63. Refer to Table 4-13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches and that the market
demand violates the law of demand. Then, in the table, the value of x must be
a.
less than or equal to 5.
b.
greater than or equal to 5.
c.
greater than or equal to 7.
d.
greater than or equal to 10.
64. Refer to Table 4-13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches. Also suppose the
following:
• x = 2.
• The current price of a sandwich is $5.00.
• The market quantity supplied of sandwiches is 10.
• The law of supply applies to the supply of sandwiches.
Then there is a
a.
shortage of 5 sandwiches, and the price would be expected to rise from its current level of $5.00.
b.
shortage of 5 sandwiches, and the price would be expected to fall from its current level of $5.00.
c.
surplus of 5 sandwiches, and the price would be expected to rise from its current level of $5.00.
d.
surplus of 5 sandwiches, and the price would be expected to fall from its current level of $5.00.
65. Refer to Table 4-13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches. Also suppose the
following:
• x = 2.
• The current price of a sandwich is $3.00.
• The market quantity supplied of sandwiches is 4.
• The slope of the supply curve is 2.
Then there is currently a
a.
shortage of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00.
b.
shortage of 6 sandwiches, and the equilibrium price of a sandwich is $5.00.
c.
surplus of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00.
d.
surplus of 6 sandwiches, and the equilibrium price of a sandwich is $5.00.
66. Refer to Table 4-13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches. Also suppose the
following:
• x = 2.
• The current price of a sandwich is $3.00.
• The market quantity supplied of sandwiches is 5.
• The slope of the supply curve is 1.
Then there is currently a
a.
shortage of 5 sandwiches, and the equilibrium price of a sandwich is between $3.00 and $5.00.
b.
shortage of 5 sandwiches, and the equilibrium price of a sandwich is $5.00.
c.
surplus of 5 sandwiches, and the equilibrium price of a sandwich is between $3.00 and $5.00.
d.
surplus of 5 sandwiches, and the equilibrium price of a sandwich is $5.00.
Figure 4-17
67. Refer to Figure 4-17. At a price of
a.
$2, there is a surplus of 6 units.
b.
$5, there is a surplus of 25 units.
c.
$5, there is a shortage of $25.
d.
$7, there is a surplus of 4 units.
68. Refer to Figure 4-17. At a price of
a.
$2, there is a shortage of 6 units.
b.
$5, there is a surplus of 25 units.
c.
$5, there is a shortage of $25.
d.
$7, there is a shortage of 4 units.
69. Refer to Figure 4-17. At a price of
a.
$8, there is a surplus of 6 units.
b.
$5, there is neither a shortage nor a surplus.
c.
$2, there is a shortage of 6 units.
d.
All of the above are correct.
Figure 4-18
70. Refer to Figure 4-18. Equilibrium price and quantity are, respectively,
a.
$15 and 200 units.
b.
$25 and 600 units.
c.
$25 and 400 units.
d.
$35 and 200 units.
71. Refer to Figure 4-18. At the equilibrium price,
a.
200 units would be supplied and demanded.
b.
400 units would be supplied and demanded.
c.
600 units would be supplied and demanded.
d.
600 units would be supplied, but only 200 would be demanded.
72. Refer to Figure 4-18. At a price of $35, there would be a
a.
shortage of 400 units.
b.
surplus of 200 units.
c.
surplus of 400 units.
d.
surplus of 600 units.
73. Refer to Figure 4-18. At a price of $35, there would be
a.
a shortage, and the price would tend to rise from $35 to a higher price.
b.
a surplus, and the price would tend to rise from $35 to a higher price.
c.
excess demand, and the price would tend to fall from $35 to a lower price.
d.
excess supply, and the price would tend to fall from $35 to a lower price.
74. Refer to Figure 4-18. At what price would there be an excess supply of 200 units of the good?
a.
$15
b.
$20
c.
$30
d.
$35
75. Refer to Figure 4-18. At a price of $15, there would be a
a.
surplus of 400 units.
b.
shortage of 200 units.
c.
shortage of 400 units.
d.
shortage of 600 units.
