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Page 1
1.
The market for corn in Kansas is considered to be competitive. This means there are
_____ buyers and _____ sellers of corn in Kansas.
A)
many; few
B)
few; many
C)
many; many
D)
few; few
2.
The law of demand states that other things equal, as the price:
A)
increases, the quantity demanded will increase.
B)
decreases, the demand curve will shift to the right.
C)
increases, demand will decrease.
D)
increases, the quantity demanded will decrease.
3.
A negative relationship between quantity demanded and price is called the law of:
A)
demand.
B)
increasing returns.
C)
market clearing.
D)
supply.
4.
Which of the following illustrates the law of demand?
A)
An increase in tuition encourages more students to enroll in college because the
quality of education has risen.
B)
Consumers buy more personal computers because prices have fallen.
C)
Oil companies drill for new sources because prices are higher.
D)
Fewer people play golf because incomes are lower.
5.
_____ illustrates an inverse relationship between price and quantity.
A)
A demand curve
B)
A supply curve
C)
A production possibility frontier
D)
Equilibrium
6.
A negative relationship between the quantity demanded and price is called the law of:
A)
demand.
B)
marginality.
C)
efficiency.
D)
supply.
Page 2
7.
The law of demand is illustrated by a demand curve that is:
A)
horizontal.
B)
downward-sloping.
C)
vertical.
D)
upward-sloping.
8.
The law of demand implies that:
A)
consumers are not responsive to price changes.
B)
consumers will buy more at lower prices.
C)
sellers will offer more on the market at higher prices.
D)
sellers will offer less on the market at lower prices.
9.
The _____ apples will decrease when apple prices rise.
A)
demand for
B)
quantity demanded of
C)
supply of
D)
equilibrium of
10.
A decrease in the price of a good will result in:
A)
an increase in demand.
B)
an increase in supply.
C)
an increase in the quantity demanded.
D)
more being supplied.
11.
Which of the following factors would result solely in a movement along the demand
curve for a particular good?
A)
a change in the prices of related goods
B)
a change in the price of that good
C)
a change in the size of the population
D)
both a change in the price of that good and a change in the size of the population
12.
A decrease in the price of eggs will result in an increase in the:
A)
demand for eggs.
B)
supply of eggs.
C)
quantity of eggs supplied.
D)
quantity of eggs demanded.
Page 3
13.
Which of the following best exemplifies the law of demand?
A)
As income taxes rise, fewer new cars are purchased.
B)
As the price of corn rises, more acres of corn are planted.
C)
As the price of a car rental rises, fewer cars are rented.
D)
As the population rises, more electricity is consumed.
14.
Which of the following statements is CORRECT?
A)
A change in demand is a movement along the demand curve, and a change in
quantity demanded is a shift of the demand curve.
B)
Both a change in quantity demanded and a change in demand are movements along
the demand curve, only in different directions.
C)
Both a change in quantity demanded and a change in demand are shifts of the
demand curve, only in different directions.
D)
A change in quantity demanded is a movement along the demand curve, and a
change in demand is a shift of the demand curve.
15.
Which of the following best describes demand?
A)
A change in demand is a movement along the demand curve, and a change in
quantity demanded is a shift in the demand curve.
B)
A change in quantity demanded is a movement along the demand curve, and a
change in demand is a shift in the demand curve.
C)
Both a change in quantity demanded and a change in demand are shifts in the
demand curve, only in different directions.
D)
Both a change in quantity demanded and a change in demand are movements along
the demand curve, only in different directions.
16.
In much of the country, homeowners choose to heat their houses with either natural gas
or heating oil. Which of the following would cause an increase in the demand for natural
gas?
A)
an increase in the price of natural gas
B)
a decrease in the price of natural gas
C)
a decrease in the price of heating oil
D)
an increase in consumer incomes
Page 4
17.
Raclette is a popular wintertime dish in Switzerland. It is essentially melted Raclette
cheese over boiled new potatoes. If the price of Raclette cheese decreased, we would
expect to see:
A)
an increase in demand for Raclette cheese.
B)
an increase in demand for new potatoes.
C)
no effect on the demand for either of the Raclette ingredients, since this is a
traditional dish and its consumption does not depend on the prices of the
ingredients.
D)
an increase in demand for Raclette cheese and for new potatoes.
18.
When the economy turns down and the incomes of many people decrease, vacationers
are more likely to take car trips than to fly. Which of the following provides one
possible explanation for this phenomenon?
A)
Air travel and travel by car are complementary goods.
B)
Air travel and travel by car are both normal goods.
C)
Air travel is a normal good and travel by car is an inferior good.
D)
Air travel is an inferior good and travel by car is a normal good.
19.
A shift of the demand curve for thin-crust pizza would NOT be caused by a change in:
A)
buyers' incomes.
B)
the price of thin-crust pizza.
C)
the price of thick-crust pizza.
D)
the popularity of thin-crust pizza.
20.
If goods A and B are substitutes, a decrease in the price of good B will:
A)
increase the demand for good A.
B)
increase the demand for good B.
C)
decrease the demand for good A.
D)
increase the demand for good B and decrease the demand for good A.
21.
If goods A and Z are complements, an increase in the price of good Z will:
A)
increase the demand for good A.
B)
decrease the demand for good A.
C)
decrease the demand for good Z.
D)
decrease the demand for both good A and good Z.
Page 5
22.
Over the past several years, consumers have had an increasing interest in getting tattoos.
This means that the _____ for tattoos has _____.
A)
quantity demanded; increased
B)
demand; decreased
C)
demand; increased
D)
quantity demanded; decreased
23.
Which of the following will NOT cause an increase in demand for good X?
A)
a decrease in income if good X is an inferior good
B)
an increase in income if good X is a normal good
C)
a decrease in the price of good X
D)
an increase in consumers' taste for good X
24.
Which of the following is TRUE of a normal good?
A)
When income increases, the demand for the good remains unchanged.
B)
When income increases, the demand for the good decreases.
C)
When income increases, the demand for the good increases.
D)
Income and the demand are unrelated.
25.
Which of the following is TRUE of an inferior good?
A)
When income increases, demand remains unchanged.
B)
When income increases, demand decreases.
C)
When income increases, demand increases.
D)
Income and demand are unrelated.
26.
The demand curve for videos has shifted to the right. What could have caused it?
A)
a fall in the price of videos
B)
an increase in the price of videos
C)
an increase in the supply of videos
D)
an increase in the incomes of buyers
27.
If people demand more of product A when the price of B falls, then A and B are:
A)
not related.
B)
substitutes.
C)
complements.
D)
inferior goods.
Page 6
28.
If the demand for tires goes down when the price of gas goes up, then tires and gas are:
A)
substitutes.
B)
complements.
C)
both expensive.
D)
both inexpensive.
29.
An increase in the price of hamburger would probably result in _____ in the demand for
hamburger buns.
A)
a decrease
B)
an increase
C)
no change
D)
random fluctuations
30.
An announcement that smoking will harm your ability to think clearly will most likely
result in:
A)
an increase in the quantity of cigarettes demanded.
B)
a decrease in the demand for cigarettes.
