Page 21
97.
(Figure: The Demand and Supply of Wheat) Use Figure: The Demand and Supply of
Wheat. If there is a decrease in supply of 2,000 bushels per period at each price, the
equilibrium price and quantity will be _____ and _____ bushels per period, respectively.
A)
$5; 5,000
B)
$7; 5,000
C)
$6; 4,000
D)
$8; 6,000
98.
(Figure: The Demand and Supply of Wheat) Use Figure: The Demand and Supply of
Wheat. A temporary price of $2 in this market would result in a _____ of _____ bushels
per period.
A)
surplus; 4,000
B)
shortage; 8,000
C)
shortage; 10,000
D)
surplus; 10,000
99.
(Figure: The Demand and Supply of Wheat) Use Figure: The Demand and Supply of
Wheat. What is the equilibrium quantity in this wheat market each period?
A)
12,000 bushels
B)
2,000 bushels
C)
10,000 bushels
D)
6,000 bushels
100.
(Figure: The Demand and Supply of Wheat) Use Figure: The Demand and Supply of
Wheat. If a price of $8 temporarily exists in this market, a _____ of _____ bushels per
period will result.
A)
shortage; 2,000
B)
surplus; 4,000
C)
shortage; 4,000
D)
surplus; 6,000
101.
(Figure: The Demand and Supply of Wheat) Use Figure: The Demand and Supply of
Wheat. A temporary price of $4 in this market would result in a _____ of _____ bushels
per period.
A)
surplus; 4,000
B)
shortage; 2,000
C)
shortage; 4,000
D)
surplus; 2,000
Page 22
102.
(Table: The Lemonade Market) Use Table: The Lemonade Market. If the price of
lemonade is $1.25 per cup, we expect to see a:
A)
rising price to eliminate the shortage.
B)
rising price to eliminate the surplus.
C)
falling price to eliminate the shortage.
D)
market in equilibrium.
Use the following to answer questions 103-105:
103.
(Figure: The Blu-ray Disc Rental Market) Use Figure: The Blu-ray Disc Rental Market.
If the rental price of Blu-ray discs rises from $5 to $7:
A)
demand will decrease from 50 to 30 rentals per weekend.
B)
the quantity demanded will decrease from 50 to 30 rentals per weekend.
C)
supply will increase from 50 to 70 rentals per weekend.
D)
the quantity supplied will increase from 50 to 60 rentals per weekend.
Page 23
104.
(Figure: The Blu-ray Disc Rental Market) Use Figure: The Blu-ray Disc Rental Market.
At a rental price of $3, there will be:
A)
equilibrium in the rental market for Blu-ray discs.
B)
an increase in demand.
C)
an excess supply of 40 Blu-ray disc rentals.
D)
an excess demand of 40 Blu-ray disc rentals.
105.
(Figure: The Blu-ray Disc Rental Market) Use Figure: The Blu-ray Disc Rental Market.
At a rental price of $6, there will be:
A)
equilibrium in the rental market for Blu-ray discs.
B)
a decrease in demand.
C)
an excess supply of 20 Blu-ray disc rentals.
D)
an excess demand of 20 Blu-ray disc rentals.
106.
If the market for buffalo meat is in equilibrium, the price of buffalo meat will probably
_____ in the near future.
A)
increase
B)
not change
C)
decrease
D)
increase considerably
107.
Market equilibrium occurs when:
A)
there is no incentive for prices to change in the market.
B)
quantity demanded equals quantity supplied.
C)
the market clears.
D)
there is no incentive for prices to change in the market, quantity demanded equals
quantity supplied, and the market clears.
108.
The market equilibrium is found at the:
A)
price where quantity demanded exceeds quantity supplied.
B)
price where quantity demanded equals quantity supplied.
C)
price where quantity supplied exceeds quantity demanded.
D)
highest price possible in the market.
109.
Suppose the equilibrium price of good Y is $5 and the equilibrium quantity is 150 units.
Supply in this market is upward sloping. If the price of good Y is $12:
A)
the quantity demanded will be greater than 150 units.
B)
the quantity supplied will be less than 150 units.
C)
there will be an excess demand for good Y.
D)
there will be an excess supply of good Y.
Page 24
110.
Excess supply occurs when the:
A)
price is above the equilibrium price.
B)
quantity demanded exceeds the quantity supplied.
C)
price is below the equilibrium price.
D)
quantity demanded exceeds the quantity supplied and the price is below the
equilibrium price.
111.
If in a competitive market the quantity supplied exceeds the quantity demanded, we
expect prices to:
A)
stay the same.
B)
rise.
C)
fall.
