121. If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to
the equilibrium price and quantity of lattés if the price of muffins rises?
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.
122. If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to
the equilibrium price and quantity of lattés if the price of muffins falls?
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.
123. If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of
lattés if the price of cappuccinos rises?
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.
124. If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of
lattés if the price of cappuccinos falls?
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.
125. If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks, what would happen to
the equilibrium price and quantity of lattés?
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.
126. What would happen to the equilibrium price and quantity of lattés if the cost of producing steamed milk, which is
used to make lattés, rises?
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.
127. What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced
the amount of labor necessary to produce them?
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.
128. Saddle shoes are not popular right now, so very few are being produced. If saddle shoes become popular, then how
will this affect the market for saddle shoes?
a.
The supply curve for saddle shoes will shift right, which will create a shortage at the current price. Price will
increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium
will be at a higher price and higher quantity.
b.
The supply curve for saddle shoes will shift right, which will create a surplus at the current price. Price will
decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium
will be at a lower price and higher quantity.
c.
The demand curve for saddle shoes will shift right, which will create a shortage at the current price. Price will
increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium
will be at a higher price and higher quantity.
d.
The demand curve for saddle shoes will shift right, which will create a surplus at the current price. Price will
decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium
will be at a lower price and higher quantity.
129. The market for diamond rings is closely linked to the market for high-quality diamonds. If a large quantity of high-
quality diamonds enters the market, then the
a.
supply curve for diamond rings will shift right, which will create a shortage at the current price. Price will
increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium
will be at a higher price and higher quantity.
b.
supply curve for diamond rings will shift right, which will create a surplus at the current price. Price will
decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium
will be at a lower price and higher quantity.
c.
demand curve for diamond rings will shift right, which will create a shortage at the current price. Price will
increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium
will be at a higher price and higher quantity.
d.
demand curve for diamond rings will shift right, which will create a surplus at the current price. Price will
decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium
will be at a lower price and higher quantity.
130. Music compact discs are normal goods. What will happen to the equilibrium price and quantity of music compact
discs if musicians accept lower royalties, compact disc players become cheaper, more firms start producing music
compact discs, and music lovers experience an increase in income?
a.
b.
c.
d.
131. What will happen to the equilibrium price of new textbooks if more students attend college, paper becomes cheaper,
textbook authors accept lower royalties, and fewer used textbooks are sold?
a.
Price will rise.
b.
Price will fall.
c.
Price will stay exactly the same.
d.
The price change will be ambiguous.
132. New oak tables are normal goods. What would happen to the equilibrium price and quantity in the market for oak
tables if the price of maple tables rises, the price of oak wood rises, more buyers enter the market for oak tables, and the
price of the glue used in the production of the new oak tables increased?
a.
b.
c.
d.
133. What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of
jelly fell, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was good
for you?
a.
b.
c.
d.
134. Pens are normal goods. What will happen to the equilibrium price of pens if the price of pencils rises, consumers
experience an increase in income, writing in ink becomes fashionable, people expect the price of pens to rise in the near
future, the population increases, fewer firms manufacture pens, and the wages of pen-makers increase?
a.
Price will rise.
b.
Price will fall.
c.
Price will stay exactly the same.
d.
The price change will be ambiguous.
135. What will happen to the equilibrium price and quantity of traditional camera film if traditional cameras become more
expensive, digital cameras become cheaper, the cost of the resources needed to manufacture traditional film falls, and
more firms decide to manufacture traditional film?
a.
b.
c.
d.
136. New cars are normal goods. What will happen to the equilibrium price of new cars if the price of gasoline rises, the
price of steel falls, public transportation becomes cheaper and more comfortable, auto-workers accept lower wages, and
automobile insurance becomes more expensive?
a.
Price will rise.
b.
Price will fall.
c.
Price will stay exactly the same.
d.
The price change will be ambiguous.
137. What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel
rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages?
a.
b.
c.
d.
138. Consider the market for new DVDs. If DVD players became cheaper, buyers expected DVD prices to fall next year,
used DVDs became more expensive, and DVD production technology improved, then the equilibrium price of a new
DVD would
a.
rise.
b.
fall.
c.
stay the same.
d.
could rise, fall, or remain unchanged.