C)
no change in smoking habits.
D)
an increase in the price of cigarettes.
31.
If steak and potatoes are complements, when the price of steak goes up, the demand
curve for potatoes:
A)
shifts to the right.
B)
shifts to the left.
C)
stays the same.
D)
shifts to the right and then moves back.
32.
If chicken and beef are substitutes, then a fall in the price of chicken will bring about:
A)
an increase in the demand for beef.
B)
a decrease in the demand for beef.
C)
a decrease in the quantity demanded of beef.
D)
no change in the demand for beef.
33.
For most goods, purchases tend to rise with increases in buyers' incomes and to fall with
decreases in buyers' incomes. Such goods are known as:
A)
inferior.
B)
direct.
C)
normal.
D)
indirect.
Page 7
34.
An inferior good is one for which a(n) _____ in buyers' income causes a(n) _____.
A)
increase; increase in demand
B)
increase; increase in quantity demanded
C)
increase; decrease in demand
D)
decrease; decrease in demand
35.
Pizza is a normal good. If students' incomes at your college increase, the effect on pizza
will be:
A)
an increase in the demand.
B)
an increase in the quantity demanded.
C)
a decrease in the demand.
D)
no change in the demand.
36.
After graduation from college, you might have an increase in your income from a new
job. If as a result you decide that you will purchase more T-bone steak and less
hamburger, then for you hamburger is a(n) _____ good.
A)
normal
B)
substitute
C)
complementary
D)
inferior
37.
An increase in the demand for gasoline today caused by concerns that gasoline prices
will be higher tomorrow is most likely attributable to a change in:
A)
income.
B)
consumer expectations.
C)
consumer preferences.
D)
prices of other goods.
38.
Which of the following would shift the demand curve for new textbooks to the right?
A)
a decrease in the price of paper
B)
a fall in the price of used textbooks
C)
an increase in college enrollment
D)
a fall in the price of new textbooks
39.
Which of the following is likely to cause a rightward shift in the demand for
home-delivered pizza?
A)
a lower price of pizza
B)
a lower price of fast-food hamburgers
C)
a higher price of pepperoni
D)
a larger population
Page 8
40.
Which of the following describes two goods that are most likely substitutes in
consumption?
A)
loaves of bread and sticks of butter
B)
loaves of bread and toasters
C)
loaves of bread and hamburger buns
D)
loaves of bread and gasoline
41.
The demand for meals at a local Applebee's will shift to the left if:
A)
the Olive Garden offers a 10 percent discount coupon in the local newspaper.
B)
the price of a meal at Applebee's rises.
C)
local incomes increase and Applebee's is a normal good.
D)
the price of gasoline falls in the area.
42.
Assuming that desktop computers are normal goods, which of the following will NOT
increase demand for desktop computers?
A)
an increase in the incomes of computer users
B)
cool new computer games that can only be played on desktop computers
C)
a very large computer company going out of business
D)
the price of notebook computers increasing
43.
In the market for canned pinto beans, _____ will increase if income increases and if
pinto beans are a(n) _____ good.
A)
demand; inferior
B)
demand; normal
C)
supply; inferior
D)
supply; normal
44.
When the price of gas goes down, the demand for tires goes up. A likely possibility is
that tires and gas are:
A)
substitutes.
B)
complements.
C)
both inferior goods.
D)
both inexpensive.
Page 9
45.
If the price of hamburger decreased, it would probably result in _____ in the demand for
hamburger buns.
A)
a decrease
B)
an increase
C)
no change
D)
random fluctuations
46.
The demand curve for running shoes has shifted to the right. What could have caused it?
A)
a fall in the price of running shoes
B)
an increase in the price of running shoes
C)
an increase in the supply of running shoes
D)
an increase in the income of buyers of running shoes
47.
Which of the following will NOT cause an increase in the supply of cornflakes?
A)
an increase in the price of cornflakes
B)
a cost-saving improvement in the technology of corn production
C)
a reduction in the price of corn
D)
the expectation by producers that the price of cornflakes will fall in the future
Use the following to answer questions 48-52:
Figure: Supply of Coconuts
48.
(Figure: Supply of Coconuts) Look at the figure Supply of Coconuts. If the price of
coconuts decreased, it would be represented in the figure as a movement from:
A)
A to B.
B)
B to A.
C)
C to A.
D)
E to B.
Page 10
49.
(Figure: Supply of Coconuts) Look at the figure Supply of Coconuts. If the prices of
inputs (e.g., labor, fertilizer, and fuel) used to produce and transport coconuts increased,
it would be represented in the figure as a movement from:
A)
A to B.
B)
B to A.
C)
C to A.
D)
E to B.
50.
(Figure: Supply of Coconuts) Look at the figure Supply of Coconuts. If the prices of
inputs (e.g., labor, fertilizer, and fuel) used to produce and transport coconuts decreased,
it would be represented in the figure as a movement from:
A)
A to B.
B)
B to A.
C)
C to A.
D)
E to B.
51.
(Figure: Supply of Coconuts) Look at the figure Supply of Coconuts. An improvement
in the technology used to harvest coconuts (e.g., a faster, less expensive coconut picker)
would be represented in the figure as a movement from:
A)
A to C.
B)
B to A.
C)
C to A.
D)
B to E.
52.
(Figure: Supply of Coconuts) Look at the figure Supply of Coconuts. An expectation on
the part of coconut suppliers that the price of coconuts will be significantly higher in the
very near future would be represented in the figure as a movement from:
A)
A to B.
B)
B to A.
C)
A to C.
D)
B to E.
Page 11
Use the following to answer questions 53-54:
Figure: The Supply of DVD Rentals
53.
(Figure: The Supply of DVD Rentals) Look at the figure The Supply of DVD Rentals. A
decrease in the price of DVD rentals would result in a change illustrated by the move
from:
A)
n to o in panel A.
B)
p to q in panel B.
C)
s to t in panel C.
D)
u to v in panel D.
54.
(Figure: The Supply of DVD Rentals) Look at the figure The Supply of DVD Rentals. A
decrease in the price of DVDs sold by movie producers to rental stores would result in a
change illustrated by the move from:
A)
n to o in panel A.
B)
p to q in panel B.
C)
s to t in panel C.
D)
u to v in panel D.
Page 12
Use the following to answer questions 55-56:
55.
(Table: Supply of Lemonade) Look at the table Supply of Lemonade. When the price of
lemonade is $1 per cup, the quantity of lemonade supplied by Eli will be:
A)
40 cups.
B)
90 cups.
C)
10 cups.
D)
25 cups.
56.
(Table: Supply of Lemonade) Look at the table Supply of Lemonade. If the price of
lemonade is $1 per cup, the total quantity of lemonade supplied will be:
A)
50 cups.
B)
80 cups.
C)
25 cups.
D)
90 cups.
57.
_____ illustrates a positive relationship between price and quantity.
A)
A demand curve
B)
A supply curve
C)
A production possibility frontier
D)
Equilibrium
58.
The typical supply curve illustrates that:
A)
other things equal, the quantity supplied for a good is inversely related to the price
of a good.
B)
other things equal, the supply of the good creates its own demand for the good.
