368)
Refer to the above figure. A movement from point A to point B indicates
368)
A)
an increase in quantity demanded.
B)
a decrease in demand.
C)
a decrease in quantity demanded.
D)
an increase in demand.
369)
A change in the price of a good causes
369)
A)
an increase in demand and a decrease in supply.
B)
a change in quantity supplied.
C)
an increase in supply.
D)
a decrease in supply.
370)
An increase in the price of steel to producers of refrigerators will cause
370)
A)
the quantity supplied of refrigerators to increase.
B)
the supply curve for refrigerators to shift left.
C)
the quantity demanded for steel to increase.
D)
the demand for refrigerators to decrease.
371)
The imposition of a per unit tax on a product
371)
A)
will cause the supply curve to shift upward and to the left.
B)
will reduce the quantity supplied of the product.
C)
will cause the supply curve to shift downward and to the right.
D)
will encourage producers to increase the quantity supplied of the product.
372)
Other things being constant, the only way to move along a given supply curve for a product is for
372)
A)
the future relative price of related goods to change.
B)
technological changes to occur.
C)
the number of sellers to change.
D)
the product‘s relative price to change.
373)
Suppose a concert by Lady Gaga and a basketball game played by the L.A. Lakers are substitutes,
then which of the following is TRUE?
373)
A)
The price of a ticket to a Lakers game will always equal the price of a ticket to a Lady Gaga
concert.
B)
If the price of a ticket to a Lakers game decreases, the quantity of Lakers tickets demanded
will increase.
C)
If the price of a ticket to a Lakers game increases, then the demand for Lady Gaga tickets will
remain unchanged.
D)
If the price of a ticket to a Lakers game increases, then the demand for Lady Gaga tickets will
fall.
374)
Which of the following products are likely to be complementary goods?
374)
A)
Domino’s pizza and Papa John’s pizza
B)
portable MP3 players and batteries
C)
Coke and Pepsi
D)
HD–DVDs and Blu–Ray DVDs
375)
The quantity supplied of a particular good is the amount of the good that
375)
A)
households are willing to consume at each particular price.
B)
firms will actually end up buying at a particular price during a given time period.
C)
households want firms to sell at each price during a particular time period.
D)
firms are willing to sell at each price during a particular time period.
376)
Four points on a demand schedule are given: $12, 2 units; $10, 1 unit; $15, 1.5 units; and $2, 4 units.
Which combination is inconsistent with the law of demand?
376)
A)
$10 and 1 unit
B)
$12 and 2 units
C)
$2 and 4 units
D)
$15 and 1.5 units
377)
Regarding the law of supply, which of the following statements is correct?
377)
A)
As the price of a good or service rises, the quantity supplied will decrease.
B)
The ceteris paribus assumption does not apply.
C)
As demand falls, supply rises.
D)
As the price of a good or service rises, the quantity supplied will increase.
378)
According to the law of demand, an increase in the price of a good causes
378)
A)
a leftward shift of the demand curve for that good.
B)
an upward movement along the demand curve for that good.
C)
a rightward shift of the demand curve for that good.
D)
a downward movement along the demand curve for that good.
379)
All other factors held constant, when McDonald’s raises the price of its Quarter Pounder by 50 cents,
379)
A)
there is likely to be a decrease in the quantity of Taco Bell’s Chalupas demanded, assuming the
Quarter Pounder and Chalupas are substitutes.
B)
there is likely to be an increase in demand for McDonald’s Quarter Pounder, assuming the
Quarter Pounder and Chalupas are substitutes.
C)
there is likely to be an increase in demand for Taco Bell’s Chalupas, assuming the Quarter
Pounder and Chalupas are substitutes.
D)
there is likely to be a decrease in demand for Taco Bell’s Chalupas, assuming the Quarter
Pounder and Chalupas are substitutes.
380)
Which of the following are substitute goods?
380)
A)
pizza and beer
B)
margarine and butter
C)
sports utility vehicles and gasoline
D)
peanut butter and jelly
381)
A shortage will occur when
381)
A)
the price is below the market clearing level.
