224)
A shift in demand occurs when
224)
A)
the amount demanded of a good changes at each existing price.
B)
the price of that good changes.
C)
the price changes and the good is a normal good.
D)
there is a change in quantity demanded.
225)
Suppose a college increases the wages paid to student employees. Which of the following options is
the best description of the most likely effect of the increase in wage earnings on the demand curve
for school sweatshirts in the bookstore?
225)
A)
The demand curve shifts to the left.
B)
a leftward movement along the demand curve
C)
The demand curve shifts to the right.
D)
a rightward movement along the demand curve
226)
Fashion trends are a nonprice determinant for demand because
226)
A)
they do not affect demand.
B)
they change the supply of accessories.
C)
they cause a movement along the demand curve.
D)
they influence people’s tastes and preferences in clothing.
227)
In deriving the demand schedule for a good, economists assume that
227)
A)
reported income changes at each point on the demand schedule.
B)
all other influences on demand except the product price are held constant.
C)
a consumer will allocate all of her income to one good.
D)
consumers have equal incomes to allocate among goods.
228)
Which of the following statements is FALSE?
228)
A)
If the price of a good rises, quantity demanded of the good decreases and the demand curve
shifts toward the origin as long as supply is static.
B)
If there is an increase in the demand for a product, consumers want to buy more of the
product at each and every possible price.
C)
A decrease in demand shifts the demand curve leftward toward the origin, while a decrease
in quantity demanded involves a movement upward along a particular demand curve.
D)
A change in the demand for a product is caused by factors other than changes in the product’s
price.
229)
The law of demand includes the statement “other things being equal.” These other things include all
of the following EXCEPT
229)
A)
the number of potential buyers.
B)
consumers’ tastes and preferences.
C)
consumers’ income.
D)
the price of that good in the law of demand.
D
230)
A direct or positive relationship between price and quantity supplied is
230)
A)
a supply curve.
B)
a demand curve.
C)
a change in demand.
D)
the market clearing price.
A
231)
When there is a shortage
I. there is a tendency for price to increase.
II. there is an excess quantity demanded.
231)
A)
I only
B)
II only
C)
Both I and II
D)
Neither I nor II
C
A
232)
Which factor would cause a movement along the demand curve for pizza?
232)
A)
a drop in the price of pizza
B)
an increase in the number of students in town
C)
a renewed preference for Italian food
D)
an increase in average income
233)
The Chunnel auto tunnel allows motorists to travel between England and France. As an alternative,
there is ferry service across the English Channel. What would happen in the market for ferry
service if fees for using the Chunnel were increased?
233)
A)
There would be a downward movement along the demand curve for transits through the
Chunnel.
B)
The demand for ferry service would decrease.
C)
There would be an upward movement along the demand curve for transits through the
Chunnel.
D)
The demand for ferry service would increase.
D
234)
Which of the following would cause an increase in the market supply of mountain bikes?
234)
A)
an increase in the cost of components used to assemble mountain bikes
B)
an increase in taxes levied on mountain bike manufacturers
C)
an increase in the number of firms making mountain bikes
D)
a decrease in the demand for mountain bikes
C
235)
For a demand schedule, which of the following is held constant?
235)
A)
nominal prices
B)
relative prices
C)
quantity demanded
D)
quality of the good
D
A
236)
What happens as the result of a shortage?
236)
A)
Consumers begin to view the good as an inferior good because they have a hard time finding
it.
B)
There is downward pressure on prices.
C)
There is upward pressure on prices.
D)
Supply of the good decreases.
237)
In the above figure, the demand curve for Good A shifts from D1 to D2 in Graph A when the price
of Good B changes from P1 to P2 in Graph B. We can conclude that
237)
A)
Good A and Good B are complements.
B)
Good A is a normal good but Good B is an inferior good.
C)
Good A and Good B are unrelated.
D)
Good A and Good B are substitutes.
238)
Which one of the following would cause an increase in the demand for hotel rooms in Hawaii?
238)
A)
a decrease in airfares to Hawaii
B)
an upward movement along the demand curve for stays in Hawaiian hotel rooms
C)
an increase in airfares to Hawaii
D)
a downward movement along the demand curve for stays in Hawaiian hotel rooms
239)
We are given the individual demand curves for all of the people that consume Good Y. Which
statement is TRUE about the market demand curve for Good Y?