C)
other things equal, the quantity supplied for a good is positively related to the price
of a good.
D)
price and quantity supplied are unrelated.
Page 13
59.
When the price of lamps increases, the:
A)
supply increases.
B)
quantity supplied increases.
C)
supply decreases.
D)
quantity supplied decreases.
60.
When the price of armchairs increases, the:
A)
quantity supplied increases.
B)
supply increases.
C)
quantity supplied decreases.
D)
supply decreases.
61.
A decrease in supply means:
A)
a shift to the left of the entire supply curve.
B)
a movement down the supply curve as prices go down.
C)
that less will be demanded at every price.
D)
that more will be supplied at every price.
62.
The primary difference between a change in supply and a change in the quantity
supplied is that:
A)
a change in quantity supplied is a movement along the supply curve, while a
change in supply is a shift in the supply curve.
B)
both a change in quantity supplied and a change in supply are movements along the
supply curve, only in different directions.
C)
a change in supply is related to the supply curve, while a change in quantity
supplied is related to shifts in the demand curve that elicit a change in supply.
D)
a change in supply is a movement along the supply curve, while a change in
quantity supplied is a shift in the supply curve.
63.
If the price of a commodity increases, you can expect the:
A)
supply to increase.
B)
quantity supplied to increase.
C)
quantity supplied to decrease.
D)
supply curve to shift to the right.
Page 14
64.
In the market for tacos, each of the following shifts the supply curve to the left
EXCEPT:
A)
an increase in the price of beef.
B)
an increase in the wages of taco shop workers.
C)
fewer taco shops.
D)
a decrease in the price of tacos.
65.
In the local market for coffee, if Joyce's Java and Everyday Joe's coffee shops go out of
business, the _____ curve shifts to the _____.
A)
supply; right
B)
demand; left
C)
supply; left
D)
demand; right
66.
Which of the following is NOT a determinant of supply?
A)
expectations regarding future prices
B)
the technology of production
C)
the cost of production
D)
consumer tastes
67.
Which of the following influences does NOT shift the supply curve?
A)
people deciding that they want to buy more of the product
B)
a decrease in the price firms expect to receive in the future
C)
a rise in the wages paid to workers
D)
the development of a new production technology
68.
Which of the following will NOT cause an increase in the supply of good X?
A)
an improvement in the technology used to produce good X
B)
a decrease in the price of good Y, a substitute in production
C)
an increase in the price of inputs used to produce good X
D)
a decrease in the price of inputs used to produce good X
69.
Consider the supply curve for cotton shirts. An increase in the price of cotton will:
A)
increase the supply of cotton shirts.
B)
decrease the supply of cotton shirts.
C)
increase the quantity supplied of cotton shirts.
D)
decrease the demand for cotton shirts.
Page 15
70.
Over the past few years, the technology associated with producing flat-panel televisions
has improved. This has led to a(n) _____ in the _____ flat-panel televisions.
A)
increase; supply of
B)
decrease; demand for
C)
decrease; supply of
D)
decrease; quantity supplied of
71.
A technological advance in the production of automobiles will _____ the _____
automobiles.
A)
decrease; demand for
B)
increase; supply of
C)
decrease; demand
D)
decrease; supply of
72.
An increase in the supply of a good is caused by:
A)
input prices rising.
B)
a fall in the price of the good.
C)
an increase in the number of sellers.
D)
expectations of future price increases.
73.
An increase in supply is caused by:
A)
an increase in input prices.
B)
suppliers' expectations of higher prices in the future.
C)
an increase in the price of the good.
D)
a decrease in the price of resources used in production.
74.
A decrease in supply is caused by:
A)
an increase in the price of goods that are used in production.
B)
suppliers' expectations of lower prices in the future.
C)
an advancement in the technology for producing the good.
D)
an increase in the number of producers.
75.
If the price of mozzarella cheese (an ingredient in pizza) declines, there will be:
A)
a decrease in the supply of pizza.
B)
an increase in the supply of pizza.
C)
a decrease in the quantity of pizza supplied.
D)
no change in the supply of pizza.
Page 16
76.
An increase in supply is caused by:
A)
an increase in input prices.
B)
a decrease in the number of sellers in the market.
C)
suppliers' expectations of higher prices in the future.
D)
an advancement in the technology for producing the good.
77.
A decrease in supply is caused by:
A)
a decrease in input prices.
B)
an increase in the number of sellers in the market.
C)
suppliers' expectations of higher prices in the future.
D)
an advancement in the technology for producing the good.
78.
Which of the following would NOT cause the supply curve to shift?
A)
a change in the technology of production
B)
a change in factor costs
C)
a change in the price of the good
D)
a change in suppliers' expectations of future prices
79.
A leftward shift of a supply curve is caused by:
A)
an increase in the number of sellers.
B)
a technological improvement in production.
C)
an increase in the cost of an input.
D)
an increase in the number of buyers.
80.
Which of the following is most likely to shift the supply of milk to the right?
A)
a tax on each gallon of milk produced
B)
an increase in household income, milk being a normal good
C)
a decrease in the price of feed given to dairy cows
D)
the bankruptcy of many small dairy farms
81.
In the market for wheat, if the price of ethanol (which is made from corn, a substitute in
production) increased dramatically, the _____ wheat would _____.
A)
supply of; increase
B)
supply of; decrease
C)
demand for; increase
D)
demand for; decrease
Page 17
Use the following to answer questions 82-87:
Figure: Demand and Supply of Gasoline
82.
(Figure: Demand and Supply of Gasoline) Look at the 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.
83.
(Figure: Demand and Supply of Gasoline) Look at the 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.
84.
(Figure: Demand and Supply of Gasoline) Look at the 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.
Page 18
85.
(Figure: Demand and Supply of Gasoline) Look at the 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
86.
(Figure: Demand and Supply of Gasoline) Look at the 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
87.
(Figure: Demand and Supply of Gasoline) Look at the 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.
Use the following to answer questions 88-93:
Page 19
88.
(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market for
Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.60, the price
will:
A)
not change.
B)
fall to $0.30.
C)
fall to $0.50.
D)
rise to $0.70.
89.
(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market for
Chocolate-Covered Peanuts. The equilibrium quantity and the equilibrium price are
_____ bags and _____.
A)
140; $0.40
B)
175; $0.60
C)
175; $0.80
D)
210; $0.50
90.
(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market for
Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.80, there is
a monthly:
A)
surplus of 140 bags.
B)
shortage of 140 bags.
C)
surplus of 70 bags.
D)
shortage of 70 bags.
91.
(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market for
Chocolate-Covered Peanuts. A surplus of 210 bags of chocolate-covered peanuts exists
if the price is _____ per bag.
A)
$0.90
B)
$0.80
C)
$0.60
D)
$0.40
92.
(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market for
Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.50, there is:
A)
a surplus of 35 bags per month.
B)
a shortage of 35 bags per month.
C)
a surplus of 70 bags per month.
D)
a shortage of 70 bags per month.
Page 20
93.
(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market for
Chocolate-Covered Peanuts. A shortage of 210 bags of chocolate-covered peanuts exists
if the price is _____ per bag.