D)
rise first, then fall when demand decreases.
112.
If the quantity of housing supplied in a community is greater than the quantity of houses
demanded, the existing price:
A)
is above the market equilibrium price.
B)
will rise to clear the market.
C)
will either rise or remain unchanged.
D)
is below the market equilibrium price.
113.
If the supply and demand curves intersect at a price of $47, then any price above that
would result in:
A)
a shortage.
B)
a surplus.
C)
equilibrium.
D)
an increase in demand.
114.
If the supply and demand curves intersect at a price of $14, then any price below that
would result in:
A)
a shortage.
B)
a surplus.
C)
equilibrium.
D)
an increase in demand.
Page 25
115.
Suppose the equilibrium price of good X is $25 and the equilibrium quantity is 124
units. If the price of good X is $2:
A)
there will be excess demand for good X.
B)
there will be an excess supply of good X.
C)
the market will clear.
D)
the quantity demanded of good X will be less than 124 units.
116.
The _____ tomatoes will decrease if fertilizer prices rise.
A)
demand for
B)
shortage of
C)
supply of
D)
equilibrium price of
117.
Which factor will raise the price of milk?
A)
a shift to the right of the supply curve for milk
B)
a shift to the right of the demand curve for milk
C)
an increase in the number of milk suppliers
D)
a decrease in the number of milk buyers
Page 26
Use the following to answer questions 118-121:
118.
(Figure: Four Markets for Online Movie Rentals) Use Figure: Four Markets for Online
Movie Rentals. If D1 or S1 is the original curve and D2 or S2 is the new curve, which of
the graphs shows a change that results in a decrease in the quantity of online movie
rentals supplied?
A)
A
B)
B
C)
C
D)
D
119.
(Figure: Four Markets for Online Movie Rentals) Use Figure: Four Markets for Online
Movie Rentals. Which of the graphs illustrates what may happen in the market for
online movie rentals if D1 or S1 is the original curve and D2 or S2 is the new curve and if
the cost to the firm of producing online movie rentals falls?
A)
A
B)
B
C)
C
D)
D
Page 27
120.
(Figure: Four Markets for Online Movie Rentals) Use Figure: Four Markets for Online
Movie Rentals. Which of the graphs shows what may happen in the market for online
movie rentals if D1 or S1 is the original curve and D2 or S2 is the new curve and if the
cost of buying content for online movie distributors like Apple (i.e., the price that Apple
pays for the online content to sell to consumers) decreases?
A)
A
B)
B
C)
C
D)
D
121.
(Figure: Four Markets for Online Movie Rentals) Use Figure: Four Markets for Online
Movie Rentals. Which of the graphs shows what may happen if D1 or S1 is the original
curve and D2 or S2 is the new curve and if some of the online stores that rent online
movie rentals close?
A)
A
B)
B
C)
C
D)
D
Use the following to answer questions 122-126:
Page 28
122.
(Figure: Shifts in Demand and Supply) Use Figure: Shifts in Demand and Supply. The
figure shows how supply and demand might shift in response to specific events.
Suppose scientists discover that eating a tomato a day prevents aging. Which panel
BEST describes how this will affect the market for tomatoes?
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
123.
(Figure: Shifts in Demand and Supply) Use Figure: Shifts in Demand and Supply. The
figure shows how supply and demand might shift in response to specific events.
Suppose a fall frost destroys one-third of the nation’s orange crop. Which panel BEST
describes how this will affect the market for oranges?
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
124.
(Figure: Shifts in Demand and Supply) Use Figure: Shifts in Demand and Supply. The
figure shows how supply and demand might shift in response to specific events.
Suppose a fall frost destroys one-third of the nation’s orange crop. Which panel BEST
describes how this will affect the market for vitamin C tablets, which are a substitute in
consumption for oranges?
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
125.
(Figure: Shifts in Demand and Supply) Use Figure: Shifts in Demand and Supply. The
figure shows how supply and demand might shift in response to specific events.
Suppose the population increases. Which panel BEST describes how this will affect the
market for apples?
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
Page 29
126.
(Figure: Shifts in Demand and Supply) Use Figure: Shifts in Demand and Supply. The
graph shows how supply and demand might shift in response to specific events. Suppose
a new machine allows restaurants and fast-food outlets to produce french fries at a lower
cost. Which panel BEST describes how this will affect the market for french fries?
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
Use the following to answer questions 127-134:
127.
(Figure: Shifts in Demand and Supply II) Use Figure: Shifts in Demand and Supply II.
The graph shows how supply and demand might shift in response to specific events.
Suppose scientists discover that eating pomegranates causes aging. Which panel BEST
describes how this will affect the market for pomegranates?