76. Refer to Figure 4-18. At a price of $20, there would be a(n)
a.
shortage. The law of supply and demand predicts that the price will fall from $20 to a lower price.
b.
surplus. The law of supply and demand predicts that the price will rise from $20 to a higher price.
c.
excess demand. The law of supply and demand predicts that the price will rise from $20 to a higher price.
d.
excess supply. The law of supply and demand predicts that the price will fall from $20 to a lower price.
77. Refer to Figure 4-18. At what price would there be an excess demand of 200 units of the good?
a.
$15
b.
$20
c.
$30
d.
$35
Figure 4-19
78. Refer to Figure 4-19. In this market, equilibrium price and quantity, respectively, are
a.
$10 and 30 units.
b.
$10 and 50 units.
c.
$10 and 70 units.
d.
$4 and 50 units.
79. Refer to Figure 4-19. If price in this market is currently $14, then there would be a(n)
a.
surplus of 20 units. The law of supply and demand predicts that the price will rise from $14 to a higher price.
b.
excess supply of 20 units. The law of supply and demand predicts that the price will fall from $14 to a lower
price.
c.
surplus of 40 units. The law of supply and demand predicts that the price will rise from $14 to a higher price.
d.
excess supply of 40 units. The law of supply and demand predicts that the price will fall from $14 to a lower
price.
80. Refer to Figure 4-19. If there is currently a shortage of 20 units of the good, then the law of
a.
demand predicts that the price will rise by $2 to eliminate the shortage.
b.
supply predicts that the price will rise by $2 to eliminate the shortage.
c.
supply and demand predicts that the price will rise by $2 to eliminate the shortage.
d.
supply and demand predicts that the price will fall by $2 to eliminate the shortage.
Figure 4-20
81. Refer to Figure 4-20. In this market, equilibrium price and quantity, respectively, are
a.
$15 and 400 units.
b.
$20 and 600 units.
c.
$25 and 500 units.
d.
$25 and 800 units.
82. Refer to Figure 4-20. At a price of $20, which of the following statements is not correct?
a.
The market is in equilibrium.
b.
Equilibrium price is equal to equilibrium quantity.
c.
There is no pressure for price to change.
d.
The quantity of the good that is bought and sold is 600 units.
83. Refer to Figure 4-20. If price is $25, then quantity demanded and quantity supplied, respectively, are
a.
500 units and 500 units.
b.
500 units and 800 units.
c.
600 units and 600 units.
d.
800 units and 500 units.
84. Refer to Figure 4-20. If the price is $25, then there would be an excess
a.
supply of 100 units, and price would fall.
b.
supply of 300 units, and price would fall.
c.
demand of 100 units, and price would fall.
d.
demand of 300 units, and price would fall.
85. Refer to Figure 4-20. If the price is $10, then there would be a
a.
shortage of 400 units, and price would rise.
b.
surplus of 400 units, and price would rise.
c.
shortage of 600 units, and price would rise.
d.
surplus of 600 units, and price would rise.
86. Refer to Figure 4-20. At a price of $15,
a.
quantity demanded exceeds quantity supplied.
b.
there is a shortage.
c.
there is an excess demand.
d.
All of the above are correct.
Figure 4-21
87. Refer to Figure 4-21. What is the equilibrium price in this market?
a.
$0
b.
$5
c.
$10
d.
$20
88. Refer to Figure 4-21. What is the equilibrium quantity in this market?
a.
2.5 units
b.
5 units
c.
7.5 units
d.
10 units
89. Refer to Figure 4-21. At a price of $16, there is a
a.
surplus of 1 unit.
b.
surplus of 3 units.
c.
shortage of 1 unit.
d.
shortage of 3 units.
90. Refer to Figure 4-21. At a price of $4, there is a
a.
surplus of 1 unit.
b.
surplus of 3 units.
c.
shortage of 1 unit.
d.
shortage of 3 units.
Figure 4-22
91. Refer to Figure 4-22. What is the equilibrium price in this market?
a.
$8
b.
$12
c.
$16
d.
$20
92. Refer to Figure 4-22. What is the equilibrium quantity in this market?
a.
4 units
b.
8 units
c.
12 units
d.
