978-0133460629 Chapter 04 Part 9

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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

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

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

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

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

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

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

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

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

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