239)
A)
The market demand curve is obtained by vertically summing the individual demand curves.
B)
The market demand curve cannot be obtained from individual demand curves.
C)
The market demand curve is obtained by horizontally summing the individual demand
curves.
D)
The market demand curve cannot be obtained because information on prices is missing.
240)
Which of the following is a likely result of the dramatic decrease in the price of microprocessor
chips to computer manufacturers in the last two decades?
240)
A)
a decrease in the supply of diskettes
B)
an increase in the supply of computers
C)
an increase in the demand for computers
D)
an increase in the quantity supplied of computers
B
241)
Which of the following will NOT cause a shift in the demand for rewriteable DVDs?
241)
A)
a change in the price of rewriteable DVDs
B)
a change in taste
C)
a change in the price of rewriteable CDs
D)
a change in income
A
242)
Which of the following will cause a movement along the supply curve for oil?
242)
A)
an increase in the number of oil–producing firms
B)
new technology to drill oil underwater in the Gulf of Mexico
C)
a change in the price of oil
D)
government subsidies to oil producers in Wyoming
C
C
243)
Market demand is
243)
A)
total equilibrium demand for the market.
B)
the demand for and supply of a good or service.
C)
the total quantities demanded of all consumers of a particular item at given prices.
D)
a movement along the demand curve in response to the market.
244)
Which of the following will shift the supply curve for laptop computers to the left?
244)
A)
a subsidy to the laptop computer industry
B)
development of a cheaper microchip used in laptop computer production
C)
a reduction of the number of firms that make laptop computers
D)
expectations of a future decline in laptop computer prices
C
245)
When the price of tablets goes up and fewer tablets are purchased, this is representative of the
245)
A)
law of market operations.
B)
law of increasing costs.
C)
law of demand.
D)
law of supply.
C
246)
The relationship between quantity supplied and price is usually
246)
A)
a negative relationship.
B)
an inverse relationship.
C)
a direct relationship.
D)
impossible to determine.
C
247)
The law of supply implies that the supply curve is
247)
A)
flat.
B)
vertical.
C)
downward sloping.
D)
upward sloping.
D
C
248)
Other things being equal, an increase in the price of a good leads to an increase in the amount
produced. This is known as
248)
A)
equilibrium.
B)
the law of demand.
C)
the law of supply.
D)
ceteris paribus.
249)
There is an increase in the demand for cream when the price of coffee falls. Other things constant,
we can conclude that coffee and cream are
249)
A)
complementary goods.
B)
independent goods.
C)
inferior goods.
D)
substitute goods.
A
250)
The law of demand tells us that people will buy more of a good if
250)
A)
every factor that can affect people’s buying decisions changes.
B)
the prices of other goods decrease.
C)
the price of that good decreases.
D)
people’s income increases.
C
251)
John believes that when the price of a good increases people will purchase more of the good. This
statement is
251)
A)
consistent with the law of supply.
B)
inconsistent with the law of demand.
C)
consistent with the law of demand.
D)
referring to money prices.
B
252)
If the price of a product increases, we would expect
252)
A)
quantity supplied to increase.
B)
the level of supply to increase.
C)
an increase in quantity demanded.
D)
the level of demand to decrease.
A
C
253)
Refer to the above figure. At a price of $6, excess quantity supplied equals
253)
A)
12.
B)
15.
C)
0.
D)
infinity.
254)
Refer to the above figure. The arrows show the direction of a shift in the demand curve of Good A.
Which of the following would be the most likely reason for the shift in the demand curve if Good A
is an inferior good?
254)
A)
an increase in consumers’ income
B)
a decrease in the price of Good A
C)
a decrease in consumers’ income
D)
an increase in the price of Good A
255)
A change in any of the ceteris paribus conditions for demand leads to a
255)
A)
shift of the demand curve.
B)
a good going from an inferior good to a normal good.
C)
movement along the demand curve.
D)
change in supply.
256)
Refer to the above figure. Which diagram shows the effect on the market of Corn Flakes when the
price of Corn Flakes has increased?
256)
A)
graph C
B)
graph D
C)
neither graph
D)
both graphs
257)
An increase in the price of input used to produce a product will lead to
257)
A)
a decrease in the demand for that product.
B)
a decrease in the supply of that product.
C)
a decrease in quantity supplied of that product
D)
an increase in the supply of that product.