16 units
93. Refer to Figure 4-22. At a price of $12, there is a
a.
surplus of 2 units.
b.
surplus of 4 units.
c.
shortage of 2 units.
d.
shortage of 4 units.
94. Refer to Figure 4-22. At a price of $8, there is a
a.
surplus of 4 units.
b.
surplus of 8 units.
c.
shortage of 4 units.
d.
shortage of 8 units.
95. Refer to Figure 4-22. At a price of $24, there is a
a.
surplus of 4 units.
b.
surplus of 8 units.
c.
shortage of 4 units.
d.
shortage of 8 units.
96. Refer to Figure 4-22. At a price of $20, there is a
a.
surplus of 4 units.
b.
surplus of 8 units.
c.
shortage of 4 units.
d.
shortage of 8 units.
97. You have been asked by your economics professor to graph the market for lumber and then to analyze the change that
would occur in equilibrium price as a result of recent forest fires in the west. Your first step would be to
a.
decide which direction to shift the curve.
b.
decide whether the fires affected demand or supply.
c.
graph the shift to see the effect on equilibrium.
d.
None of the above is correct.
98. Which of the following events must result in a lower price in the market for Snickers?
a.
Demand for Snickers increases, and supply of Snickers decreases.
b.
Demand for Snickers and supply of Snickers both decrease.
c.
Demand for Snickers decreases, and supply of Snickers increases.
d.
Demand for Snickers and supply of Snickers both increase
99. Which of the following events must result in a higher price in the market for cigars?
a.
Demand for cigars increases, and supply of cigars decreases.
b.
Demand for cigars and supply of cigars both decrease.
c.
Demand for cigars decreases, and supply of cigars increases.
d.
Demand for cigars and supply of cigars both increase
100. Suppose buyers of computers and printers regard the two goods as complements. Then an increase in the price of
computers will cause a(n)
a.
decrease in the demand for printers and a decrease in the quantity supplied of printers.
b.
decrease in the supply of printers and a decrease in the quantity demanded of printers.
c.
decrease in the equilibrium price of printers and an increase in the equilibrium quantity of printers.
d.
increase in the equilibrium price of printers and a decrease in the equilibrium quantity of printers.
101. Suppose buyers of coffee and sugar regard the two goods as complements. Then an increase in the price of coffee
will cause a(n)
a.
decrease in the demand for sugar and a decrease in the quantity supplied of sugar.
b.
decrease in the supply of sugar and a decrease in the quantity demanded of sugar.
c.
decrease in the equilibrium price of sugar and an increase in the equilibrium quantity of sugar.
d.
increase in the equilibrium price of sugar and a decrease in the equilibrium quantity of sugar.
102. Which of the following would increase in response to a decrease in the price of ironing boards?
a.
the quantity of irons demanded at each possible price of irons
b.
the equilibrium quantity of irons
c.
the equilibrium price of irons
d.
All of the above are correct.
103. Which of the following would increase in response to a increase in the price of ironing boards?
a.
the quantity of irons demanded at each possible price of irons
b.
the equilibrium quantity of irons
c.
the equilibrium price of irons
d.
None of the above is correct.
104. A decrease in input costs to firms in a market will result in a(n)
a.
decrease in equilibrium price and an increase in equilibrium quantity.
b.
decrease in equilibrium price and a decrease in equilibrium quantity.
c.
increase in equilibrium price and a decrease in equilibrium quantity.
d.
increase in equilibrium price and an increase in equilibrium quantity.
105. Suppose there is a flood in St. Louis, Missouri, that destroys several beer bottling facilities. Which of the following
would not be a direct result of this event?
a.
Sellers would not be able to produce and sell as much as before at each relevant price.
b.
The supply would decrease.
c.
Buyers would not be willing to buy as much as before at each relevant price.
d.
The equilibrium price would rise.
106. An early frost in the vineyards of Napa Valley would cause a(n)
a.
increase in the demand for wine, increasing price.
b.
increase in the supply of wine, decreasing price.
c.
decrease in the demand for wine, decreasing price.
d.
decrease in the supply of wine, increasing price.