A)
$0.80
B)
$0.60
C)
$0.40
D)
$0.30
94.
What is the difference between a shortage and scarcity?
A)
Scarcity will almost always exist, but a shortage will exist only if the price is kept
below the equilibrium level.
B)
Scarcity is a result of two or more alternative uses, and quantities of supply and
demand adjusting to flexible prices will create shortages.
C)
A shortage will exist when a good is scarce.
D)
There is no distinction between the two. They are the same thing.
Use the following to answer questions 95-103:
Figure: The Demand and Supply of Wheat
Page 21
95.
(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and Supply
of Wheat. What is the equilibrium price in this wheat market?
A)
$6
B)
$4
C)
$2
D)
$8
96.
(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and Supply
of Wheat. If a price of $10 temporarily exists in this market, a _____ of _____ bushels
will result.
A)
shortage; 10,000
B)
shortage; 8,000
C)
surplus; 8,000
D)
surplus; 4,000
97.
(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and Supply
of Wheat. A price of _____ will result in a _____.
A)
$6; shortage
B)
$8; surplus
C)
$8; shortage
D)
$4; surplus
98.
(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and Supply
of Wheat. If there is an increase in demand of 2,000 bushels at each price, the
equilibrium price and quantity will be _____ and _____ bushels, respectively.
A)
$5; 5,000
B)
$6; 7,000
C)
$7; 7,000
D)
$8; 8,000
99.
(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and Supply
of Wheat. If there is a decrease in supply of 2,000 bushels at each price, the equilibrium
price and quantity will be _____ and _____ bushels, respectively.
A)
$5; 5,000
B)
$7; 5,000
C)
$6; 4,000
D)
$8; 6,000
Page 22
100.
(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and Supply
of Wheat. A temporary price of $2 in this market would result in a _____ of _____
bushels.
A)
surplus; 4,000
B)
shortage; 8,000
C)
shortage; 10,000
D)
surplus; 10,000
101.
(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and Supply
of Wheat. What is the equilibrium quantity in this wheat market?
A)
12,000 bushels
B)
2,000 bushels
C)
10,000 bushels
D)
6,000 bushels
102.
(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and Supply
of Wheat. If a price of $8 temporarily exists in this market, a _____ of _____ bushels
will result.
A)
shortage; 2,000
B)
surplus; 4,000
C)
shortage; 4,000
D)
surplus; 6,000
103.
(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and Supply
of Wheat. A temporary price of $4 in this market would result in a _____ of _____
bushels.
A)
surplus; 4,000
B)
shortage; 2,000
C)
shortage; 4,000
D)
surplus; 2,000
Page 23
Use the following to answer questions 104-105:
Table: The Lemonade Market
Price of Lemonade
(per cup)
Number of Cups
Demanded (QD)
Number of Cups
Supplied (QS)
$0.50
250
25
0.75
200
50
1.00
150
75
1.25
100
100
1.50
50
125
1.75
20
150
104.
(Table: The Lemonade Market) Look at the table The Lemonade Market. If the price of
a cup of lemonade is $1, there will be _____ in the market.
A)
equilibrium
B)
a shortage of 150 cups
C)
a shortage of 75 cups
D)
a surplus of 75 cups
105.
(Table: The Lemonade Market) Look at the table The Lemonade Market. If the price of
lemonade is $1.25 per cup, we expect to see:
A)
a rising price to eliminate the shortage.
B)
a rising price to eliminate the surplus.
C)
a falling price to eliminate the shortage.
D)
a market in equilibrium.
Page 24
Use the following to answer questions 106-109:
Figure: The DVD Rental Market
106.
(Figure: The DVD Rental Market) Look at the figure The DVD Rental Market. The
figure shows the weekend rental market for DVDs in Collegetown. The equilibrium
price for DVD rentals is _____ and the equilibrium quantity is _____.
A)
$5; 50
B)
$3; 30
C)
$9; 90
D)
$6; 40
107.
(Figure: The DVD Rental Market) Look at the figure The DVD Rental Market. If the
rental price of DVDs rises from $5 to $7:
A)
demand will decrease from 50 to 30 rentals per weekend.
B)
the quantity demanded will decrease from 50 to 30 rentals per weekend.
C)
supply will increase from 50 to 70 rentals per weekend.
D)
the quantity supplied will increase from 50 to 60 rentals per weekend.
108.
(Figure: The DVD Rental Market) Look at the figure The DVD Rental Market. At a
rental price of $3, there will be:
A)
equilibrium in the rental market for DVDs.
B)
an increase in demand.
C)
an excess supply of 40 DVD rentals.
D)
an excess demand of 40 DVD rentals.
Page 25
109.
(Figure: The DVD Rental Market) Look at the figure The DVD Rental Market. At a
rental price of $6, there will be:
A)
equilibrium in the rental market for DVDs.
B)
a decrease in demand.
C)
an excess supply of 20 DVD rentals.
D)
an excess demand of 20 DVD rentals.
110.
If the market for buffalo meat is in equilibrium, the price of buffalo meat will probably
_____ in the near future.
A)
increase
B)
not change
C)
decrease
D)
increase considerably
111.
Market equilibrium occurs when:
A)
there is no incentive for prices to change in the market.
B)
quantity demanded equals quantity supplied.
C)
the market clears.
D)
there is no incentive for prices to change in the market, quantity demanded equals
quantity supplied, and the market clears.
112.
The market equilibrium is found at the:
A)
price where quantity demanded exceeds quantity supplied.
B)
price where quantity demanded equals quantity supplied.
C)
price where quantity supplied exceeds quantity demanded.
D)
highest price the market will bear.
113.
Suppose the equilibrium price of good Y is $5 and the equilibrium quantity is 150 units.
If the price of good Y is $12:
A)
the quantity demanded will be greater than 150 units.
B)
the quantity supplied will be less than 150 units.
C)
there will be an excess demand for good Y.
D)
there will be an excess supply of good Y.
114.
Excess supply occurs when:
A)
the price is above the equilibrium price.
B)
the quantity demanded exceeds the quantity supplied.
C)
the price is below the equilibrium price.
D)
the quantity demanded exceeds the quantity supplied and the price is below the
equilibrium price.
Page 26
115.
If in a competitive market the quantity supplied exceeds the quantity demanded, we
expect prices to:
A)
stay the same.
B)
rise.
C)
fall.
D)
rise to clear the market.
116.
If the quantity of housing supplied in a community is greater than the quantity of houses
demanded, the existing price:
A)
is above the market equilibrium price.
B)
will rise to clear the market.
C)
will either rise or remain unchanged.
D)
is below the market equilibrium price.
117.
If the supply and demand curves intersect at $47, then any price above that would result
in:
A)
a shortage.
B)
a surplus.
C)
equilibrium.
D)
an increase in demand.
118.
If the supply and demand curves intersect at $14, then any price below that would result
in:
A)
a shortage.
B)
a surplus.
C)
equilibrium.
D)
an increase in demand.
119.
Suppose the equilibrium price of good X is $25 and the equilibrium quantity is 124
units. If the price of good X is $2:
A)
there will be excess demand for good X.