139. Which of the following sets of events must cause an increase in the price of a new house?
a.
higher wages for carpenters, higher wood prices, increases in consumer incomes, higher apartment rents,
increases in population, and expectations of higher house prices in the future
b.
lower wages for carpenters, lower wood prices, increases in consumer incomes, higher apartment rents,
increases in population and expectations of higher house prices in the future
c.
lower wages for carpenters, higher wood prices, decreases in consumer incomes, higher apartment rents,
decreases in population and expectations of higher house prices in the future
d.
higher wages for carpenters, lower wood prices, decreases in consumer incomes, lower apartment rents,
decreases in population and expectations of lower house prices in the future
140. What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced
the amount of labor necessary to produce steamed milk, which is used to make lattés, and scientists discovered that coffee
prevents heart attacks?
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 effect on equilibrium quantity would be ambiguous.
d.
The equilibrium quantity would increase, and the effect on equilibrium price would be ambiguous.
141. What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced
the amount of labor necessary to produce steamed milk, which is used to make lattés, and scientists discovered that lattés
cause heart attacks?
a.
Both the equilibrium price and quantity would increase.
b.
Both the equilibrium price and quantity would decrease.
c.
The equilibrium price would decrease, and the effect on equilibrium quantity would be ambiguous.
d.
The equilibrium quantity would decrease, and the effect on equilibrium price would be ambiguous.
142. What would happen to the equilibrium price and quantity of lattés if the cost to produce steamed milk, which is used
to make lattés, increased, and scientists discovered that lattés cause heart attacks?
a.
Both the equilibrium price and quantity would increase.
b.
Both the equilibrium price and quantity would decrease.
c.
The equilibrium price would decrease, and the effect on equilibrium quantity would be ambiguous.
d.
The equilibrium quantity would decrease, and the effect on equilibrium price would be ambiguous.
143. Consider the market for portable air conditioners in equilibrium. When a heat wave strikes the equilibrium price
a.
and quantity both decrease.
b.
and quantity both increase.
c.
increases, and the equilibrium quantity decreases.
d.
decreases, and the equilibrium quantity increases.
144. Consider the market for portable air conditioners in equilibrium. A summer of unseasonably cool weather would
cause
a.
both the equilibrium price and quantity to decrease.
b.
both the equilibrium price and quantity to increase.
c.
the equilibrium price to increase and the equilibrium quantity to decrease.
d.
the equilibrium price to decrease and the equilibrium quantity to increase.
Figure 4-23
145. Refer to Figure 4-23. In this market for watermelons, a severe drought occurs which affects the watermelon crop.
The equilibrium price
a.
increases and the equilibrium quantity decreases.
b.
decreases and the equilibrium quantity is ambiguous.
c.
and quantity both increase.
d.
and quantity both decrease.
146. Refer to Figure 4-23. In this market for sunscreen, there is a decrease in the price of zinc oxide, an input into
sunscreen, and more producers enter the market. The equilibrium price
a.
increases and the equilibrium quantity decreases.
b.
decreases and the equilibrium quantity increases.
c.
is ambiguous and the equilibrium quantity increases.
d.
decreases and the equilibrium quantity is ambiguous.
Figure 4-24
The diagram below pertains to the demand for turkey in the United States.
147. Refer to Figure 4-24. All else equal, an increase in the income of buyers who consider turkey to be an inferior good
would cause a move from
a.
DA to DB.
b.
DB to DA.
c.
x to y.
d.
y to x.
148. Refer to Figure 4-24. All else equal, a sale on chicken would cause a move from
a.
DA to DB.
b.
DB to DA.
c.
x to y.
d.
y to x.
149. Refer to Figure 4-24. All else equal, the approach of Thanksgiving would cause a move from
a.
DA to DB.
b.
DB to DA.
c.
x to y.
d.
y to x.
150. Refer to Figure 4-24. All else equal, buyers expecting turkey to be more expensive in the future would cause a
current move from
a.
DA to DB.
b.
DB to DA.
c.
x to y.
d.
y to x.
151. Refer to Figure 4-24. All else equal, a large number of people becoming vegetarians would cause a move from
a.
DA to DB.
b.
DB to DA.
c.
x to y.
d.
y to x.
152. Refer to Figure 4-24. All else equal, the premature deaths of thousands of turkeys would cause a move from
a.
DA to DB.
b.
DB to DA.
c.
x to y.
d.
y to x.
153. Refer to Figure 4-24. All else equal, an increase in the productivity of turkey farmers would cause a move from
a.
DA to DB.
b.
DB to DA.
c.
x to y.
d.
y to x.
154. Refer to Figure 4-24. All else equal, a decrease in the price of the grain fed to turkeys would cause a move from
a.
DA to DB.
b.
DB to DA.
c.
x to y.
d.
y to x.