a normal good.

Skill: Level 2: Using deinitions

Section: Checkpoint 4.1

Status: Old

AACSB: Relective thinking

91) Teenagers drink more soda than other age groups. If the number of teenagers

increases, everything else remaining the same,

A) market demand for soda increases.

B) market demand for soda decreases.

C) market demand for soda does not change.

D) there is a movement along the market demand curve for soda.

E) None of the above answers is correct because the efect on the demand depends

whether the supply curve shifts rightward, leftward, or not at all.

Skill: Level 3: Using models

Section: Checkpoint 4.1

Status: Old

AACSB: Relective thinking

92) The number of buyers of sport utility vehicles, SUVs, decreases sharply. So the

A) demand curve for SUVs shifts leftward.

B) demand curve for SUVs shifts rightward.

C) demand curve for SUVs does not shift, nor is there a movement along then demand

curve.

D) demand curve for SUVs does not shift, but there is a movement downward along it.

E) supply curve for SUVs shifts rightward.

Skill: Level 2: Using deinitions

Section: Checkpoint 4.1

Status: Old

AACSB: Relective thinking

93) When moving along a demand curve, which of the following changes?

A) the consumers’ incomes

B) the prices of other goods

C) the number of buyers

D) the price of the good

E) the consumers’ preferences

Skill: Level 2: Using deinitions

Section: Checkpoint 4.1

Status: Old

AACSB: Relective thinking

94) The graph illustrates the demand curve for soda. After a rise in the price of a soda from

$1.00 a can to $2.00 a can, the quantity of soda demanded

A) decreases from 2 cans to 0 cans a day.

B) increases from 0 cans to 2 cans a day.

C) remains unchanged.

D) decreases from 1 can to 0 cans a day.

E) cannot be determined from the igure because the demand curve will shift to a new

curve.

Skill: Level 2: Using deinitions

Section: Checkpoint 4.1

Status: Old

AACSB: Analytical thinking

95) Pizza and tacos are substitutes, and the price of a pizza increases. Which of the

following correctly indicates what happens?

A) The demand for pizzas decreases and the demand for tacos increases.

B) The demand for both goods decreases.

C) The quantity of tacos demanded increases and the quantity of pizza demanded

decreases.

D) The quantity of pizza demanded decreases and the demand for tacos increases.

E) The demand for each decreases because both are normal goods.

Skill: Level 3: Using models

Section: Checkpoint 4.1

Status: Old

AACSB: Relective thinking

96) If the price of a DVD falls,

i. the demand curve for DVDs will shift rightward.

ii. the demand curve for DVDs will not shift.

iii. there will be a movement along the demand curve for DVDs.

A) i only

B) ii only

C) iii only

D) ii and iii

E) i and iii

Skill: Level 2: Using deinitions

Section: Checkpoint 4.1

Status: Old

AACSB: Analytical thinking

4.2 Supply

1) To be part of the supply for a good, a producer must be

A) only able to supply the good.

B) only willing to supply the good.

C) both able and willing to supply the good.

D) both able and willing to supply the good, and have already identiied a buyer.

E) both able and willing to supply the good, and have already sold the good.

Skill: Level 1: Deinition

Section: Checkpoint 4.2

Status: Old

AACSB: Relective thinking

2) The quantity supplied of a good or service is the

A) list of all quantities at diferent prices, as illustrated by a supply schedule and a supply

curve.

B) list of all quantities at diferent prices, as illustrated by a demand schedule and a

demand curve.

C) one quantity produced at a variety of prices.

D) quantity produced at one price.

Skill: Level 1: Deinition

Section: Checkpoint 4.2

Status: Old

AACSB: Relective thinking

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

A) demand increases when supply increases.

B) if the price of a good increases, irms buy less of it.

C) if the price of a good increases, the quantity supplied increases.

D) as people’s income increase, the supply of goods increases.

E) if the price of a good increases, the supply increases.

Skill: Level 1: Deinition

Section: Checkpoint 4.2

Status: Old

AACSB: Relective thinking

4) The law of supply states that other things remaining the same, a decrease in the price of

a kayak leads to

A) a decrease in the supply of kayaks.

