Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
81
85) Related to the Economics in Practice on page 66: One explanation for the increase in the price of the
Baltimore newspaper is the increase in the cost of newsprint. This would cause the ________ of Baltimore
newspapers to ________.
A) supply; increase
B) quantity supplied; increase
C) supply; decrease
D) quantity supplied; decrease
Topic: Market Equilibrium: Economics in Practice
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
86) Related to the Economics in Practice on page 66: Assuming the demand for Baltimore newspapers
________ while the supply of Baltimore newspapers ________, the equilibrium price will definitely
decrease.
A) increases; increases
B) decreases; increases
C) increases; decreases
D) decreases; decreases
Topic: Market Equilibrium: Economics in Practice
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
87) When quantity demanded equals quantity supplied,
A) there must be no government intervention in the market.
B) the demand curve must be the same as the supply curve.
C) the market is in equilibrium.
D) all of the above
Topic: Market Equilibrium
Skill: Definition
Learning Outcome: Micro-4
88) When there is an excess demand of a product in an unregulated market, the tendency is for
A) price to rise.
B) price to decrease.
C) quantity supplied to decrease.
D) quantity demanded to increase.
Topic: Market Equilibrium
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
82
89) When there is a surplus of a product in an unregulated market, there is a tendency for
A) price to rise.
B) price to fall.
C) quantity demanded to increase.
D) quantity supplied to decrease.
Topic: Market Equilibrium
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
90) If the market for bluetooth headsets is unregulated and is presently characterized by excess demand,
you can accurately predict that price will
A) increase, the quantity demanded will fall, and the quantity supplied will rise.
B) increase, the quantity demanded will rise, and the quantity supplied will fall.
C) decrease, the quantity demanded will rise, and the quantity supplied will fall.
D) decrease, the quantity demanded will fall, and the quantity supplied will rise.
Topic: Market Equilibrium
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
91) Cell phones and bluetooth headsets are complements. A decrease in the price of bluetooth headsets
would cause which of the following in the market for cell phones?
A) The equilibrium price and quantity of cell phones would increase.
B) The equilibrium price and quantity of cell phones would decrease.
C) The equilibrium price of cell phones would increase and the equilibrium quantity would decrease.
D) The equilibrium price of cell phones would decrease and the equilibrium quantity would increase.
Topic: Market Equilibrium
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
92) Suppose that iPhones are normal goods. If the income of iPhone users decreases, you predict that in
the market for iPhones,
A) both equilibrium price and quantity will fall.
B) both equilibrium price and quantity will increase.
C) equilibrium price will increase and quantity will decrease.
D) equilibrium price will fall but quantity will increase.
Topic: Market Equilibrium
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
83
93) Unseasonably warm weather in Georgia resulted in a bumper crop of peaches. Ceteris paribus
A) the demand for peaches decreased and the price of peaches decreased.
B) the supply of peaches increased and the price of peaches decreased.
C) the supply of peaches decreased and the price of peaches increased.
D) the demand for peaches increased and the price of peaches increased.
Topic: Market Equilibrium
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
94) Bacon is used to produce bacon cheeseburgers, and the price of bacon decreases. In the market for
bacon cheeseburgers you would expect that
A) the demand for bacon cheeseburgers would increase and the price of bacon cheeseburgers would
increase.
B) the demand for bacon cheeseburgers would decrease and the price of bacon cheeseburgers would fall.
C) the supply of bacon cheeseburgers would decrease and the price of bacon cheeseburgers would
increase.
D) the supply of bacon cheeseburgers would increase and the price of bacon cheeseburgers would
decrease.
Topic: Market Equilibrium
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
95) If increases in government regulations have increased the cost of producing gasoline-powered
lawnmowers, you accurately predict that in the market for gasoline-powered lawnmowers, there will be
a(n)
A) decrease in the quantity supplied of gasoline-powered lawnmowers, a reduction in the price, and an
increase in the quantity demanded.
B) decrease in the supply of gasoline-powered lawnmowers, an increase in the price, and a decrease in
the quantity demanded.
C) decrease in the supply of gasoline-powered lawnmowers, an increase in the price, and a decrease in
the demand.
D) increase in the supply of gasoline-powered lawnmowers, an increase in the price, and a decrease in the
demand.
Topic: Market Equilibrium
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
84
96) Which of the following will definitely occur when there is a simultaneous increase in demand and an
increase in supply?
A) an increase in equilibrium price
B) a decrease in equilibrium price
C) an increase in equilibrium quantity
D) a decrease in equilibrium quantity
Topic: Market Equilibrium
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
97) A movement along the demand curve to the right may be caused by a(n)
A) decrease in income.
B) increase in supply.
C) fall in the number of substitute goods.
D) rise in the price of inputs.
Topic: Market Equilibrium
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
98) Which of the following will definitely occur when there is a decrease in the supply of and an increase
in demand for wireless speakers?
A) an increase in equilibrium price
B) a decrease in equilibrium price
C) an increase in equilibrium quantity
D) a decrease in equilibrium quantity
Topic: Market Equilibrium
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
99) Which of the following will definitely occur when there is a decrease in demand for and an increase in
supply of potato chips?
A) an increase in equilibrium price
B) a decrease in equilibrium price
C) an increase in equilibrium quantity
D) a decrease in equilibrium quantity
Topic: Market Equilibrium
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
85
100) A new fertilizer which greatly improves the corn crop yield is being widely used by corn farmers.
You accurately predict that this
A) will shift the supply curve of corn to the right, the equilibrium price of corn will increase, and the
demand for corn will fall.
B) will shift the supply curve of corn to the right, the equilibrium price of corn will decrease, and the
quantity demanded of corn will increase.
C) will shift the supply curve of corn to the left, the equilibrium price of corn will increase, and the
quantity demanded of corn will decrease.
D) will shift the supply curve of corn to the left, the equilibrium price of corn will increase, and the
demand for corn will fall.
Topic: Market Equilibrium
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
101) Pineapples and kumquats are substitute goods. Exceptional weather in Guatemala resulted in a
bumper crop of pineapples. Ceteris paribus
A) the price of both pineapples and kumquats will increase.
B) the price of both pineapples and kumquats will fall.
C) the price of kumquats will increase and the price of pineapples will fall.
D) the price of kumquats will fall and the price of pineapples will increase.
Topic: Market Equilibrium
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
86
Refer to Scenario 3.3 below to answer the question(s) that follow.
SCENARIO 3.3: Mustard and mayonnaise are substitutes. Mustard and relish are complements. Mustard
is a normal good. During the summer, about 50% of all mustard was recalled by manufacturers and
removed from store shelves.
102) Refer to Scenario 3.3. As a result of the recall, you would expect that
A) the supply of mustard would decrease, the price of mustard would increase, and the demand for
mustard would decrease.
B) the price of mustard would increase, the supply of mustard would increase, and the quantity
demanded of mustard would decrease.
C) the supply of mustard would decrease, the price of mustard would increase, and the quantity
demanded of mustard would decrease.
D) the price of mustard would increase and both the quantity of mustard supplied and the quantity of
mustard demanded would increase.
Topic: Market Equilibrium
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
103) Refer to Scenario 3.3. The mustard recall would have caused the equilibrium price of mayonnaise to
________ and the equilibrium quantity of mayonnaise to ________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
Topic: Market Equilibrium
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
104) Refer to Scenario 3.3. The mustard recall would have caused
A) an increase in the demand for relish.
B) an increase in the quantity demanded of relish.
C) a decrease in the demand for relish.
D) a decrease in the quantity demanded of relish.
Topic: Market Equilibrium
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