B)
there will be an excess supply of good X.
C)
the market will clear.
D)
the quantity demanded of good X will be less than 124 units.
Page 27
120.
The _____ tomatoes will decrease if fertilizer prices rise.
A)
demand for
B)
quantity demanded of
C)
supply of
D)
equilibrium price of
121.
Which of the following will raise the price of milk?
A)
a shift to the right of the supply curve for milk
B)
a shift to the right of the demand curve for milk
C)
an increase in the number of milk suppliers
D)
a decrease in the number of milk buyers
Use the following to answer questions 122-126:
Figure: Four Markets for DVDs
Page 28
122.
(Figure: Four Markets for DVDs) Look at the figure Four Markets for DVDs. If D1 or S1
is the original curve and D2 or S2 is the new curve, which of the graphs illustrates what
may happen in the market for DVDs if there is an increase in the cost of a movie ticket
at the local theater?
A)
A
B)
B
C)
C
D)
D
123.
(Figure: Four Markets for DVDs) Look at the figure Four Markets for DVDs. 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 DVDs supplied?
A)
A
B)
B
C)
C
D)
D
124.
(Figure: Four Markets for DVDs) Look at the figure Four Markets for DVDs. Which of
the graphs illustrates what may happen in the market for DVDs if D1 or S1 is the original
curve and D2 or S2 is the new curve and if the cost of producing DVDs falls?
A)
A
B)
B
C)
C
D)
D
125.
(Figure: Four Markets for DVDs) Look at the figure Four Markets for DVDs. Which of
the graphs shows what may happen in the market for DVDs if D1 or S1 is the original
curve and D2 or S2 is the new curve and if the cost of producing DVD players increases?
A)
A
B)
B
C)
C
D)
D
126.
(Figure: Four Markets for DVDs) Look at the figure Four Markets for DVDs. 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 stores that rent DVDs close?
A)
A
B)
B
C)
C
D)
D
Page 29
Use the following to answer questions 127-132:
Figure: Shifts in Demand and Supply
127.
(Figure: Shifts in Demand and Supply) Look at the figure Shifts in Demand and Supply.
The figure shows how supply and demand might shift in response to specific events.
Suppose consumer incomes increase. Which panel BEST describes how this will affect
the market for used furniture, an inferior good?
A)
panel A
B)
panel B
C)
panel C
D)
panel D
128.
(Figure: Shifts in Demand and Supply) Look at the 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
Page 30
129.
(Figure: Shifts in Demand and Supply) Look at the 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
130.
(Figure: Shifts in Demand and Supply) Look at the 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
131.
(Figure: Shifts in Demand and Supply) Look at the 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
132.
(Figure: Shifts in Demand and Supply) Look at the 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
Page 31
Use the following to answer questions 133-139:
Figure: Shifts in Demand and Supply II
133.
(Figure: Shifts in Demand and Supply II) Look at the figure Shifts in Demand and
Supply II. The graph shows how supply and demand might shift in response to specific
events. Suppose consumer incomes decrease. Which panel BEST describes how this
will affect the market for used clothing, an inferior good?
A)
panel A
B)
panel B
C)
panel C
D)
panel D
134.
(Figure: Shifts in Demand and Supply II) Look at the 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 32
135.
(Figure: Shifts in Demand and Supply II) Look at the 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
136.
(Figure: Shifts in Demand and Supply II) Look at the 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
137.
(Figure: Shifts in Demand and Supply II) Look at the 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
138.
(Figure: Shifts in Demand and Supply II) Look at the 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 33
139.
(Figure: Shifts in Demand and Supply II) Look at the 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
Use the following to answer questions 140-144:
Figure: Shifts in Demand and Supply III
140.
(Figure: Shifts in Demand and Supply III) Look at the figure Shifts in Demand and
Supply III. The figure shows how supply and demand might shift in response to specific
events. Suppose consumer incomes increase. Which panel BEST describes how this will
affect the market for designer boots, a normal good?
A)
panel A
B)
panel B
C)
panel C
D)
panel D
Page 34
141.
(Figure: Shifts in Demand and Supply III) Look at the 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
142.
(Figure: Shifts in Demand and Supply III) Look at the 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 percent.
Which panel BEST describes how this will affect the market for corn?
A)
panel A
B)
panel B
C)
panel C
D)
panel D
143.
(Figure: Shifts in Demand and Supply III) Look at the 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
144.
(Figure: Shifts in Demand and Supply III) Look at the 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 35
Use the following to answer questions 145-150:
Figure: Shifts in Demand and Supply IV
145.
(Figure: Shifts in Demand and Supply IV) Look at the figure Shifts in Demand and
Supply IV. The figure shows how supply and demand might shift in response to specific
events. Suppose consumer incomes increase. Which panel BEST describes how this will
affect the market for big-screen televisions, a normal good?
A)
panel A
B)
panel B
C)
panel C
D)
panel D
146.
(Figure: Shifts in Demand and Supply IV) Look at the 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
Page 36
147.
(Figure: Shifts in Demand and Supply IV) Look at the 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
148.
(Figure: Shifts in Demand and Supply IV) Look at the 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
149.
(Figure: Shifts in Demand and Supply IV) Look at the 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
150.
(Figure: Shifts in Demand and Supply IV) Look at the 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
Page 37
Use the following to answer questions 151-153:
Figure: Supply and Demand in the Orange Juice Market
151.
(Figure: Supply and Demand in the Orange Juice Market) Look at the figure Supply and
Demand in the Orange Juice Market. The market is currently in equilibrium at point C.
Suppose a hurricane hits Florida, where oranges are grown. What will be the most likely
new equilibrium point in the orange juice market?
A)
A
B)
B
C)
D
D)
E
152.
(Figure: Supply and Demand in the Orange Juice Market) Look at the 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
153.
(Figure: Supply and Demand in the Orange Juice Market) Look at the 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
Page 38
154.
Which of the following 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
155.
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.
156.
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.
157.
In the market for tacos, 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.
158.
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.
Page 39
159.
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)
a decrease in buyers' incomes.
B)
an increase in buyers' incomes.
C)
an increase in production costs.
D)
a decrease in production costs.
160.
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.
161.
For consumers, pizza and hamburgers are substitutes. A rise in the price of a pizza
causes _____ in the equilibrium price of a hamburger and _____ in the equilibrium
quantity of hamburgers.
A)
a rise; an increase
B)
a rise; a decrease
C)
a fall; an increase
D)
a fall; a decrease
162.
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
163.
A new wonder diet that results in a dramatic weight loss sweeps through the United
States. The key to the diet is to eat unlimited 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
Page 40
164.
A new wonder diet that results in a dramatic weight loss sweeps through the United
States. The key to the diet is to eat unlimited 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; curve lower
165.
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.
166.
An increase in demand with no change in supply will lead to _____ in equilibrium
quantity and _____ in equilibrium price.
A)
an increase; an increase
B)
an increase; a decrease
C)
a decrease; an increase
D)
a decrease; a decrease
167.
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 relative price of french fries _____ and the equilibrium quantity _____.