B)
the price equals the market clearing level.
C)
there is an excess quantity supplied.
D)
the price is above the market clearing level.
382)
The arrangements that individuals have with each other to exchange goods is known as
382)
A)
complements.
B)
a market.
C)
demand.
D)
supply.
383)
A shift in the demand curve will occur when
383)
A)
the price of the product changes.
B)
supply shifts.
C)
consumers’ income changes.
D)
the price of an input used to produce the good changes.
384)
Which of the following is a determinant of consumer demand?
384)
A)
expectation of the future relative price of a product
B)
cost of inputs used to produce the product
C)
taxes imposed on firms that sell the product
D)
number of firms that produce the product
385)
Which of the following is a determinant of supply?
385)
A)
technology
B)
tastes and preferences of consumers
C)
consumer income
D)
number of consumers
386)
When the price of a good rises, there is
386)
A)
an increase in quantity supplied.
B)
an increase in supply.
C)
a decrease in quantity supplied.
D)
a decrease in supply.
387)
When economists talk about a demand schedule for a product, they mean
387)
A)
the amount of a good that producers are willing to make available for sale at a particular
price in a given time period.
B)
the amount of a good that consumers intend to purchase at only one particular price in a
given period of time.
C)
the amount of a good that consumers are able to purchase (though they might not be willing
to) at different prices in a given period of time.
D)
the amount of a good that consumers intend to purchase at each price in a set of possible
prices in a given time period.
388)
When the price of tablet devices decreased in the 2010s, there was an increase in the demand for
computing apps because tablet devices and computing apps are
388)
A)
inferior goods.
B)
substitute goods.
C)
capital goods.
D)
complementary goods.
Quantity Quantity
Price Demanded Supplied
$5 525
$4 10 20
$3 15 15
$2 20 10
$1 25 5
389)
Using the above table, the market clearing price for this product is
389)
A)
$2.
B)
$3.
C)
$5.
D)
$4.
390)
A movement along a supply curve is induced by a change in
390)
A)
price expectations.
B)
the product’s own price.
C)
input prices.
D)
taxes and subsidies.
391)
Morgan graduates from college and gets a job paying $50,000 a year. While in school, she
consumed 4 pounds of chicken and 1 pound of shrimp a month. After she starts work, she
consumes 2 pounds of chicken and 3 pounds of shrimp a month. If everything else is held constant,
we know that
391)
A)
chicken is an inferior good and shrimp is a normal good for Morgan.
B)
chicken is an inferior good for Morgan.
C)
shrimp is a normal good for Morgan.
D)
chicken and shrimp are normal goods for Morgan.
392)
The price of a new textbook is $120 in one year and is $150 two years later, while the price of a used
copy of the text increased from $40 to $60. The relative price of a new textbook
392)
A)
remained constant.
B)
increased from 3 to 4.5.
C)
decreased from 0.8 to 0.67.
D)
decreased from 3 to 2.5.
393)
Refer to the above figure. At a price of $10, excess quantity supplied equals
393)
A)
12.
B)
15.
C)
0.
D)
infinity.
394)
Suppliers will provide more of a good when
394)
A)
the market price increases.
B)
the good is a normal good.
C)
there is a decrease in demand.
D)
resource prices increase.
395)
Which of the following will cause a rightward shift of the demand curve?
395)
A)
an increase in the expected future price of the good
B)
a decrease in the price of the good
C)
a decrease in the cost of production
D)
all of the above
396)
Refer to the above figure. Suppose that Cheerios and Apple Jacks are substitutes. Which diagram
shows the effect on the demand for Cheerios when the price of Apple Jacks cereal has decreased?
396)
A)
A
B)
B
C)
neither graph
D)
both graphs
397)
According to the above figure, a shortage is shown between which two points?
397)
A)
A and B
B)
A and E
C)
E and F
D)
C and B
C
398)
Suppose that milk producers expect that the price of milk is going to drop next week. This would
cause
398)
A)
an increase in the demand for milk today.