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
Page 30
128.
(Figure: Shifts in Demand and Supply II) Use Figure: Shifts in Demand and Supply II.
The graph shows how supply and demand might shift in response to specific events.
Suppose a drought destroys one-third of the nation’s peanut crop. Which panel BEST
describes how this will affect the market for peanuts?
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
129.
(Figure: Shifts in Demand and Supply II) Use Figure: Shifts in Demand and Supply II.
The graph shows how supply and demand might shift in response to specific events.
Suppose a fall frost destroys one-third of the nation’s grapefruit crop. Which panel
BEST describes how this will affect the market for vitamin B12 tablets, which are a
substitute in consumption for grapefruit?
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
130.
(Figure: Shifts in Demand and Supply II) Use Figure: Shifts in Demand and Supply II.
The figure shows how supply and demand might shift in response to specific events.
Suppose the birthrate decreases. Which panel BEST describes how this will affect the
market for diapers?
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
131.
(Figure: Shifts in Demand and Supply II) Use Figure: Shifts in Demand and Supply II.
The figure shows how supply and demand might shift in response to specific events.
Suppose vast new oilfields are discovered offshore of California and gasoline prices fall.
Which panel BEST describes how this will affect the market for sport utility vehicles, a
complement in consumption to gasoline?
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
Page 31
132.
(Figure: Shifts in Demand and Supply II) Use Figure: Shifts in Demand and Supply II.
The figure shows how supply and demand might shift in response to specific events.
Suppose the technology for producing ethanol fuel improves. Which panel BEST
describes how this will affect the market for ethanol?
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
133.
(Figure: Shifts in Demand and Supply III) Use Figure: Shifts in Demand and Supply III.
The figure shows how supply and demand might shift in response to specific events.
Suppose scientists discover that eating asparagus slows the aging process. Which panel
BEST describes how this will affect the market for asparagus?
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
134.
(Figure: Shifts in Demand and Supply III) Use Figure: Shifts in Demand and Supply III.
The figure shows how supply and demand might shift in response to specific events.
Suppose a wet and sunny year increases the nation’s corn crop by 20%. Which panel
BEST describes how this will affect the market for corn?
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
Page 32
Use the following to answer questions 135-136:
135.
(Figure: Shifts in Demand and Supply III) Use Figure: Shifts in Demand and Supply III.
The figure shows how supply and demand might shift in response to specific events.
Suppose a spring frost destroys one-third of the nation’s artichoke crop. Which panel
BEST describes how this will affect the market for mayonnaise, which is a complement
to artichokes?
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
136.
(Figure: Shifts in Demand and Supply III) Use Figure: Shifts in Demand and Supply III.
The figure shows how supply and demand might shift in response to specific events.
Suppose the technology for producing snowboards improves. Which panel BEST
describes how this will affect the market for winter parkas, a complement in
consumption of snowboards?
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
Page 33
Use the following to answer questions 137-141:
137.
(Figure: Shifts in Demand and Supply IV) Use Figure: Shifts in Demand and Supply IV.
The figure shows how supply and demand might shift in response to specific events.
Suppose the Surgeon General announces that eating chocolate prevents heart disease.
Which panel BEST describes how this will affect the market for chocolate?
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
138.
(Figure: Shifts in Demand and Supply IV) Use Figure: Shifts in Demand and Supply IV.
The figure shows how supply and demand might shift in response to specific events.
Suppose the price of lumber falls dramatically. Which panel BEST describes how this
will affect the market for new houses?
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
Page 34
139.
(Figure: Shifts in Demand and Supply IV) Use Figure: Shifts in Demand and Supply IV.
The figure shows how supply and demand might shift in response to specific events.
Suppose oil becomes more expensive. Which panel BEST describes how this will affect
the market for gasoline, which is made from oil?
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
140.
(Figure: Shifts in Demand and Supply IV) Use Figure: Shifts in Demand and Supply IV.
The figure shows how supply and demand might shift in response to specific events.
Suppose half of the people in San Diego move to Colorado Springs. Which panel BEST
describes how this will affect the market for houses in Colorado Springs?
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
141.
(Figure: Shifts in Demand and Supply IV) Use Figure: Shifts in Demand and Supply IV.
The figure shows how supply and demand might shift in response to specific events.
Suppose half of the people in San Diego pack up and move to Colorado Springs. Which
panel BEST describes how this will affect the supply of houses in San Diego?
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
Use the following to answer questions 142-143:
Page 35
142.