A)
rises; increases
B)
rises; decreases
C)
falls; increases
D)
falls; decreases
168.
A decrease in demand with no change in supply will lead to _____ in equilibrium
quantity and _____ in equilibrium price.
A)
an increase; an increase
B)
an increase; a decrease
C)
a decrease; an increase
D)
a decrease; a decrease
Page 41
169.
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 most likely 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.
170.
An increase in demand, all other things unchanged, will result in _____ in equilibrium
price and _____ in equilibrium quantity.
A)
an increase; an increase
B)
a decrease; a decrease
C)
a decrease; an increase
D)
an increase; a decrease
171.
A decrease in supply with no change in demand will lead to _____ in equilibrium
quantity and _____ in equilibrium price.
A)
an increase; an increase
B)
an increase; a decrease
C)
a decrease; an increase
D)
a decrease; a decrease
172.
An increase in supply with no change in demand will lead to _____ in equilibrium
quantity and _____ in equilibrium price.
A)
an increase; an increase
B)
an increase; a decrease
C)
a decrease; an increase
D)
a decrease; a decrease
173.
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
Page 42
174.
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.
175.
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.
176.
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.
177.
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.
178.
The market for corn is in equilibrium. Which of the following 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
Page 43
179.
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
180.
Suppose the input costs associated with manufacturing hair replacement treatments
decrease over time. This would lead to:
A)
an increase in the supply of such treatments, lower prices, and an increase in the
equilibrium quantity.
B)
a decrease in quantity supplied and lower prices.
C)
an increase in demand and higher prices.
D)
a decrease in the supply of such treatments, higher prices, and a decrease in the
equilibrium quantity.
181.
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
182.
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.
183.
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
Page 44
184.
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 _____ pressure on gas prices.
A)
right; supply; eased
B)
left; supply; increased
C)
right; demand; increased
D)
left; demand; eased
185.
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
186.
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:
A)
the equilibrium price and quantity of milk will rise.
B)
the equilibrium price and quantity of milk will fall.
C)
the equilibrium quantity of milk will rise, but we can't determine how the
equilibrium price will be affected.
D)
the equilibrium price of milk will rise, but we can't determine how the equilibrium
quantity will be affected.
187.
Consider the market for iPods. What happens if a fantastic new alternative MP3 player
is developed and at the same time a boat carrying a large shipment of iPods 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.
188.
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.
Page 45
189.
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
190.
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
191.
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
192.
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
Page 46
193.
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
194.
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.
195.
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.
196.
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.
197.
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
Page 47
198.
A decrease in demand and a decrease in supply will lead to _____ in equilibrium
quantity and _____ in equilibrium price.
A)
a decrease; an indeterminate change
B)
an indeterminate change; an increase
C)
an indeterminate change; a decrease
D)
an increase; an indeterminate change
199.
An increase in demand and a decrease in supply will lead to _____ in equilibrium
quantity and _____ in equilibrium price.
A)
a decrease; a decrease
B)
an indeterminate change; an increase
C)
an indeterminate change; a decrease
D)
an increase; an indeterminate change
200.
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.
201.
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
202.
It is 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.
203.
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.
Page 48
204.
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.
Use the following to answer questions 205-209:
Figure: Demand for Coconuts
205.
(Figure: Demand for Coconuts) Look at the figure Demand for Coconuts. If coconuts
are a normal good and the price of coconuts increases, it will be represented in the
figure as a movement from:
A)
A to B.
B)
B to A.
C)
C to A.
D)
E to B.
206.
(Figure: Demand for Coconuts) Look at the figure Demand for Coconuts. If fish is a
substitute good for coconuts and the price of fish increases, it will be represented in the
figure as a movement from:
A)
A to C.
B)
B to A.
C)
C to A.
D)
B to E.
Page 49
207.
(Figure: Demand for Coconuts) Look at the figure Demand for Coconuts. If coconuts
are a normal good and the income level of consumers falls, it will be represented in the
figure as a movement from:
A)
A to C.
B)
B to A.
C)
C to A.
D)
E to B.
208.
(Figure: Demand for Coconuts) Look at the figure Demand for Coconuts. If there is an
increase in preference for coconuts, it will be represented in the figure as a movement
from:
A)
A to C.
B)
B to A.
C)
C to A.
D)
B to E.
209.
(Figure: Demand for Coconuts) Look at the figure Demand for Coconuts. If coconuts
are a normal good and consumers believe that the price of coconuts will rise
significantly in the near future, it will be represented in the figure as a movement from:
A)
C to A.
B)
A to B.
C)
B to E.
D)
E to B.
Use the following to answer questions 210-213:
Page 50
210.
(Table: The Demand for Chocolate-Covered Peanuts) Look at the table The Demand for
Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.60, the
quantity demanded by George is _____ bags per month.
A)
10
B)
15
C)
25
D)
30
211.
(Table: The Demand for Chocolate-Covered Peanuts) Look at the table The Demand for
Chocolate-Covered Peanuts. Barbara demands 20 bags of chocolate-covered peanuts
when the price of each bag is:
A)
$0.90.
B)
$0.80.
C)
$0.70.
D)
$0.60.
212.
(Table: The Demand for Chocolate-Covered Peanuts) Look at the table The Demand for
Chocolate-Covered Peanuts. If George, Barbara, and Dan are the only three buyers in
the market and the price of a bag of chocolate-covered peanuts is $0.80, the total market
quantity demanded is _____ bags per month.
A)
70
B)
80
C)
105
D)
280
213.
(Table: The Demand for Chocolate-Covered Peanuts) Look at the table The Demand for
Chocolate-Covered Peanuts. If George, Barbara, and Dan are the only three buyers in
the market and the price of a bag of chocolate-covered peanuts is $0.50, the total market
quantity demanded is _____ bags per month.
A)
80
B)
105
C)
210
D)
280
Page 51
Use the following to answer questions 214-216:
Figure: Demand for DVDs
214.
(Figure: Demand for DVDs) Look at the figure Demand for DVDs. A decrease in the
rental price of DVD would result in a change illustrated by the move from:
A)
f to g in panel A.
B)
h to i in panel B.
C)
j to k in panel C.
D)
l to m in panel D.
215.
(Figure: Demand for DVDs) Look at the figure Demand for DVDs. A decrease in the
price of DVD players (a complement) would result in a change illustrated by the move
from:
A)
f to g in panel A.
B)
h to i in panel B.
C)
j to k in panel C.
D)
l to m in panel D.
Page 52
216.
(Figure: Demand for DVDs) Look at the figure Demand for DVDs. A decrease in the
price of movie tickets (a substitute) would result in a change illustrated by the move
from:
A)
f to g in panel A.
B)
h to i in panel B.
C)
j to k in panel C.
D)
l to m in panel D.
217.
When milk prices increased in 2008, one milk consumer stated that the reason he cut
down on milk consumption was so that he could drive his car. This action represents a:
A)
movement along the demand curve for milk.
B)
movement along the supply curve for milk.
C)
shift of the demand curve for milk.
D)
shift of the supply curve for milk.
218.
A decrease in the price of eggs will result in:
A)
an increase in the demand for eggs.