B)
the selling price of milk to rise today.
C)
a decrease in the supply of milk today.
D)
an increase in the supply of milk today.
D
B
399)
The price of a phone call at a pay phone was 5 cents in 1950 and the price of a first–class stamp was
3 cents. In 2014, the pay phone costs 50 cents for a call and a first–class stamp costs 49 cents. We
know that
399)
A)
all prices increased from 1950 to 2014: Nominal prices of phone calls, first–class stamps, and
the relative prices of phone calls and first–class stamps.
B)
both the nominal prices of phone calls and first–class stamps increased from 1950 to 2014, but
the relative price of stamps increased and the relative price of phone calls decreased from
1950 to 2014.
C)
both the nominal prices of phone calls and first–class stamps increased from 1950 to 2014, but
we can’t tell if the relative prices increased or decreased without more information.
D)
both the nominal and the relative price of phone calls increased from 1950 to 2014.
400)
After the price of milk increases, David buys more eggs and less cereal. For David
400)
A)
milk, eggs, and cereal are all complements.
B)
milk and eggs are complements, and milk and cereal are substitutes.
C)
milk, eggs, and cereal are all substitutes.
D)
milk and eggs are substitutes, and milk and cereal are complements.
401)
Refer to the above figure. Which panel best demonstrates the demand curve?
401)
A)
Panel A
B)
Panel B
C)
Panel C
D)
Panel D
Supplier 1 Supplier 2 Supplier 3
Quantity Supplied Quantity Supplied Quantity Supplied
Price (thousands) (thousands) (thousands)
8 11 720
7 8 615
6 5 510
5 2 4 5
402)
Refer to the above table. The market quantity supplied when the price is $7 is
402)
A)
38.
B)
20.
C)
29.
D)
0.
403)
The law of demand
403)
A)
only applies to necessities, not to luxuries.
B)
is only an assumption that cannot be tested.
C)
does not apply to scarce goods.
D)
is supported by observations of human behavior in the marketplace.
404)
How does a change in quantity supplied differ from a change in supply?
404)
A)
A change in one of the ceteris paribus conditions affects quantity supplied, not supply.
B)
There is no difference.
C)
A change in the price affects quantity supplied, not supply.
D)
A change in quantity supplied shifts the supply curve; a change in supply is a movement
along the curve.
405)
An expected future increase in the price of gasoline may
405)
A)
decrease the demand for gasoline now.
B)
make gasoline an inferior good.
C)
increase the supply of gasoline now.
D)
increase the demand for gasoline now.
406)
Demand is a schedule of
406)
A)
how much of a good a person wants.
B)
how much of a good people will purchase at each income level.
C)
how much of a good people will purchase at each different possible price.
D)
each possible price and the amount people will buy when their incomes change.
407)
Suppose that the price of cornflakes is $3 per box and the price of oatmeal is $4.50 per box. Both
boxes contain the same number of ounces of cereal. The relative price of cornflakes in terms of
oatmeal is
407)
A)
0.67.
B)
1.50.
C)
1.0.
D)
0.75.
408)
A normal good is one for which
408)
A)
demand increases as income increases.
B)
the demand curve is horizontal.
C)
demand increases as income decreases.
D)
demand increases as the price of a substitute increases.
409)
Scalping and other black market activities arise when
409)
A)
the prices of goods are restricted to levels above equilibrium prices.
B)
the quantities of goods demanded and supplied are allowed to adjust to their equilibrium
levels.
C)
the prices of goods are allowed to adjust to their equilibrium levels.
D)
the prices of goods are restricted to levels below equilibrium prices.
410)
Refer to the above figure. At a price of three cents, a(n) ________ of bubble gum will exist in the
market.
410)
A)
excess quantity supplied
B)
shortage
C)
surplus
D)
equilibrium quantity
411)
Which of the following is TRUE of the activities of ticket scalpers?
411)
A)
These activities cannot generate profits for the scalpers unless ticket prices are currently
below market clearing levels.
B)
Engaging in these activities enable scalpers to push the price below the market clearing level.