B) a decrease in the quantity of kayaks supplied.

C) an increase in the supply of kayaks.

D) an increase in the quantity of kayaks supplied.

E) an increase in the supply of kayaks and a decrease in the quantity of kayaks supplied.

Skill: Level 2: Using deinitions

Section: Checkpoint 4.2

Status: Old

AACSB: Relective thinking

5) Which of the following helps explain why the law of supply exists?

A) Larger outputs result in lower costs of production.

B) The law of increasing opportunity cost

C) The costs of production remain constant throughout all levels of output.

D) Sellers realize that if the price increases, they make larger proits and do not need to

change their production.

E) The law of demand

Skill: Level 2: Using deinitions

Section: Checkpoint 4.2

Status: Old

AACSB: Relective thinking

6) The law of supply relects the fact that

A) people buy more of a good when its price falls.

B) suppliers have an incentive to use their resources in the way that brings the biggest

return.

C) higher prices are more attractive to consumers because they signal a higher quality

product.

D) businesses can sell more goods at lower prices.

E) the demand curve is downward sloping.

Skill: Level 2: Using deinitions

Section: Checkpoint 4.2

Status: Old

AACSB: Relective thinking

7) The supply schedule

A) shows the relationship between the quantity supplied and the price of a good when all

other inluences on selling plans remain the same.

B) is a curve showing the relationship between the amount the sellers are willing and able

to sell and the price of that good when all relevant factors change.

C) shows one quantity at one price.

D) is the schedule that suppliers have to keep or else they will be late.

E) shows the relationship between the quantity supplied and the price of a good when all

other inluences on selling plans change.

Skill: Level 1: Deinition

Section: Checkpoint 4.2

Status: Old

AACSB: Relective thinking

8) A supply curve

A) slopes downward.

B) slopes upward.

C) is a graph of the relationship between quantity supplied of a good and its price.

D) Both answers B and C are correct.

E) Both answers A and C are correct.

Skill: Level 1: Deinition

Section: Checkpoint 4.2

Status: Old

AACSB: Relective thinking

9) Which of the following results in a movement upward along the supply curve for movies

in theaters?

A) an increase in the price of movie tickets

B) a decrease in the price of movie tickets

C) a decrease in the price of downloaded movies

D) a decrease in movie star salaries

E) an increase in the number of theaters

Skill: Level 3: Using models

Section: Checkpoint 4.2

Status: Old

AACSB: Analytical thinking

10) If the price of iPods decreases,

A) there will be a movement down along the supply curve for iPods.

B) there will be a rightward shift in the iPod supply curve.

C) there will be a movement up along the supply curve for iPods.

D) the supply curve for iPods shifts leftward.

E) there has been a decrease in the price of iTunes songs.

Skill: Level 3: Using models

Section: Checkpoint 4.2

Status: Old

AACSB: Analytical thinking

11) Which of the following increases the quantity supplied of compact discs but does NOT

increase the supply of compact discs?

A) a decrease in the price of a compact disc

B) an increase in the price of a compact disc

C) a decrease in the number of suppliers of compact discs

D) an increase in the price of the resources used to produce compact discs

E) new technology that lowers the cost of producing compact discs

Skill: Level 2: Using deinitions

Section: Checkpoint 4.2

Status: Old

AACSB: Relective thinking

12) Which of the following increases the supply of a product?

A) lower prices for the resources used to produce the product

B) some producers going bankrupt and leaving the industry

C) a higher price for the product

D) an increase in the expected future price of the product

E) a decrease in productivity

Skill: Level 2: Using deinitions

Section: Checkpoint 4.2

Status: Old

AACSB: Relective thinking

13) Which of the following does NOT increase the supply of personal computers, that is,

does NOT shift the supply curve of personal computers?

A) an advance in the technology used to produce personal computers

B) an increase in the number of irms producing personal computer

C) a fall in the cost of the components used to assemble personal computers

D) a rise the price of a personal computer

E) a change in the expected future price of a personal computer

Skill: Level 2: Using deinitions

Section: Checkpoint 4.2

Status: Old

AACSB: Relective thinking