145)
With reference to the difference between a change in demand and a change in quantity demanded,
which of the following is TRUE?
145)
A)
If demand increases, then the demand curve will shift to the left.
B)
If a good’s price goes down, then demand for the good will decrease.
C)
If price rises and quantity demanded decreases, then the demand curve will shift to the left.
D)
If a good’s price goes down, then quantity demanded will increase.
146)
A significant increase in the price of tennis balls will most likely lead to
146)
A)
an increase in the demand for tennis racquets.
B)
an inward shift in the demand for tennis racquets.
C)
a movement along the demand curve for tennis racquets.
D)
an inward shift in the demand for tennis balls.
147)
Mary increases her consumption of Good X after the price of Good Y decreased. For Mary
147)
A)
B)
C)
D)
148)
Suppose that today, consumers expect the price of a gallon of gasoline to double in the future. Then
today the gasoline
148)
A)
B)
C)
D)
149)
A demand schedule
149)
A)
B)
C)
D)
150)
Each of the following would cause an increase in the supply of baseballs EXCEPT
150)
A)
an expectation that the price of baseballs will rise in the future.
B)
an increase in the number of baseball producers.
C)
a decrease in the cost of labor used to produce baseballs.
D)
an improvement in technology.
151)
Market supply is obtained by
151)
A)
summing the amount supplied by individual producers at various prices.
B)
observing how the supply curve shifts.
C)
the law of supply.
D)
summing the amount demanded by individual consumers at various prices.
Explanation:
152)
The price of a new car is $40,000 while the price of a five–year old car of the same brand is $16,000.
The next year the price of the new car increases to $44,000 and the price of a five–year old car of the
same brand is $17,600. The relative price of the used car
152)
A)
B)
C)
D)
Explanation:
153)
Sugar is an input used to produce cereal. Suppose that the price of sugar rises. As a result
153)
A)
the supply curve for sugar will shift to the left.
B)
the supply curve for sugar will shift to the right.
C)
the supply curve for cereal will shift to the left.
D)
the supply curve for cereal will shift to the right.
Explanation:
Explanation:
Price per Quantity of Quantity of
Constant X Demanded X Supplied
Quality of X per Time Period per Time Period
$10 0150
820 120
640 90
4 60 60
280 30
0100 0
154)
According to the above table, at a price of $8 per unit, other things constant
154)
A)
consumers will continue to bid prices upward.
B)
a shortage of 80 units will exist.
C)
there will be no tendency for the market to approach an equilibrium.
D)
a surplus of 100 units will exist.
155)
Which one of the following would cause a rightward shift in the demand curve of digital cameras?
155)
A)
Production methods are modified to make production of digital cameras more efficient.
B)
The price of digital cameras decreases.
C)
Digital cameras become easier to use.
D)
Government regulations are imposed to limit the number of digital cameras imported.
C
156)
Which of the following statements is consistent with an increase in supply?
156)
A)
B)
C)
D)
C
157)
A market requires
157)
A)
B)
C)
D)
C
D
158)
Which of the following will cause a movement along the demand curve for shoes?
158)
A)
B)
C)
D)
159)
Any improvement in overall production technology that permits more output to be produced with
the same level of inputs causes
159)
A)
no movement of the supply curve, but a fall in price and a decrease in quantity supplied.
B)
a movement up the supply curve resulting in both a higher equilibrium price and quantity.
C)
a leftward shift of the supply curve so that less is offered for sale at each price.
D)
a rightward shift of the supply curve so that more is offered at each price.
160)
Kariuki decreases his consumption of grapes after his income goes up. For Kariuki
160)
A)
grapes and income are complementary goods.
B)
grapes are an inferior good.
C)
grapes are a superior good.
D)
grapes and income are substitute goods.
161)
The absolute price of a good is its
161)
A)
B)
C)
D)
162)
If more foreign auto plants relocate to the United States, we would expect
162)
A)
that U.S. auto demand might change, but U.S. auto supply would remain static.
B)
the U.S. supply curve for automobiles would shift to the left.
C)
the U.S. supply curve for automobiles to shift to the right.
D)
that the U.S. auto market would not respond.
Price per Quantity of Quantity of
Constant X Demanded X Supplied
Quality of X per Time Period per Time Period
$10 0150
820 120
640 90
4 60 60
280 30
0100 0
163)
Given the market data for good X in the above table, an equilibrium quantity is established at
163)
A)
120 units.