B)
an increase in the supply of eggs.
C)
a shift in the supply curve for eggs.
D)
a movement along the demand curve for eggs.
219.
A decrease in the price of a good will result in:
A)
an increase in demand.
B)
an increase in supply.
C)
an increase in the quantity demanded.
D)
an increase in the quantity supplied.
220.
If the price of corn rises, we expect:
A)
the quantity of corn demanded to rise.
B)
the quantity of corn supplied to rise.
C)
the demand for corn to shift inward.
D)
the supply of corn to shift outward.
221.
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
Page 53
222.
The market for soybeans is initially in equilibrium. Because of mad cow disease,
producers decide to replace bone meal with soybeans in cattle feed. The likely effect is
that:
A)
the equilibrium price and quantity of soybeans will rise.
B)
the equilibrium price and quantity of soybeans will fall.
C)
the equilibrium quantity of soybeans will rise, but we can't determine what will
happen to the equilibrium price.
D)
the equilibrium price of soybeans will rise, but we can't determine what will
happen to the equilibrium quantity.
223.
An increase in _____ will have an ambiguous (uncertain) effect on price.
A)
tastes and preferences
B)
the price of a substitute
C)
the price of a complement
D)
income
224.
Which of the following would result in a movement along the demand curve?
A)
a change in preferences
B)
an increase in the number of buyers
C)
an increase in the number of suppliers
D)
a decrease in income
225.
A competitive market occurs when there are many buyers and sellers of the same good.
A)
True
B)
False
226.
The demand curve for season tickets for the Miami Dolphins is the graphical
representation of the number of season tickets consumers want to buy at any given
price.
A)
True
B)
False
227.
An increase in demand for good X can be caused by a decrease in the price of X.
A)
True
B)
False
Page 54
228.
The terms decrease in demand and decrease in quantity demanded can be used
interchangeably.
A)
True
B)
False
229.
According to the law of demand, if the price of steak increases in Rhode Island, the
demand for steak will decrease in Rhode Island.
A)
True
B)
False
230.
An increase in income will always shift the demand curve to the right.
A)
True
B)
False
231.
If coffee and tea are viewed as substitutes in consumption, then an increase in the price
of coffee will increase the demand for tea.
A)
True
B)
False
232.
After graduation many students' demand for used cars decreases. This may be because
used cars are considered a normal good to college graduates.
A)
True
B)
False
233.
The supply curve for apartments in Oregon reflects how many apartments landlords are
willing and able to offer for rent at a specific price.
A)
True
B)
False
234.
An increase in the price of contact lenses will increase the supply of contact lenses.
A)
True
B)
False
235.
A major input into vanilla ice cream is cream. An increase in the price of cream will
reduce the quantity of vanilla ice cream supplied, but it will not reduce the supply of
vanilla ice cream.
A)
True
B)
False
Page 55
236.
If the input costs associated with supplying gasoline increases in Wisconsin, the supply
of gasoline in Wisconsin will decrease.
A)
True
B)
False
237.
If there is an excess supply of a good, the problem of scarcity does not apply to that
good.
A)
True
B)
False
238.
Suppose there is an excess supply of chemical engineers in India. Over time, the salaries
for chemical engineers will fall in India.
A)
True
B)
False
Use the following to answer questions 239-240:
Figure: Supply, Demand, and Equilibrium
239.
(Figure: Supply, Demand, and Equilibrium) Look at the figure Supply, Demand, and
Equilibrium. In the figure, there will be an excess supply of the good at a price of P1.
A)
True
B)
False
240.
(Figure: Supply, Demand, and Equilibrium) Look at the figure Supply, Demand, and
Equilibrium. In the figure, there will be excess demand for the good at a price of P3.
A)
True
B)
False
Page 56
241.
Suppose there is an excess demand for water in Florida. This means that we can expect
the price of water to increase in Florida over time.
A)
True
B)
False
242.
If consumer tastes for electric cars increase over the next 10 years, we will see an
increase in the demand for electric cars, higher electric car prices, and an increase in the
equilibrium quantity of electric cars.
A)
True
B)
False
243.
“In 2008, air travel decreased substantially despite significant reductions in ticket
prices.” If this information is correct, it indicates that the law of demand did not apply to
air travel in 2008.
A)
True
B)
False
244.
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
245.
Apple and Samsung are large corporations that produce smart phones, the iPhone and
the Galaxy, respectively. They are constantly trying through expensive advertising and
product innovations to persuade customers to buy their brand. Is the smart phone market
a competitive in the economic sense defined in Chapter 3? Why or why not?
246.
Explain the law of demand. What does it tell us about the shape of a demand curve?
247.
Why are economists so particular about the difference between an increase in quantity
demanded and an increase in demand? Aren't they the same thing?
248.
A small private college increases tuition while a large public university in the same state
does not. What will happen to the demand (enrollment) for both schools?
Page 57
249.
How would each of the following events affect the demand for new textbooks?
I. The price of a used textbook rises.
II. The price of college tuition rises.
III. More high school graduates decide to attend college.
250.
In the following cases, explain what happens to demand or quantity demanded and how
the change would be shown on a graph of the demand schedule.
I. Assuming that tickets to an NFL game are normal goods, what is the effect of an
increase in the incomes of NFL fans?
II. Assuming that Direct TV and Dish satellite are substitutes, what happens if the
price of a Direct TV subscription increases?
III. Assuming that data plans and cell phones are complements, what happens if the
price of data plans decreases?
251.
Suppose the supply curve for soap bubbles has a slope of +1 and intersects the vertical
axis at a price of $2 per bottle. Interpret the meaning of both the y-intercept and the
slope.
252.
How would each of the following events affect the supply of compact cars?
I. The price of steel rises.
II. The production technology for car manufacturing improves.
III. The price of sport utility vehicles falls.
253.
Why do many clothing stores have big after-Christmas sales on their merchandise?
254.
You read that college tuition is rising every year, and yet more students attend college
every year. Isn't this a violation of the law of demand?
255.
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?
256.
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?
Page 58
257.
Markets that are characterized by many buyers and many sellers are:
A)
inefficient.
B)
competitive.
C)
foreign.
D)
monopolies.
258.
Alice goes to the local supermarket to purchase one package of her favorite taco shells.
She often pays $1.50 for a package, but she finds they are on sale for $1 each.
According to the law of demand, one can expect Alice to:
A)
purchase an alternative good.
B)
purchase more than one package of taco shells.
C)
decide not to purchase taco shells on this visit.
D)
buy only one package of taco shells.
259.
_____ manifests when the price of a good increases and the quantity demanded
decreases
A)
Efficiency
B)
The law of demand
C)
The supply schedule
D)
The production possibilities frontier
260.
Recent research suggests that certain plastic containers may have cancer-causing
elements in them. As a result of this research, one would expect:
A)
the demand for such containers to decrease.
B)
the quantity demanded for such containers to increase.
C)
no effect.
D)
the price of the containers to change because of a movement along the demand
curve.
261.
Good X and good Y are related. If the price of good X increases and the demand for
good Y shifts left, these goods are:
A)
complements.
B)
substitutes.
C)
inferior.
