Question 1

Figure 3-6
 
-Refer to Figure 3-6.The figure above represents the market for coffee grinders.Assume that the market price is $21.Which of the following statement is true?

Accepted Answer

A)  There is a shortage that will cause the price to increase; quantity demanded will then decrease and quantity supplied will increase until the price equals $25.
B)  There is a shortage that will cause the price to increase; quantity supplied will then decrease and quantity demanded will increase until the price equals $25.
C)  There will be a shortage that will cause the price to increase; demand will then decrease and supply will increase until the price equals $25.
D)  There is a shortage that will cause the price to decrease; quantity demanded will then increase and quantity supplied will decrease until the price equals $25.E) A) and B)
F) None of the above

Question 2

In April,market analysts predict that the price of titanium will fall in May.What happens in the titanium market in April,holding everything else constant?

Accepted Answer

A)  The supply curve shifts to the right.
B)  The supply curve shifts to the left.
C)  The quantity demanded and the quantity supplied of titanium increase.
D)  The demand curve shifts to the right.E) A) and C)
F) C) and D)

Question 3

How does the increasing use of digital cameras affect the market for traditional camera film?

Accepted Answer

A)  The demand curve for traditional camera film shifts to the right.
B)  The quantity of traditional camera film demanded decreases.
C)  The quantity of traditional camera film demanded increases.
D)  The demand curve for traditional camera film shifts to the left.E) A) and B)
F) A) and C)

Question 4

An increase in the demand for peanuts due to changes in consumer tastes,accompanied by an increase in the supply of peanuts as a result of favorable growing conditions,will result in

Accepted Answer

A)  an increase in the equilibrium quantity of peanuts and no change in the equilibrium price.
B)  an increase in the equilibrium price of peanuts and no change in the equilibrium quantity.
C)  an increase in the equilibrium price of peanuts; the equilibrium quantity may increase or decrease.
D)  an increase in the equilibrium quantity of peanuts; the equilibrium price may increase or decrease.E) B) and C)
F) All of the above

Question 5

How has the growing popularity of factory outlet stores affected the market for clothing at retail department stores?

Accepted Answer

A)  the demand curve for clothing at retail department stores shifts to the right.
B)  the demand curve for clothing at retail department stores shifts to the left.
C)  the supply curve for clothing at retail department stores shifts to the right.
D)  the supply curve for clothing at retail department stores shifts to the left.E) C) and D)
F) B) and C)

Question 6

Figure 3-1
 
-Refer to Figure 3-1.An increase in population would be represented by a movement from

Accepted Answer

A)  A to B.
B)  B to A.
C)  D₁ to D₂.
D)  D₂ to D₁.E) None of the above
F) B) and D)

Question 7

If,for a product,the quantity supplied exceeds the quantity demanded,the market price will fall until

Accepted Answer

A)  the quantity demanded exceeds the quantity supplied.The market will then be in equilibrium.
B)  quantity demanded equals quantity supplied.The equilibrium price will then be lower than the market price.
C)  all consumers will be able to afford the product.
D)  quantity demanded equals quantity supplied.The market price will then equal the equilibrium price.E) B) and D)
F) B) and C)

Question 8

If the population increases and input prices increase,the equilibrium price of a product will definitely increase.

Accepted Answer

A) True 
 B)False

Question 9

Discuss the correct and incorrect economic analysis in the following statements.
"If a disease kills a large number of turkeys,the supply of turkeys will decrease.This will result in a price increase,which will then cause the supply of turkeys to increase."

Accepted Answer

The supply of turkeys will dec...

Question 10

If the price of prime rib falls,the income effect due to the price change will cause

Accepted Answer

A)  an increase in the demand for prime rib.
B)  an increase in the demand for flank steak, a substitute for prime rib.
C)  an increase in the quantity demanded of prime rib.
D)  an increase in the quantity supplied of prime rib.E) A) and D)
F) A) and C)

Question 11

Which of the following will not shift the demand curve for a good?

Accepted Answer

A)  an increase in population
B)  an increase in the price of the good
C)  a decrease in the price of a substitute good
D)  an increase in consumer incomesE) B) and D)
F) A) and B)

Question 12

If a demand curve shifts to the left,then

Accepted Answer

A)  demand has increased.
B)  quantity demanded has increased.
C)  demand has decreased.
D)  quantity demanded has decreased.E) A) and D)
F) B) and C)

Question 13

Would a change in the price of in-line skates cause a change in the supply of in-line skates? Why or why not?

Accepted Answer

No,a change in the price of in-line skat...