B)
30 units.
C)
90 units.
D)
60 units.
164)
The relative price of a textbook is
164)
A)
the amount it cost to make the textbook.
B)
the money price of the textbook divided by the money price of some other good.
C)
what the author earned for writing the textbook.
D)
the price of the textbook compared with what students think it should cost.
165)
Refer to the above figure. At a price of four cents, a(n) ________ of bubble gum will exist in the
market.
165)
A)
B)
C)
D)
166)
Which of the following causes a movement along a supply curve?
166)
A)
B)
C)
D)
167)
The price of one product in terms of another commodity is called its
167)
A)
financial price.
B)
converse price.
C)
relative price.
D)
money price.
168)
An increase in the price of corn will lead to
168)
A)
an upward (and leftward) movement along the demand curve for corn.
B)
a rightward shift in the supply curve for corn.
C)
an increase in the quantity of corn consumed.
D)
a leftward shift in the demand curve for corn.
169)
If an increase in the incomes of people who live in the Los Angeles area leads to an increase in the
demand for season tickets for games played by the Los Angeles Lakers professional basketball
team, then these season tickets are
169)
A)
B)
C)
D)
170)
Gasoline prices in the United States decreased significantly between 2008 and 2009. A decrease in
the price of gasoline, holding other things constant, will cause which of the following to occur?
170)
A)
decrease the demand for gasoline.
B)
increase the quantity of gasoline demanded.
C)
decrease the quantity of gasoline demanded.
D)
increase the demand for gasoline.
171)
If the price of oil rises, producers of oil will
171)
A)
supply less oil.
B)
leave the amount of oil supplied unchanged.
C)
cut the price.
D)
increase the quantity of oil supplied.
172)
If goods X and Y are substitute goods, then an increase in the price of Y, other things being equal,
172)
A)
results in a decrease in the quantity of Y consumed, but increases the demand for X.
B)
decreases the quantity demanded of Y, but has no effect on the amount of X consumed.
C)
has no real effect on the quantity demanded of good Y, but increases the demand for X.
D)
results in a decrease in the amounts of both X and Y consumed.
173)
Suppose Good A is a normal good. Which of the following will increase the demand for Good A?
173)
A)
an increase in the price of its substitutes
B)
an increase in the price of its complements
C)
a decrease in income
D)
a lower expected future relative price of A
174)
Which of the following is NOT a non–price determinant of demand?
174)
A)
B)
C)
D)
175)
Jane has noticed that she used to pay $2 for coffee and now she pays $2.50. Which of the following
statements is TRUE?
175)
A)
Jane will stop consuming coffee.
B)
The law of supply explains why the price of coffee has increased.
C)
The relative price of coffee has increased compared to tea.
D)
The money price of coffee has increased.
176)
Suppose that because of unseasonably cold weather in Florida, a significant portion of the orange
crop has been lost to freezing temperatures. This statement means that
176)
A)
the demand for oranges will rise.
B)
the price of oranges will fall.
C)
the equilibrium quantity of oranges will rise.
D)
the amount of oranges available at various prices will decline.
D
177)
If a demand curve shifts, we know that
177)
A)
the price of the good and supply are the major factors.
B)
the price of the good itself is a factor.
C)
the price of the good itself is not a factor.
D)
the price of the good and demand are major factors.
C
178)
Which of the following is an example of the law of demand?
178)
A)
A decrease in the price of milk is followed by a decrease in milk purchases.
B)
The amount of milk purchased increases when the price is constant.
C)
A decrease in the price of milk is followed by an increase in milk purchases.
D)
An increase in the price of milk has no effect on the amount of milk purchased.
C
D
179)
Suppose an individual experiences a permanent increase in income. As a result of this increased
income, further assume that the individual eats dinner at restaurants more frequently each month.
This information suggests that dinners at restaurants for this individual are
179)
A)
B)
C)
D)
180)
Suppose that the demand curve for apples is downward sloping and the price per bushel increases
from $6.50 to $7.50. We would then expect
180)
A)
the demand for apples to decrease.
B)
the quantity of apples demanded to fall.
C)
the quantity of apples demanded to increase.
D)
the demand curve to shift toward the origin.
Explanation:
181)
When a shortage exists in a market
181)
A)
the quantity supplied is greater than the quantity demanded at the current price.