258)
Refer to the above table. What is the market quantity demanded at a price of $8?
258)
A)
15
B)
5
C)
35
D)
44
259)
At the market clearing price
259)
A)
the supply and demand curves intersect.
B)
quantity supplied equals quantity demanded.
C)
there is neither a shortage nor a surplus.
D)
all of the above are correct.
260)
In the above figure, an increase in income is best demonstrated by a
260)
A)
shift of D1 to D2 in Graph A, if good A is a normal good.
B)
movement along D0 from P2 to P1 in Graph B.
C)
shift of D2 to D1 in Graph A, if good A is a normal good.
D)
movement along D0 from P1 to P2 in Graph B.
A
261)
Which one of the following statements is FALSE?
261)
A)
In order to entice producers to offer more of a product on the market for sale, product price
must rise.
B)
There is some price at which quantity supplied of a product is zero.
C)
As product price increases, producers are willing to put more of the good on the market for
sale.
D)
There is an inverse (negative) relationship between product price and quantity supplied.
D
D
262)
Adding the quantities demanded by all consumers at every price will yield
262)
A)
the market–clearing price.
B)
the total substitution effect from a price change.
C)
the market demand curve.
D)
the number of consumers.
263)
A shift in the demand curve to the right represents
263)
A)
an increase in demand.
B)
a decrease in quantity demanded.
C)
an increase in quantity demanded.
D)
a decrease in demand.
264)
Refer to the above figure. The rightward shift of the curve indicates
264)
A)
a change in quantity demanded.
B)
a change in quantity supplied.
C)
an increase in demand.
D)
an increase in supply.
265)
If we are comparing the price of regular gasoline with the price of super gasoline, then an increase
in the relative price of regular gasoline implies that
265)
A)
the relative price of super gasoline decreased.
B)
the nominal price of regular gasoline increased.
C)
the nominal price of super gasoline decreased.
D)
the relative price of regular gasoline increased.
266)
The supply curve has a
266)
A)
undefined slope.
B)
negative slope.
C)
positive slope.
D)
slope equal to –1.
267)
The relationship between a change in the price of a complementary good and demand for another
complementary good is
267)
A)
negative.
B)
inconclusive.
C)
positive.
D)
zero.
268)
Refer to the above figure for the market of Cheerios. Which diagram depicts the effect of an
increase in the price of Cheerios?
268)
A)
A
B)
B
C)
neither graph
D)
both graphs
269)
Suppose all prices increase by 10 percent in the year while the total sales of HDTVs remain
constant. This is
269)
A)
not a violation of the law of demand since the law of demand does not apply to expensive
goods like HDTVs.
B)
a violation of the law of demand since more HDTVs should have been purchased with higher
incomes.
C)
not a violation of the law of demand since the relative price of HDTVs did not change.
D)
a violation of the law of demand since fewer HDTVs should be purchased at a higher price.
270)
Suppose we observe that the demand for eggs increases when people buy more potatoes. We can
conclude that eggs and potatoes are
270)
A)
normal goods.
B)
substitutes.
C)
complements.
D)
inferior goods.
C
271)
What situation gives rise to a surplus?
271)
A)
Supply of the good decreases, but the market price is not permitted to change.
B)
The current price of the good is above its market clearing price.
C)
The market clearing price of the good is too high.
D)
The current price of the good is below its market clearing price.
B
272)
When there is an excess quantity supplied
272)
A)
quantity demanded is greater than quantity supplied.
B)
prices will remain stable.
C)
the market is in equilibrium.
D)
quantity demanded is less than quantity supplied.
D
C
273)
Which of the following will NOT cause a rightward shift in the supply curve?
273)
A)
a reduction in resource costs
B)
an improvement in technology
C)
a reduction in the expected future price
D)
none of the above
274)
A change in the ceteris paribus conditions for supply will lead to a
274)
A)
change in supply.
B)
change in quantity supplied.
C)
change in how consumers view the quality of the good.
D)
change in quantity supplied and a change in supply.
275)
Refer to the above figure. A movement from point A to point B for a good is most likely a result of
275)
A)
an expectation of a decrease in the relative price of that good.
B)
a decrease in the price of that good.
C)
an increase in the price of that good.
D)
an expectation of an increase in the relative price of that good.
276)
If there is a shortage in a free market, then
276)
A)
consumers will offer to pay a lower price for the good, and the price will fall toward the
equilibrium level.