(Figure: Supply and Demand in the Orange Juice Market) Use Figure: Supply and
Demand in the Orange Juice Market. The market is in equilibrium at point C. Suppose
most people drink orange juice only with champagne. What will be the new equilibrium
point in the orange juice market if a law banning alcohol passes?
A)
A
B)
B
C)
D
D)
E
143.
(Figure: Supply and Demand in the Orange Juice Market) Use Figure: Supply and
Demand in the Orange Juice Market. The market is in equilibrium at point C. A
reputable scientist asserts in a major scientific publication that drinking orange juice will
increase your life span. What will be the MOST likely new equilibrium point in the
orange juice market?
A)
A
B)
B
C)
D
D)
E
144.
Which factor ALWAYS results in an increase in price and quantity?
A)
an increase in supply and a decrease in demand
B)
an increase in demand with no change in supply
C)
an increase in supply with no change in demand
D)
a decrease in demand and supply
145.
The market price of airline flights increased recently. Some economists suggest that the
price increased because of an increase in the number of business travelers. They believe
that, in the market for flights:
A)
supply increased.
B)
supply decreased.
C)
demand increased.
D)
demand decreased.
146.
If tortilla chips are a normal good, when there is an increase in income, equilibrium
price _____ and equilibrium quantity _____.
A)
decreases; increases.
B)
decreases; decreases.
C)
increases; increases.
D)
increases; decreases.
Page 36
147.
In the market for tacos, a normal good, you observe that the equilibrium price and
quantity have increased. This can be caused only by:
A)
an increase in the price of beef.
B)
an increase in the wages of taco shop workers.
C)
fewer taco shops.
D)
an increase in the incomes of people who eat tacos.
148.
Suppose you manage a corner grocery store. If peanut butter is an inferior good, what do
you suppose would happen to the price and quantity sold of peanut butter as incomes
fell during a recession?
A)
The price would increase and the quantity would decrease.
B)
The price and quantity would both increase.
C)
The price and quantity would both decrease.
D)
The price would decrease and the quantity would increase.
149.
A newspaper story recently reported that the price of new cars, a normal good, has
decreased and the quantity of new cars sold has dropped. The new price and quantity
could have been caused by a(n):
A)
decrease in buyers’ incomes.
B)
increase in buyers’ incomes.
C)
increase in production costs.
D)
decrease in production costs.
150.
If supply is upward sloping, a shift of a demand curve to the right, all other things
unchanged, will:
A)
increase equilibrium price and quantity.
B)
decrease equilibrium price and quantity.
C)
decrease equilibrium quantity and increase equilibrium price.
D)
increase equilibrium quantity and decrease equilibrium price.
151.
For consumers, pizza and hamburgers are substitutes. A rise in the price of a pizza
causes a _____ in the equilibrium price of a hamburger and a(n) _____ in the
equilibrium quantity of hamburgers.
A)
rise; increase
B)
rise; decrease
C)
fall; increase
D)
fall; decrease
Page 37
152.
If the economy booms and peoples’ incomes rise, then the demand curve for a normal
good like new houses will _____ and the equilibrium quantity of new houses produced
will _____.
A)
shift to the right; increase
B)
not shift; not change
C)
not shift; increase
D)
shift to the left; decrease
153.
A new wonder diet that results in a dramatic weight loss sweeps through the United
States. The key to the diet is to eat large amounts of red meat (beef) but no poultry or
carbohydrate-rich foods. As millions of Americans switch to the new diet, we can
expect a(n) _____ in the _____ beef, leading to a shift to the _____ in the _____ curve
for beef and _____ beef prices.
A)
increase; demand for; right; demand; higher
B)
increase; demand for; right; demand; lower
C)
decrease; supply of; left; supply; higher
D)
decrease; demand for; left; demand; higher
154.
A new wonder diet that results in a dramatic weight loss sweeps through the United
States. The key to the diet is to eat large amounts of red meat (beef) but no poultry or
carbohydrate-rich foods. As millions of Americans switch to the new diet, we can
expect a(n) _____ in the _____ poultry, leading to a shift to the _____ in the _____
curve for poultry and _____ poultry prices.
A)
decrease; supply of; left; supply; higher
B)
increase; supply of; right; supply; higher
C)
decrease; demand for; right; demand; lower
D)
decrease; demand for; left; demand; lower
155.
Consider two competing motorcycle manufacturers, Harley-Davidson and Honda. If
Harley-Davidson raises the price of its motorcycles, we can expect:
A)
a shift to the right in the supply curve of Hondas and lower prices for Hondas.
B)
a shift to the left in the supply curve of Hondas and higher prices for Hondas.
C)
a shift to the right in the demand curve for Hondas and higher prices for Hondas.