B)
the market clearing price is above equilibrium and market forces will cause the price to fall.
C)
the current price is below the market clearing price and the price will rise.
D)
the quantity demanded is less than the quantity supplied at the existing price.
Explanation:
182)
An increase in demand is shown graphically by
182)
A)
B)
C)
D)
Explanation:
Explanation:
183)
The market supply curve is found by
183)
A)
plotting the supply curves of individual firms.
B)
plotting the supply curves of individual consumers.
C)
plotting and summing up the supply curves of individual firms.
D)
taking the supply curve of the representative firm.
184)
Pam graduates from law school and gets a position in a law firm. At the same time the price of
hamburger falls while other food prices have stayed the same. She notices that she buys less
hamburger than she did before. Is she violating the law of demand?
184)
A)
Yes, since she is buying less hamburger at a lower price.
B)
No, since other things are not held constant, such as her income.
C)
No, since the law of demand refers to relative price changes and the price of hamburger
falling is an absolute price change.
D)
Yes, since she is buying less hamburger in a relatively short period of time and we wouldn’t
expect her tastes to have changed.
185)
Refer to the above figure. Excess quantity supplied will exist when
185)
A)
B)
C)
D)
186)
Refer to the above figure. The market clearing price is
186)
A)
$2.
B)
$6.
C)
$8.
D)
$10.
187)
An increase in the relative price of a good cannot be caused by
187)
A)
a decrease in the nominal price of the good that is less than the decrease in the nominal price
of the other good.
B)
an increase in the nominal price of the other good while the price of the good itself remains
constant.
C)
a decrease in the nominal price of the other good while the price of the good itself remains
constant.
D)
an increase in the nominal price of the good that is greater than the increase in the nominal
price of the other good.
188)
Graphically, the market supply curve is obtained by
188)
A)
a change in quantity supplied.
B)
vertically summing quantity supplied at various prices for individual producers.
C)
horizontally summing quantity supplied at various prices for individual producers.
D)
changing the ceteris paribus conditions.
189)
Another name for a shortage is
189)
A)
B)
C)
D)
190)
Mary decreases her consumption of Good X after the price of Good Y decreased. For Mary
190)
A)
B)
C)
D)
191)
A schedule of how much of a good people will purchase for a range of possible prices during a
specified time period, other things constant, is the definition of
191)
A)
B)
C)
D)
192)
A per–unit government subsidy to producers of a good tends to
192)
A)
B)
C)
D)
193)
The demand for orthodontists’ services falls as the proportion of the population that obtains braces
falls. It may take several years before the new long–run equilibrium for the orthodontic labor
market is attained. In the meantime, the orthodontic labor market experiences a
193)
A)
B)
C)
D)
194)
The alternative quantities demanded for a given time period at different possible prices is known
as
194)
A)
B)
C)
D)
195)
Refer to the above figure. Which panel demonstrates the law of supply?
195)
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
196)
A surplus exists
196)
A)
in equilibrium.
B)
at the market clearing price.
C)
when quantity supplied is greater than quantity demanded.
D)
when quantity supplied is less that quantity demanded.
197)
Graphically, a market demand curve is found by
197)
A)
summing the prices each consumer would pay for each quantity.
B)
taking the average of the individual demand curves.
C)
taking the average of all prices that people are willing to pay.
D)
summing the quantities demanded by all individuals at each price.
198)
Which one of the following would cause an increase in the supply of cardboard?
198)
A)
an increase in the price of cardboard
B)
a decrease in the demand for cardboard
C)
an improvement in the technology used to produce cardboard
D)
an increase in taxes applied to cardboard producers
199)
A demand schedule provides
199)
A)
the quantities of a good people are willing to sell every year.
B)
the amount of a good a person wants at different times of the day.
C)
the amount of a good a person wants to sell during a given time period.
D)
the alternative quantities demanded for a given time period at different possible prices.
D
200)
If the price of butter increases, the demand for margarine
200)
A)
B)
C)
D)
D
201)
The price of a first–class stamp in 1957 was 3 cents, and it is 49 cents in 2014. From this we know
that
201)
A)
both the relative and the absolute price of first–class stamps increased from 1957 to 2014.
B)
the money price of first–class stamps increased from 1957 to 2014, but we can’t tell if the
relative price of first–class stamps increased or decreased without more information.
C)
the money price of first–class stamps increased from 1957 to 2014 and the relative price of
first–class stamps decreased.