107. Exceptionally favorable growing conditions in the vineyards of Napa Valley would cause a(n)
a.
increase in the demand for wine, increasing price.
b.
increase in the supply of wine, decreasing price.
c.
decrease in the demand for wine, decreasing price.
d.
decrease in the supply of wine, increasing price.
108. Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we
expect to happen in the market?
a.
Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
b.
Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
c.
Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
d.
Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
109. Suppose the number of buyers in a market decreases and a technological advancement occurs also. What would we
expect to happen in the market?
a.
Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
b.
Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
c.
Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
d.
None of the above is correct.
110. Suppose the income of buyers in a market for an inferior good decreases and a technological advancement occurs
also. What would we expect to happen in the market?
a.
Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
b.
Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
c.
Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
d.
None of the above is correct.
111. Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in
input prices. What would we expect to occur in this market?
a.
Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
b.
Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
c.
Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
d.
Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
112. What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the
price of tea fell?
a.
Price would fall, and the effect on quantity would be ambiguous.
b.
Price would rise, and the effect on quantity would be ambiguous.
c.
Quantity would fall, and the effect on price would be ambiguous.
d.
Quantity would rise, and the effect on price would be ambiguous.
113. Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade
potatoes to increase if number two grade potatoes are an inferior good?
a.
an increase in consumer income
b.
a decrease in consumer income
c.
greater government restrictions on agricultural chemicals
d.
fewer government restrictions on agricultural chemicals
114. Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which
of the following explanations would be most consistent with this observation?
a.
Consumers have experienced an increase in income, and beef-production technology has improved.
b.
The price of chicken has risen, and the price of steak sauce has fallen.
c.
New medical evidence has been released that indicates a negative correlation between a person’s beef
consumption and life expectancy.
d.
The demand curve for beef must be positively sloped.
115. During the last few decades in the United States, health officials have argued that eating too much beef might be
harmful to human health. As a result, there has been a significant decrease in the amount of beef produced. Which of the
following best explains the decrease in production?
a.
Beef producers, concerned about the health of their customers, decided to produce relatively less beef.
b.
Government officials, concerned about consumer health, ordered beef producers to produce relatively less
beef.
c.
Individual consumers, concerned about their own health, decreased their demand for beef, which lowered the
equilibrium price of beef, making it less attractive to produce.
d.
Anti-beef protesters have made it difficult for both buyers and sellers of beef to meet in the marketplace.
116. Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts?
a.
an increase in the price of wool shirts and a decrease in the price of raw cotton
b.
a decrease in the price of wool shirts and a decrease in the price of raw cotton
c.
an increase in the price of wool shirts and an increase in the price of raw cotton
d.
a decrease in the price of wool shirts and an increase in the price of raw cotton
117. Which of the following events would unambiguously cause an increase in the equilibrium price of cotton shirts?
a.
an increase in the price of wool shirts and a decrease in the price of raw cotton
b.
a decrease in the price of wool shirts and a decrease in the price of raw cotton
c.
an increase in the price of wool shirts and an increase in the price of raw cotton
d.
a decrease in the price of wool shirts and an increase in the price of raw cotton
118. Which of the following events would cause the price of oranges to fall?
a.
There is a shortage of oranges.
b.
The FDA announces that bananas cause strokes, and oranges and bananas are substitutes.
c.
The price of land throughout Florida decreases, and Florida produces a significant proportion of the nation’s
oranges.
d.
All of the above are correct.
119. What would happen to the equilibrium price and quantity of lattés if consumers’ incomes rise and lattés are a normal
good?
a.
Both the equilibrium price and quantity would increase.
b.
Both the equilibrium price and quantity would decrease.
c.
The equilibrium price would increase, and the equilibrium quantity would decrease.
d.
The equilibrium price would decrease, and the equilibrium quantity would increase.
120. If macaroni and cheese is an inferior good, what would happen to the equilibrium price and quantity of macaroni and
cheese if consumers’ incomes rise?
a.
Both the equilibrium price and quantity would increase.
b.
Both the equilibrium price and quantity would decrease.
c.
The equilibrium price would increase, and the equilibrium quantity would decrease.
d.
The equilibrium price would decrease, and the equilibrium quantity would increase.