D)
a shift to the left in the demand curve for Hondas and lower prices for Hondas.
156.
If supply is upward sloping, an increase in demand with no change in supply will lead to
a(n) _____ in equilibrium quantity and a(n) _____ in equilibrium price.
A)
increase; increase
B)
increase; decrease
C)
decrease; increase
D)
decrease; decrease
Page 38
157.
French fries and hamburgers are complements in consumption. Suppose the cost of the
ingredients used to make hamburgers rises, so that the price of a hamburger rises. Then
the equilibrium price of french fries _____ and the equilibrium quantity _____.
A)
rises; increases
B)
rises; decreases
C)
falls; increases
D)
falls; decreases
158.
If supply is upward sloping, a decrease in demand with no change in supply will lead to
a(n) _____ in equilibrium quantity and a(n) _____ in equilibrium price.
A)
increase; increase
B)
increase; decrease
C)
decrease; increase
D)
decrease; decrease
159.
Given a supply curve that is positively sloped and a demand curve for a normal good
that is negatively sloped, an increase in income will result in:
A)
an increase in equilibrium price and quantity.
B)
a decrease in equilibrium price and an increase in equilibrium quantity.
C)
a decrease in both equilibrium price and quantity.
D)
an increase in equilibrium price and a decrease in equilibrium quantity.
160.
If supply is upward sloping, an increase in demand, all other things unchanged, will
result in a(n) _____ in equilibrium price and a(n) _____ in equilibrium quantity.
A)
increase; increase
B)
decrease; decrease
C)
decrease; increase
D)
increase; decrease
161.
If demand is downward sloping, a decrease in supply with no change in demand will
lead to a(n) _____ in equilibrium quantity and a(n) _____ in equilibrium price.
A)
increase; increase
B)
increase; decrease
C)
decrease; increase
D)
decrease; decrease
Page 39
162.
If demand is downward sloping, an increase in supply with no change in demand will
lead to a(n) _____ in equilibrium quantity and a(n) _____ in equilibrium price.
A)
increase; increase
B)
increase; decrease
C)
decrease; increase
D)
decrease; decrease
163.
You notice that the price of Blu-ray players falls and the quantity of Blu-ray players
sold increases. This set of observations can be the result of the _____ Blu-ray players
shifting to the _____.
A)
demand for; right
B)
demand for; left
C)
supply of; right
D)
supply of; left
164.
In the market for corn tortilla chips, what would cause a price increase?
A)
Doctors tell their patients that tortilla chips are unhealthy.
B)
There is a technological advance in tortilla chip production.
C)
A fungus kills much of the corn crop in Nebraska.
D)
The price of salsa triples.
165.
The market price of airline flights increased recently. Some economists suggest that the
price increased because several airlines went out of business. They believe that, in the
market for flights:
A)
supply increased.
B)
supply decreased.
C)
demand increased.
D)
demand decreased.
166.
The market price of airline flights increased recently. Some economists suggest that the
price increased because jet fuel is much more expensive than before. As a result, they
believe that, in the market for flights:
A)
supply increased.
B)
supply decreased.
C)
demand increased.
D)
demand decreased.
Page 40
167.
In the market for grass-fed beef, what would cause a price increase?
A)
The price of chicken decreases.
B)
Doctors tell patients that beef is full of saturated fat that causes heart attacks.
C)
The prices of grass and corn increase.
D)
There is a movement in the United States toward vegetarianism.
168.
The market for corn is in equilibrium. Which factor is most likely to INCREASE the
equilibrium price of corn?
A)
a bountiful harvest
B)
increasing production of corn-based ethanol
C)
decreasing household incomes, with corn being a normal good
D)
a decrease in the price of wheat, a substitute in consumption
169.
The market for lemonade is in equilibrium and the price of lemons rises. In the
lemonade market _____ will _____, _____ the price and _____ the quantity.
A)
demand; decrease; decreasing; decreasing
B)
demand; decrease; increasing; decreasing
C)
supply; increase; decreasing; increasing
D)
supply; decrease; increasing; decreasing
170.
Suppose the input costs associated with manufacturing hair replacement treatments
decrease over time. This would lead to a(n):
A)
increase in the supply of such treatments, lower prices, and an increase in the
equilibrium quantity.
B)
decrease in quantity supplied and lower prices.
C)
increase in demand and higher prices.
D)
decrease in the supply of such treatments, higher prices, and a decrease in the
equilibrium quantity.
171.
The price of microchips used to produce computers falls. As a result, the equilibrium
price of computers _____ and the equilibrium quantity _____.
A)
rises; increases
B)
rises; decreases
C)
falls; decreases
D)
falls; increases