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45) The initial equilibrium price in the market for Web pages is $200 per page and 1000
Web pages are created in a month. Many new Web design irms now enter the market. As a
result,
A) the supply of Web pages increases and the price falls.
B) the supply curve of Web pages shifts leftward and the price falls.
C) the demand for Web pages increases and the price rises.
D) the supply of Web pages increase and the price falls, which then increases the demand
for Web pages and the demand curve shifts rightward.
E) the demand for Web pages increases and the price falls.
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
46) Suppose the equilibrium price of movie tickets is $10. If the supply curve for movies
shifts ________, the equilibrium price will ________.
A) rightward; decrease
B) leftward; decrease
C) rightward; increase
D) leftward; not change
E) rightward; not change
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
47) Which of the following lowers the equilibrium price of a canoe?
A) an increase in the supply of canoes
B) an increase in the demand for canoes
C) an increase in the quantity of canoes supplied
D) a decrease in the supply of canoes
E) Both answers A and B are correct.
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Relective thinking
81
48) When personal computers were irst produced, the price was very high. As time passed,
the price of personal computers fell because
A) the demand for personal computers decreased.
B) the initial price was too high and nobody bought personal computers.
C) there were technological advances in the production of personal computers.
D) people's incomes increased and personal computers are an inferior good.
E) None of the above answers is correct.
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
49) If a freeze destroys oranges before they are harvested, the equilibrium price of an
orange ________, and the equilibrium quantity ________.
A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
E) does not change; decreases
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
50) Suppose that the price of bread rises. This rise could be the result of
A) a decrease in the supply of bread.
B) an increase in the supply of bread.
C) a decrease in the demand for bread.
D) Both answers A and C are correct.
E) Both answers B and C are correct.
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
82
51) If an early frost destroys most of the apple crop, the equilibrium price of an apple
________ and the equilibrium quantity ________.
A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
E) does not change; decreases
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
52) In Great Britain, raising taxes on gasoline has increased the costs of supplying
gasoline. As a result, the equilibrium quantity of gasoline ________ and the equilibrium price
of gasoline ________.
A) increases; rises
B) increases; falls
C) decreases; rises
D) decreases; falls
E) does not change; rises
Skill: Level 2: Using deinitions
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
53) Suppose that the price of lour used to produce bagels increases. Hence the equilibrium
price of a bagel ________ and the equilibrium quantity ________.
A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
E) does not change; does not change
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
83
54) Fresh orange juice and frozen orange juice are substitutes in production. The price of
fresh orange juice rises. As a result, the equilibrium price of frozen orange juice ________
and the equilibrium quantity ________.
A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
E) does not change; decreases
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
84
55) A construction boom occurs and many of the new buildings need plywood for their
framing. Which of the igures above best illustrates this change?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) Figure A or Figure C
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
85
56) Contractors can use plywood or brick to construct walls. Suppose the price of bricks
increases. Which of the igures above best illustrates the efect of this change on the
market for plywood?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) Figure A or Figure C depending on how contractors react to the higher price of bricks.
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
57) The number of logging irms increases. Which of the igures above best illustrates this
change?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) Figure A and Figure D
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
58) New technology for producing plywood is developed. Which of the igures above best
illustrates this change?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) Figure A and Figure D
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
86
59) In an efort to protect endangered species from the efects of logging in America's
national forests, the federal government passes a law prohibiting logging in most of the
state of Washington. Which of the igures above best illustrates the efect of this new law?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) None of the above because a prohibition cannot be illustrated using demand and supply
igures.
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
87
60) Which igure above shows the efect if research is published claiming that eating pizza
is healthy?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) Both Figure A and Figure D
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
88
61) Pizza is a normal good. Which igure above shows the efect of a decrease in
consumers' incomes?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) Both Figure B and Figure C
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
62) Which igure above shows the efect of a technological advance in the production of
pizza?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) Both Figure A and Figure D
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
63) Which igure above shows the efect of a decrease in the number of pizza sellers?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) Both Figure B and Figure C
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
89
64) Which igure above shows the efect of an increase in the cost of the tomato sauce used
to produce pizza?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) Both Figure B and Figure C
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
65) The above igure shows the market for pizza. The market is in equilibrium when
people's incomes decrease. If pizza is a normal good, then which 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
90