D)
normal.
Page 59
262.
Suppose oranges and clementines are considered to be substitutes. Holding everything
else constant, if the price of oranges increases, then the demand for _____ will _____.
A)
clementines; increase
B)
clementines; decrease
C)
oranges; increase
D)
oranges; decrease
263.
Good X and good Y are related goods. Holding everything else constant, if the price of
X decreases and the demand for Y increases, X and Y are probably:
A)
complements.
B)
substitutes.
C)
inferior.
D)
normal.
264.
Good X and good Y are substitutes. Holding all other things constant, this means that
when the price of good X increases, the:
A)
demand for good X will increase.
B)
demand for good Y will increase.
C)
demand for both good X and good Y will increase.
D)
demand for good Y will decrease.
265.
Holding all other things constant, if ramen noodles are an inferior good to Vanessa, then
as her income increases, her demand curve for ramen noodles:
A)
will shift left.
B)
will shift right.
C)
will not shift at all.
D)
may shift left or right, but we're not sure by how much.
266.
If Benjamin considers sushi to be a normal good and if his income increases by 20
percent, his purchases of sushi will:
A)
decrease by 20 percent.
B)
increase.
C)
decrease.
D)
not change.
267.
The demand for a good will increase if:
A)
there is a decrease in the price of the good.
B)
the price of inputs needed in the production of the good decrease.
C)
there is an increase in the number of consumers in this market.
D)
the price of a complementary good increases.
Page 60
268.
A market is composed of three individuals, Nicholas, Benjamin, and Alexander. Their
individual demand schedules are given below and are as follows:
Based on this information, which of the following market demand schedules accurately
portrays this market?
A)
B)
C)
D)
Page 61
269.
The horizontal summation of individual demand curves for a particular product, holding
the quantity demanded constant, is:
A)
market demand.
B)
market supply.
C)
complements in production.
D)
substitutes in production.
270.
Milk is an important ingredient in the production of ice cream. If the price of milk
increases, then one would expect, holding all other things constant:
A)
the supply curve for ice cream to shift left.
B)
the supply curve for ice cream to shift right.
C)
no change in the supply curve for ice cream.
D)
a movement along the supply curve for ice cream curve, resulting in more ice
cream supplied.
271.
High-fructose corn syrup, which is derived from corn, is an important ingredient in the
production of many soft drinks. If the price of corn increases, one would expect:
A)
the supply curve for soft drinks to shift left.
B)
the quantity supplied of soft drinks to increase.
C)
the demand for soft drinks to increase.
D)
the supply curve for soft drinks to shift right.
272.
All of the following would result in an increase in the supply of a good EXCEPT:
A)
a decrease in input prices.
B)
a beneficial technological change.
C)
an increase in the number of suppliers.
D)
an increase in input prices.
273.
A farmer finds that when he produces more corn, he also has more cornstalks that he
can sell as decorations. To the farmer, corn and cornstalks are:
A)
complements in production.
B)
substitutes in production.
C)
unrelated goods.
D)
inferior goods.
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274.
Substitutes in production suggest that a producer with a fixed set of resources initially
will need to reduce production of one good when the producer:
A)
produces less of the other good.
B)
produces more of the other good.
C)
has an increase in resources.
D)
produces more of the other good and has an increase in resources.
275.
Researchers find a new strain of genetically modified seeds that results in a higher yield
for corn producers. Holding all other things constant, this research will:
A)
shift the supply curve for corn left.
B)
increase the quantity supplied of corn.
C)
decrease the quantity supplied of corn.
D)
shift the supply curve for corn to the right.
276.
If suppliers expect prices for their product to rise next year, then one would expect:
A)
a shift in the demand curve for the product this year.
B)
a decrease in the quantity demanded this year.
C)
a shift to the left in the supply curve for the product this year.
D)
a shift to the right in the supply curve for the product this year.
277.
The market for good Y, a perfectly competitive good, is made up of 15 producers who
each produce the same amount of good Y. If the price of good Y is $100 and the total
quantity supplied is 150, how many units of good Y is each producer supplying?
A)
10
B)
150
C)
100
D)
15
Use the following to answer questions 278-282:
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278.
(Table: Competitive Market for Good Z) Look at the table Competitive Market for
Good Z. If the price of good Z is $15, there will be:
A)
excess demand of 25 units.
B)
excess supply of 25 units.
C)
a shortage of 20 units.
D)
a surplus of 45 units.
279.
(Table: Competitive Market for Good Z) Look at the table Competitive Market for
Good Z. A surplus of the good will occur at a price of
A)
$0.
B)
$5.
C)
$10.
D)
$15.
280.
(Table: Competitive Market for Good Z) Look at the table Competitive Market for
Good Z. The equilibrium price and quantity in this market are, respectively:
A)
$5 and 40 units.
B)
$20 and 60 units.
C)
$10 and 30 units.
D)
$15 and 20 units.
281.
(Table: Competitive Market for Good Z) Look at the table Competitive Market for
Good Z. If the demand curve for good Z is linear, it can be expressed as:
A)
Qd = 3P.
B)
Qd = 50 – 2P.
C)
Qd = Qs.
D)
Qd = 100 – 2P.
282.
(Table: Competitive Market for Good Z) Look at the table Competitive Market for
Good Z. If the supply curve for good Z is linear, it can be expressed as:
A)
Qs = 3P.
B)
Qs = 50 – 2P.
C)
Qs = 100 – 2P.
D)
Qs = Qd
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Use the following to answer questions 283-284:
Figure: The Market for Candy
283.
(Figure: The Market for Candy) Look at the figure The Market for Candy. Equilibrium
occurs at a price of _____, and the equilibrium quantity is equal to _____.
A)
P1; Q5
B)
P2; Q3
C)
P3; Q2
D)
P1; Q3
284.
(Figure: The Market for Candy) Look at the figure The Market for Candy. A surplus of
the good will exist at a price of:
A)
P1.
B)
P2.
C)
P3.
D)
There are no surpluses in this market.
285.
When a market is in equilibrium, the quantity:
A)
demanded is equal to zero.
B)
demanded is equal to quantity supplied.
C)
demanded is greater than quantity supplied.
D)
supplied is zero.
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286.
Suppose people expect the price of MP3 players to rise next year. As a result of this
expectation, people will most likely:
A)
purchase fewer MP3 players this year.
B)
observe higher prices for MP3 players this year.
C)
purchase the same amount of MP3 players, since this expectation will have no
effect on consumers this year.
D)
decide to wait and purchase the MP3 players next year.
287.
Suppose the demand curve for good Z is downward-sloping. If the price of good Z
decreases because of a shift in supply, this will cause:
A)
an increase in the demand for good Z.
B)
a movement along the demand curve of good Z.
C)
no effect on the quantity demanded of good Z.
D)
fewer people to purchase good Z.
288.
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 result in which of the
following 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.
289.
Because of an increase in the price of wheat, an important ingredient in the production
of bread, combined with 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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290.
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
291.
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)
rise, fall, or stay the same; rise
B)
rise; fall
C)
fall; fall
D)
rise; fall, rise, or stay the same
292.
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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Answer Key
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