Page 1
Use the following to answer questions 1-6:
1.
(Ref 7-1 Figure: Demand and Supply of Gasoline) Use Figure: Demand and Supply of
Gasoline. A factor that may have changed supply from S1 to S2 is:
A)
better technology in the production of gasoline.
B)
increased demand.
C)
lower labor productivity in gasoline production.
D)
increased prices of substitutes in production for gasoline.
2.
(Ref 7-1 Figure: Demand and Supply of Gasoline) Use Figure: Demand and Supply of
Gasoline. Given the equilibrium after a change in supply from S1 to S2:
A)
at the old price of $2.50, there will be pressure for the price to fall.
B)
the new price will be $2.00.
C)
the new quantity will be 600.
D)
the price will remain constant.
3.
Ref 7-1 Figure: Demand and Supply of Gasoline) Use Figure: Demand and Supply of
Gasoline. The initial equilibrium price and quantity (at intersection of S1 and D) of
gasoline are:
A)
$2.00 and 450 gallons.
B)
$1.50 and 400 gallons.
C)
$2.00 and 200 gallons.
D)
$2.50 and 300 gallons.
Page 2
4.
(Ref 7-1 Figure: Demand and Supply of Gasoline) Use Figure: Demand and Supply of
Gasoline. Given the initial equilibrium of S1 and D, any price lower than _____ will
exert pressure for the price to _____.
A)
$2.00; fall
B)
$2.50; rise
C)
$3.00; rise
D)
$2.50; fall
5.
(Ref 7-1 Figure: Demand and Supply of Gasoline) Use Figure: Demand and Supply of
Gasoline. When the supply curve shifted from the initial equilibrium, the new
intersection of supply and demand has a price of _____ and quantity of 400. This supply
shift could have resulted from _____.
A)
$1.50; an increase in consumers’ income
B)
$1.50; an improvement in refining technology
C)
$2.00; an increase in the number of buyers
D)
$2.00; an increase in consumers’ income
6.
(Ref 7-1 Figure: Demand and Supply of Gasoline) Use Figure: Demand and Supply of
Gasoline. What might cause the supply curve to shift from S2 back to the initial supply
curve S1?
A)
The Organization of Petroleum Exporting Countries (OPEC) restricts the
production of crude oil.
B)
OPEC increases the production of crude oil.
C)
U.S. citizens want to buy more gas.
D)
Technology in the refinement of gasoline greatly improves.
Page 3
Use the following to answer questions 7-10:
7.
(Ref 7-2 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
8.
(Ref 7-2 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 4
9.
(Ref 7-2 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
10.
(Ref 7-2 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 11-15:
Page 5
11.
(Ref 7-3 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
12.
(Ref 7-3 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
13.
(Ref 7-3 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
14.
(Ref 7-3 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 6
15.
(Ref 7-3 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 16-23:
16.
(Ref 7-4 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 7
17.
(Ref 7-4 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
18.
(Ref 7-4 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
19.
(Ref 7-4 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
20.
(Ref 7-4 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 8
21.
(Ref 7-4 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
22.
(Ref 7-4 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
23.
(Ref 7-4 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 9
Use the following to answer questions 24-25:
24.
(Ref 7-5 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
25.
(Ref 7-5 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 10
Use the following to answer questions 26-30:
26.
(Ref 7-6 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
27.
(Ref 7-6 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 11
28.
(Ref 7-6 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
29.
(Ref 7-6 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
30.
(Ref 7-6 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 31-32:
Page 12
31.
(Ref 7-7 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
32.
(Ref 7-7 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
33.
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
34.
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.
35.
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 13
36.
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.
37.
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.
38.
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.
39.
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.
40.
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 14
41.
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
42.
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
43.
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
44.
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.
45.
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 15
46.
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
47.
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
48.
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.
49.
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
50.
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 16
51.
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
52.
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
53.
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.
54.
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.
55.
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 17
56.
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.
57.
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
58.
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
59.
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.
60.
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
Page 18
61.
You notice that the price of Blu-ray players falls and the quantity of Blu-ray players
sold increases. You suspect that _____ Blu-ray players shifts to the _____.
A)
demand for; right.
B)
demand for; left.
C)
supply of; right.
D)
supply of; left.
62.
If the United States increases tariffs on imports of lumber from Canada (which raises the
price of lumber in the United States), the equilibrium price of new homes in the United
States will _____ and the equilibrium quantity of new homes in the United States will
_____.
A)
increase; increase
B)
increase; decrease
C)
decrease; increase
D)
decrease; decrease
63.
Customers used to pay inside before pumping gas. When gas stations introduced paying
at the pump, thus decreasing production costs, there was a shift to the _____ in the
_____ curve and gas prices _____.
A)
right; supply; decreased
B)
left; supply; increased
C)
right; demand; increased
D)
left; demand; decreased
64.
Many public utilities burn oil to generate electricity. If the price of oil increases, we
expect a shift to the _____ in the _____ curve for _____ and a _____ price for
electricity.