D)
the money price of first–class stamps increased from 1957 to 2014 but the absolute price of
first–class stamps stayed constant.
B
C
202)
In economics, the meaning of demand refers to
202)
A)
the quantities of a good that people will sell at various prices.
B)
how badly someone wants a good.
C)
the total satisfaction that consuming a good provides people at different prices.
D)
the quantities of a good that people will buy at various prices.
203)
Last year there were 6 pizza shops in town. This year there are only 4. Other things being equal, the
decrease in the number of suppliers will
203)
A)
have no impact on market supply as long as the demand for pizza remains strong.
B)
cause a decrease in the quantity supplied at each price.
C)
cause the market supply curve to shift to the right.
D)
increase the market demand for pizza.
B
204)
The price that we observe in the market is
204)
A)
B)
C)
D)
A
205)
When a shortage exists
205)
A)
quantity demanded exceeds quantity supplied.
B)
the price is below the market clearing price.
C)
an excess quantity demanded exists.
D)
all of the above
D
206)
A demand curve is derived from
206)
A)
B)
C)
D)
A
D
207)
In the above figure, what would result if the price was $40?
207)
A)
excess demand
B)
a shortage
C)
equilibrium
D)
a surplus
208)
A decrease in quantity demanded of a good is caused by
208)
A)
B)
C)
D)
209)
The price of a gallon of gasoline increased from $2.00 to $2.25 while the price of a ride on the city
bus increased from 50 cents to 75 cents. The relative price of riding the city bus
209)
A)
B)
C)
D)
210)
All of the following are non–price determinants of demand EXCEPT
210)
A)
price of related goods.
B)
number of consumers.
C)
price of raw materials used in production of the good.
D)
income.
211)
Which of the following statements is FALSE about the demand curve?
211)
A)
A change in demand is graphically shown by shifting the entire demand curve.
B)
An increase in demand shifts the demand curve to the left, closer to the price axis.
C)
When only the price of a good changes, there is movement along the demand curve but no
change in demand.
D)
When demand decreases, there is a drop in the quantity demanded at each price.
212)
Refer to the above figure. A shortage will exist when
212)
A)
B)
C)
D)
213)
Demand is a schedule that shows
213)
A)
the relationship between the cost of producing a good and the price that sellers will charge.
B)
how much income it takes to afford various quantities of a good.
C)
how population changes will affect the amount of a good that is needed.
D)
a set of possible prices for a good and the quantities of the good that will be purchased at each
of those prices.
214)
Refer to the above figure. At a price of $2, excess quantity demanded equals
214)
A)
3.
B)
0.
C)
12.
D)
15.
215)
A movement along a demand curve is
215)
A)
a change in the quantity demanded and is caused by a change in the price of the good.
B)
a change in demand and is caused by a change in the price of the good.
C)
a change in demand and can be caused by a change in consumers’ income.
D)
a change in the quantity demanded and can be caused by a change in consumers’ income.
216)
In any given market, prices are determined by
216)
A)
B)
C)
D)
217)
The price of a new textbook increases from $120 to $160, while the price of used copies of the
textbook increased from $80 to $100. Other things being equal, we would expect
217)
A)
the quantity demanded of the used textbook to decrease and the quantity demanded of the
new textbook to increase.
B)
the quantity demanded of both to fall.
C)
the demand for the new textbook to increase and the demand for the used textbook to
decrease.
D)
the quantity demanded of the used textbook to increase and the quantity demanded of the
new textbook to decrease.
218)
Refer to the above figure. The highest price that consumers would be willing to pay for quantity Q2
is
218)
A)
B)
C)
D)
219)
Which of the following would cause a change in the quantity demanded of a product?
219)
A)
B)
C)
D)
220)
Markets are
220)
A)
places where people can inspect goods and services carefully.
B)
specific geographic locations.
C)
a mechanism through which prices of goods and services are determined by the forces of
supply and demand.
D)
hypothetical constructs used to analyze how people form their tastes and preferences.
221)
Refer to the above figure. Moving from point A to point B indicates
221)
A)
B)
C)
D)
222)
An increase in the number of consumers in a market would cause
222)
A)
B)
C)
D)
223)
All of the following will affect the position of the demand curve EXCEPT
223)
A)
income.
B)
changes in expectations of future relative prices.
C)
taste and preference.
D)
prices of resources used to produce the product.