Question 14

A supply curve

Accepted Answer

A)  is a table that shows the relationship between the price of a product and the quantity of the product supplied.
B)  is a curve that shows the relationship between the price of a product and the quantity of the product supplied.
C)  is the relationship between the supply of a good and the cost of producing the good.
D)  is a curve that shows the relationship between the price of a product and the quantity of the product that producers and consumers are willing to exchange.E) A) and D)
F) A) and C)

Question 15

Suppose that when the price of pickles decreases,Teddy increases his purchase of ketchup.To Teddy

Accepted Answer

A)  pickles and ketchup are complements.
B)  pickles and ketchup and substitutes.
C)  pickles and ketchup are normal goods.
D)  pickles are a normal good and ketchup is an inferior good.E) A) and B)
F) B) and C)

Question 16

Figure 3-8
 
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₂ and S₁ (point C)  Which of the following changes would cause the equilibrium to change to point B?

Accepted Answer

A)  A positive change in the technology used to produce motorcycles and decrease in the price of motorcycle insurance, a complement to motorcycles.
B)  An increase in the wages of motorcycle workers and a decrease in the price of motorcycle insurance, a complement to motorcycles.
C)  An increase in the number of motorcycle producers and an increase in the number of consumers who prefer riding motorcycles.
D)  An increase in the wages of motorcycle workers and an increase in the price of motorcycle insurance, a complement to motorcycles.E) All of the above
F) A) and D)

Question 17

Figure 3-4
 
-Refer to Figure 3-4.At a price of $25,how many units will be sold?

Accepted Answer

A)  400
B)  500
C)  600
D)  800E) A) and D)
F) A) and C)

Question 18

If the demand for a product decreases and the supply of the product does not change,equilibrium price and equilibrium quantity will both increase.

Accepted Answer

A) True 
 B)False

Question 19

A positive technological change will cause the quantity supplied of a good to increase.

Accepted Answer

A) True 
 B)False

Question 20

In September,buyers of silver expect that the price of silver will rise in October.What happens in the silver market in September,holding all else constant?

Accepted Answer

A)  The quantity demanded decreases.
B)  The demand curve shifts to the left.
C)  The demand curve shifts to the right.
D)  The quantity demanded increases.E) C) and D)
F) B) and D)

Exam 3: Where Prices Come From: the Interaction of Demand and Supply

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₂ and S₁ (point C) Which of the following changes would cause the equilibrium to change to point B?

Correct AnswerverifiedShow Answer

An increase in the demand for peanuts due to changes in consumer tastes,accompanied by an increase in the supply of peanuts as a result of favorable growing conditions,will result in

Correct AnswerverifiedShow Answer

Would a change in the price of in-line skates cause a change in the supply of in-line skates? Why or why not?

Correct AnswerverifiedNo,a change in the price of in-line skat...View AnswerShow Answer

If the population increases and input prices increase,the equilibrium price of a product will definitely increase.

Correct AnswerverifiedShow Answer

A positive technological change will cause the quantity supplied of a good to increase.

Correct AnswerverifiedShow Answer

In September,buyers of silver expect that the price of silver will rise in October.What happens in the silver market in September,holding all else constant?

Correct AnswerverifiedShow Answer

Discuss the correct and incorrect economic analysis in the following statements. "If a disease kills a large number of turkeys,the supply of turkeys will decrease.This will result in a price increase,which will then cause the supply of turkeys to increase."

Correct AnswerverifiedThe supply of turkeys will dec...View AnswerShow Answer

How does the increasing use of digital cameras affect the market for traditional camera film?

Correct AnswerverifiedShow Answer

If the price of prime rib falls,the income effect due to the price change will cause

Correct AnswerverifiedShow Answer

Figure 3-6 -Refer to Figure 3-6.The figure above represents the market for coffee grinders.Assume that the market price is $21.Which of the following statement is true?

Correct AnswerverifiedShow Answer

Which of the following will not shift the demand curve for a good?

Correct AnswerverifiedShow Answer

A supply curve

Correct AnswerverifiedShow Answer

In April,market analysts predict that the price of titanium will fall in May.What happens in the titanium market in April,holding everything else constant?

Correct AnswerverifiedShow Answer

If,for a product,the quantity supplied exceeds the quantity demanded,the market price will fall until

Correct AnswerverifiedShow Answer

If a demand curve shifts to the left,then

Correct AnswerverifiedShow Answer

Figure 3-4 -Refer to Figure 3-4.At a price of $25,how many units will be sold?

Correct AnswerverifiedShow Answer

If the demand for a product decreases and the supply of the product does not change,equilibrium price and equilibrium quantity will both increase.

Correct AnswerverifiedShow Answer

Figure 3-1 -Refer to Figure 3-1.An increase in population would be represented by a movement from

Correct AnswerverifiedShow Answer

Suppose that when the price of pickles decreases,Teddy increases his purchase of ketchup.To Teddy

Correct AnswerverifiedShow Answer

How has the growing popularity of factory outlet stores affected the market for clothing at retail department stores?

Correct AnswerverifiedShow Answer

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No,a change in the price of in-line skat...
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The supply of turkeys will dec...
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