A)
right; supply; electricity; lower
B)
left; supply; electricity; higher
C)
right; demand; oil; higher
D)
left; demand; oil; lower
65.
The market for milk is initially in equilibrium. Milk producers successfully advertise to
encourage milk drinking. At the same time, more milk producers enter the market.
Standard demand and supply analysis tells us that the:
A)
equilibrium price and quantity of milk will rise.
B)
equilibrium price and quantity of milk will fall.
C)
equilibrium quantity of milk will rise, but we can’t determine how the equilibrium
price will be affected.
D)
equilibrium price of milk will rise, but we can’t determine how the equilibrium
quantity will be affected.
Page 19
66.
Consider the market for iPads. What happens if a fantastic new alternative tablet is
developed by Samsung and, at the same time, a boat carrying a large shipment of iPads
is attacked by pirates and sunk?
A)
Price decreases and quantity increases.
B)
Price increases and quantity increases.
C)
The change in price is indeterminate and quantity decreases.
D)
Price increases and the change in quantity is indeterminate.
67.
Consider the market for corn. What happens if there is an increased demand for corn
tortillas and, at the same time, a new corn seed becomes available that dramatically
increases the yield per acre?
A)
Price and quantity decrease.
B)
The change in price is indeterminate; quantity decreases.
C)
The change in price is indeterminate; quantity increases.
D)
Price increases; the change in quantity is indeterminate.
68.
In the local market for coffee, a normal good, the price will _____ and the quantity will
_____ if new coffee shops open and consumers’ incomes decrease because of a
recession.
A)
increase; be indeterminate
B)
decrease; be indeterminate
C)
be indeterminate; increase
D)
be indeterminate; decrease
69.
Suppose the local real estate market is in equilibrium. A recession causes local
household incomes to decline. At the same time, construction of a large subdivision of
new homes has just been completed. Given these two changes and assuming that real
estate is a normal good, we can predict that the price of real estate will _____ and the
quantity of real estate bought and sold will _____.
A)
fall; fall
B)
fall; rise
C)
fall; rise or fall
D)
rise; fall or rise
Page 20
70.
Suppose the market for gasoline is in equilibrium. You have heard that the price of
crude oil is falling because of new oil discoveries. You are also aware that the number
of car and truck drivers is steadily rising. Knowing this, you predict that the price of
gasoline will _____ and the quantity of gasoline bought and sold will _____.
A)
rise; rise
B)
rise; fall
C)
rise or fall; rise
D)
rise or fall; fall
71.
A recent news story reported that the Organization of Petroleum Exporting Countries is
expected to decrease the supply of oil next summer. Summer is traditionally a time of
increased demand for oil because of vacation travel. What would be the combined effect
of these two events on the summer market for gasoline?
A)
an increase in the price and the quantity
B)
an increase in the price and an unpredictable change in the quantity
C)
an unpredictable change in both the price and the quantity
D)
an unpredictable change in the price and a decrease in the quantity
72.
Suppose that more police and security workers become aware that wearing bulletproof
vests can protect them from injury and decide to start wearing bulletproof vests. At the
same time, the price of ceramics used to produce the vests falls. The equilibrium price
of bulletproof vests _____ and the equilibrium quantity produced _____.
A)
increases; increases
B)
decreases; decreases
C)
probably changes, but in an ambiguous direction; probably changes, but in an
ambiguous direction
D)
probably changes, but in an ambiguous direction; increases
73.
An increase in the price and an ambiguous change in quantity is most likely caused by:
A)
a shift to the left in demand and no shift in supply.
B)
a shift to the left in supply and no shift in demand.
C)
a shift to the right in supply and a shift to the left in demand.
D)
a shift to the left in supply and a shift to the right in demand.
74.
Suppose that supply increases and demand decreases. What is the most likely effect on
price and quantity?
A)
The price will increase, but quantity may increase, decrease, or stay the same.
B)
The price will decrease, but quantity may increase, decrease, or stay the same.
C)
The price will decrease and quantity will decrease.
D)
The price will increase and quantity will increase.
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75.
An ambiguous change in price and a decrease in quantity are most likely caused by:
A)
no shift in supply and a shift to the left in demand.
B)
a shift to the left in supply and a shift to the left in demand.
C)
a shift to the right in supply and a shift to the left in demand.
D)
a shift to the left in supply and a shift to the right in demand.
76.
The cost of sensors used in making digital cameras falls, while a successful ad campaign
makes digital cameras more fashionable. As a result, the equilibrium price of digital
cameras _____ and the equilibrium quantity _____.
A)
increases; increases
B)
increases; may increase, decrease, or stay the same
C)
may increase, decrease, or stay the same; increases
D)
decreases; increases
77.
A decrease in demand and a decrease in supply will lead to a(n) _____ in equilibrium
quantity and a(n) _____ in equilibrium price.
A)
decrease; indeterminate change
B)
indeterminate change; increase
C)
indeterminate change; decrease
D)
increase; indeterminate change
78.
An increase in demand and a decrease in supply will lead to a(n) _____ in equilibrium
quantity and a(n) _____ in equilibrium price.