B)
suppliers will accept any price below equilibrium.
C)
suppliers will decrease their output to match demand.
D)
consumers will offer to pay a higher price for the good, and the price will rise toward the
equilibrium level.
277)
A shortage exists
277)
A)
in equilibrium.
B)
at the market clearing price.
C)
when quantity supplied is greater than quantity demanded.
D)
when quantity supplied is less than quantity demanded.
278)
Refer to the above table. The equilibrium price of tablets is
278)
A)
$500.
B)
$550.
C)
$650.
D)
$700.
279)
Demand is defined as
279)
A)
a specific quantity of a good or service that people will purchase at one particular price of
another item during a specified time period, other things being constant.
B)
a specific quantity of an item that people want at a particular price of that item during a
specified time period, other things being constant.
C)
a schedule of how much of an item people will purchase at any particular price of that item
during a specified time period, other things being constant.
D)
a schedule of how much of a good or service people will purchase at any particular price of a
different item during the specified time period, other things being constant.
280)
If the price of margarine falls, the demand for butter will
280)
A)
remain unchanged.
B)
rise at first and then fall.
C)
increase.
D)
decrease.
281)
Refer to the above table. At a price of $450, there is an
281)
A)
equilibrium.
B)
excess quantity demanded of 9,000 tablets.
C)
excess quantity supplied of 4,000 tablets.
D)
excess quantity demanded of 6,000 tablets.
282)
Refer to the above figure. Corn is an input for producing Corn Flakes. Which diagram shows the
effect on the supply of Corn Flakes when the price of corn has increased?
282)
A)
graph C
B)
graph D
C)
neither graph
D)
both graphs
283)
All of the following cause a shift in the demand curve EXCEPT a change in the
283)
A)
number of consumers.
B)
price of the good or service.
C)
consumer income.
D)
price of related goods.
284)
At a price of P0 in the above figure, which of the following statements is FALSE?
284)
A)
Quantity demanded equals quantity supplied.
B)
P0 is the market clearing price.
C)
There is an equilibrium in the market.
D)
There is a surplus equal to Q0.
285)
Market clearing price
285)
A)
refers to a supply curve.
B)
exists at a the point at which quantity demanded equals quantity supplied.
C)
refers to a surplus.
D)
refers to a movement along the demand curve.
286)
The price of a new textbook increased from $60 to $75 in one year, while the price of a used
textbook increased by 25 percent. What happened to the relative price of a used textbook?
286)
A)
It increased by 25 percent.
B)
It remained constant.
C)
It increased by 10 percent.
D)
It can’t be determined without knowing the nominal price of the used textbook in at least one
of the years.
287)
All of the following will cause a shift in the supply of smartphones EXCEPT
287)
A)
a decrease in the number of smartphone manufacturers.
B)
an increase in the cost of producing smartphones.
C)
a decrease in the prices of smartphones.
D)
a per–unit government subsidy on the production of smartphones.
288)
Consider the following:
Item Price/Last Year Price/This Year
Hamburgers $3.00 $4.00
Movies $5.00 $6.00
The relative price of movies this year has
288)
A)
increased.
B)
decreased.
C)
stayed the same.
D)
Not enough information has been given to calculate an answer.
289)
In the above figure, if the price is equal to $50, there is
289)
A)
a shortage of 100 units.
B)
an inadequate supply of 100 units.
C)
a surplus of 200 units.
D)
an excess quantity demanded of 50 units.
290)
If the price of gasoline rises sharply and the demand for sports utility vehicles falls, then the two
goods are
290)
A)
complements.
B)
inferior goods.
C)
substitutes.
D)
normal goods.
291)
Refer to the above figure for a particular good. The rightward shift of the curve could have been
caused by
291)
A)
a decrease in the price of that good.
B)
a decrease in the price of an input.
C)
an increase in the price of a complementary good.
D)
an increase in the price of a substitute good.
292)
A subsidy to carrot farmers will
292)
A)
leave both the supply and demand of carrots unchanged.
B)
decrease the quantity of carrots supplied.
C)
increase the quantity of carrots demanded.
D)
increase the supply of carrots.
293)
The relative price of a good is that price
293)
A)
expressed in today’s dollars.
B)
that is equal to the equilibrium price.
C)
expressed in constant 2012 dollars.
D)
expressed in terms of the price of another good.