C)
Engaging in these activities enable scalpers to push the price above the market clearing level.
D)
These activities help reduce the quantities of excess tickets supplied for events in which ticket
surpluses currently exist.
412)
If the price of apples goes down, then the demand for pears will
412)
A)
decrease, assuming apples and pears are substitutes.
B)
remain constant, assuming apples and pears are related goods.
C)
increase, assuming apples and pears are substitutes.
D)
decrease, assuming apples and pears are complements.
413)
Sarah gets a salary increase of 20 percent. Before her raise, she purchased 5 pounds of hamburger
and 1 pound of beef stew a month. After her raise, she consumes 2 pounds of hamburger and 3
pounds of beef stew a month. If everything else is held constant, we know that
413)
A)
both hamburger and beef stew are inferior goods for Sarah.
B)
hamburger is a normal good and beef stew is an inferior good for Sarah.
C)
both hamburger and beef stew are normal goods for Sarah.
D)
hamburger is an inferior good and beef stew is a normal good for Sarah.
414)
The law of demand states that there is
414)
A)
an inverse relationship between income and quantity demanded, ceteris paribus.
B)
no relationship between taste and quantity demanded, ceteris paribus.
C)
an inverse relationship between price and quantity demanded, ceteris paribus.
D)
a direct relationship between income and quantity demanded, ceteris paribus.
C
415)
Which of the following causes an increase in demand for a normal good?
415)
A)
decrease in price
B)
decrease in income
C)
increase in the price of a complement
D)
increase in the price of a substitute
D
D
416)
According to the above figure for a gasoline market, what happens when the price per gallon of
gasoline jumps from $1 to $4?
416)
A)
The market moves from a shortage of 40 million gallons/day to a surplus of 50 million
gallons/day.
B)
The market shortage is replaced by market equilibrium.
C)
A surplus of 40 million gallons/day results.
D)
A gasoline surplus is replaced by a gas shortage.
417)
Refer to the above figure. A surplus will exist when
417)
A)
the price equals $6.
B)
the price equals $10.
C)
quantity demanded equals 15.
D)
the price is between $0 and $6.
418)
If the price of one good goes up and the demand of a related good goes down, the two goods are
418)
A)
substitutes.
B)
normal goods.
C)
inferior goods.
D)
complements.
419)
Other things being equal, an increase in wages paid to workers in firms making digital devices will
cause
419)
A)
the quantity of digital devices demanded to increase.
B)
the demand for digital devices to decrease.
C)
the supply of digital devices to decrease.
D)
the quantity of digital devices supplied to decrease.
C
420)
An inferior good is one for which
420)
A)
the demand curve slopes up.
B)
the demand curve is vertical.
C)
demand decreases as income increases.
D)
demand increases as income increases.
C
421)
The “real” price of a good is known as
421)
A)
the absolute price of the good.
B)
the dollar price of the good since we use dollars in the United States.
C)
the price actually paid for a good instead of the sticker price.
D)
relative price of the good.
D
422)
When income falls
422)
A)
the demand for a normal goods rises.
B)
there is a movement downward along the demand curve for an inferior good.
C)
the demand for an inferior goods rises.
D)
there is a movement downward along the demand curve for a normal good.
C
D
423)
An increase in price will lead to an increase in quantity supplied. This statement is
423)
A)
the law of demand.
B)
a normative statement.
C)
untrue always.
D)
the law of supply.
424)
Refer to the above figure. The rightward shift of the curve could have been caused by
424)
A)
a technological improvement.
B)
an increase in income.
C)
a technological setback.
D)
a decrease in income.
425)
If a bottled soft drink and bottled juice are substitutes, when the price of the bottled soft drink rises
425)
A)
demand for bottled juice falls.
B)
demand for bottled juice rises.
C)
quantity of bottled juice demanded rises.
D)
quantity of bottled juice demanded falls.
426)
Ceteris paribus, as the price of a good or service increases
426)
A)
people will want less of it.
B)
people will buy more of it.
C)
people will buy less of it.
D)
people will want more of it.