A)
decrease; decrease
B)
indeterminate change; increase
C)
indeterminate change; decrease
D)
increase; indeterminate change
79.
It is certain that the equilibrium price will fall when:
A)
the supply curve and the demand curve both shift to the right.
B)
the supply curve shifts to the right and the demand curve shifts to the left.
C)
supply and demand both increase.
D)
supply decreases and demand stays the same.
80.
It is certain that the equilibrium price will rise when the supply curve shifts to the _____
and the demand curve shifts to the _____.
A)
right; right
B)
right; left
C)
left; left
D)
left; right
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81.
It is almost certain that the equilibrium quantity will fall when:
A)
the supply curve and the demand curve both shift to the right.
B)
the supply curve shifts to the right and the demand curve shifts to the left.
C)
the supply curve shifts to the left and demand shifts to the right.
D)
supply shifts to the left and demand stays the same.
82.
It is certain that the equilibrium quantity will rise when:
A)
the supply curve and the demand curve both shift to the right.
B)
the supply curve shifts to the right and the demand curve shifts to the left.
C)
supply and demand both shift to the left.
D)
supply shifts to the left and demand stays the same.
83.
Equilibrium quantity will always increase if:
A)
supply and demand both increase.
B)
supply increases and demand decreases.
C)
supply and demand both decrease.
D)
supply decreases and demand remains unchanged.
84.
Assume that corn is an input in the production of beef but not in the production of pork.
Further, beef and pork are substitutes in consumption. A decrease in the price of corn
will _____ the supply of beef and _____ the demand for pork.
A)
increase; increase
B)
decrease; increase
C)
decrease; decrease
D)
increase; decrease
85.
The market for soybeans is initially in equilibrium, with an upward-sloping supply
curve and a downward-sloping demand curve. Because of mad cow disease, producers
decide to replace bone meal with soybeans in cattle feed. The likely effect is that the:
A)
equilibrium price and quantity of soybeans will rise.
B)
equilibrium price and quantity of soybeans will fall.
C)
equilibrium quantity of soybeans will rise, but we can’t determine what will happen
to the equilibrium price.
D)
equilibrium price of soybeans will rise, but we can’t determine what will happen to
the equilibrium quantity.
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86.
If demand decreases and supply increases, the direction of change in the equilibrium
quantity is unpredictable unless the relative magnitudes of the demand and supply
changes are known.
A)
True
B)
False
87.
In the Midwestern United States, the price of an ear of corn is always lowest in the
summer. This seems odd because consumers really enjoy eating ears of corn in the
summer. Can you explain this?
88.
In August 2005, Hurricane Katrina damaged or destroyed oil platforms in the Gulf of
Mexico, refineries along the Gulf coast, and the pipeline infrastructure that transports oil
and gas to customers across the eastern United States. The winter of 2006 was unusually
cold in many parts of the country. How did these events affect the market for natural
gas?
89.
An increase in the price of sugar (an ingredient for soft drinks) and an increased concern
about tooth decay caused by the consumption of soft drinks will have which result in in
the soft drink market?
A)
There will be an increase in both the equilibrium price and quantity.
B)
Equilibrium quantity will decrease, but equilibrium price may decrease, increase,
or stay the same.
C)
There will be a decrease in both equilibrium price and quantity.
D)
Equilibrium quantity will increase, but equilibrium price may decrease, increase, or
stay the same.
90.
When an increase in the price of wheat, an important ingredient in the production of
bread, happens at the same time as an increase in the number of people consuming
bread:
A)
both the equilibrium price and quantity will increase.
B)
equilibrium quantity will decrease, but equilibrium price may decrease, increase, or
stay the same.
C)
both the equilibrium price and quantity will decrease.
D)
equilibrium price will increase, but equilibrium quantity may decrease, increase, or
stay the same.
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91.
Gasoline, a derivative of oil, is a large part of transportation costs for many producers. If
the price of oil increases at the same time that incomes fall for many consumers, one
would expect the equilibrium price of many normal goods to _____, while their
equilibrium quantities would _____.
A)
fall; rise
B)
fall, rise, or stay the same; decrease
C)
decrease; fall, rise, or stay the same
D)
fall; fall
92.
Rice and potatoes are substitutes in consumption. If the price of rice rises and there is a
bumper crop of potatoes, in the market for potatoes one would expect the equilibrium
price to _____ and the equilibrium quantity to _____.
A)
fall, rise, or stay the same; rise
B)
rise; fall
C)
fall; fall
D)
rise; fall, rise, or stay the same
93.
A beneficial technological change is developed in the production of cranberries. At the
same time, scientists discover that cranberries have significant health benefits. This will
result in:
A)
an increase in both the equilibrium price and quantity in the cranberry market.
B)
an increase in the equilibrium quantity and an uncertain effect on the equilibrium
price of cranberries.
C)
a decrease in both the equilibrium price and quantity in the cranberry market.
D)
a decrease in the equilibrium price and an uncertain effect on the equilibrium
quantity of cranberries.
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