Question 1

The price of jet fuel falls.This fall shifts the

Accepted Answer

A)   demand curve for airplane trips rightward.
B)   demand curve for airplane trips leftward.
C)   supply curve of airplane trips rightward.
D)   supply curve of airplane trips leftward.E) A) and B)
F) A) and C)

Question 2

People buy more of good 1 when the price of good 2 rises.These goods are

Accepted Answer

A)   complements.
B)   substitutes.
C)   normal goods.
D)   inferior goods.E) B) and D)
F) A) and B)

Question 3

Gruel is an inferior good.Hence,a decrease in people's incomes

Accepted Answer

A)   shifts the supply curve of gruel leftward.
B)   decreases the quantity of gruel supplied.
C)   shifts the demand curve for gruel rightward.
D)   shifts the demand curve for gruel leftward.E) B) and C)
F) None of the above

Question 4

-The above figures show the market for hamburger meat.Which figure shows the effect when more farmers decide to raise cows that are processed into hamburger meat?

Accepted Answer

A)   Figure A
B)   Figure B
C)   Figure C
D)   Figure DE) C) and D)
F) A) and D)

Question 5

If technological advances lower the cost of computer chips,in the market for computers the equilibrium price will ________ and the equilibrium quantity will ________.

Accepted Answer

A)   fall; increase
B)   fall; decrease
C)   rise; increase
D)   rise; decreaseE) B) and C)
F) A) and C)

Question 6

-The figure illustrates the market for pens.The equilibrium quantity is

Accepted Answer

A)   between 400 and 600 pens, but it is impossible to be precise.
B)   5 pens a month.
C)   2 pens a month.
D)   500 pens a month.E) B) and C)
F) None of the above

Question 7

A normal good is one

Accepted Answer

A)   with a downward sloping demand curve.
B)   for which demand increases when the price of a substitute rises.
C)   for which demand increases when income increases.
D)   none of the aboveE) C) and D)
F) B) and C)

Question 8

How does an unusually warm winter affect the equilibrium price and quantity of gloves?

Accepted Answer

A)   It raises both the price and the quantity.
B)   It raises the price and decreases the quantity.
C)   It lowers the price and increases the quantity.
D)   It lowers both the price and the quantity.E) A) and B)
F) B) and C)

Question 9

If demand increases and supply decreases,what is the effect on equilibrium price and equilibrium quantity?

Accepted Answer

A)   The price falls and the quantity might increase, decrease, or remain the same.
B)   The price rises and the quantity might increase, decrease or remain the same.
C)   The quantity decreases and the price might rise, fall, or remain the same.
D)   The quantity increases and the price might rise, fall, or remain the same.E) C) and D)
F) A) and D)

Question 10

Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers.The equilibrium price of beef will

Accepted Answer

A)   fall.
B)   perhaps rise, fall, or stay the same, but more information is needed to determine which it does.
C)   stay the same.
D)   rise.E) B) and D)
F) A) and B)

Question 11

At a price of $10 in the above figure,there is

Accepted Answer

A)   a surplus of 200 units.
B)   a shortage of 200 units.
C)   a surplus of 400 units.
D)   a shortage of 400 units.E) B) and D)
F) None of the above

Question 12

A normal good is a good for which demand

Accepted Answer

A)   decreases when income increases.
B)   increases when income increases.
C)   decreases when population increases.
D)   increases when population increases.E) None of the above
F) A) and C)

Question 13

The quantity supplied of a good or service is the amount that

Accepted Answer

A)   producers wish they could sell at a higher price.
B)   is actually bought during a given time period at a given price.
C)   people are willing to buy during a given time period at a given price.
D)   producers plan to sell during a given time period at a given price.E) A) and B)
F) A) and C)

Question 14

An ice cream cone costs $1.50.A can of soda costs $0.75.The relative price of an ice cream cone is

Accepted Answer

A)   1/2 can of soda per ice cream cone, the opportunity cost of an ice cream cone.
B)   $1.50, the opportunity cost of a can of soda.
C)   2 cans of soda per soda, the opportunity cost of an ice cream cone.
D)   $0.75, the opportunity cost of a can of soda.E) A) and B)
F) A) and C)

Question 15

Computers are a complement to computer software.Suppose the price of a computer falls.Simultaneously,suppose that the number of companies selling computer software decreases.How do these changes affect the price and quantity of computer software?

Accepted Answer

The fall in the price of a computer incr...

Question 16

Which of the following is consistent with the law of demand?

Accepted Answer

A)   An increase in the price of a DVD causes an increase in the quantity of DVDs demanded.
B)   An increase in the price of a soda causes a decrease in the quantity of soda demanded.
C)   A decrease in the price of a gallon of milk causes a decrease in the quantity of milk demanded.
D)   A decrease in the price of juice causes no change in the quantity of juice demanded.E) A) and B)
F) All of the above

Question 17

The initial supply and demand curves for a good are illustrated in the above figure.If there are technological advances in the production of the good,then the new equilibrium price for the good

Accepted Answer

A)   is less than $6.
B)   is $6.
C)   is more than $6.
D)   could be less than, equal to, or more than $6.E) C) and D)
F) B) and D)

Question 18

By definition,an inferior good is a

Accepted Answer

A)   want that is not expressed by demand.
B)   normal substitute good.
C)   good for which demand decreases when its price rises.
D)   good for which demand decreases when income increases.E) A) and C)
F) A) and B)

Question 19

Flights to Paris are a normal good and people's incomes rise.At the same time,the price of jet fuel rises.The equilibrium price of a flight to Paris ________ and the equilibrium quantity of flights to Paris ________.

Accepted Answer

A)   might rise, fall, or not change; increases
B)   falls; decreases.
C)   rises; increases
D)   rises; might increase, decrease, or not changeE) B) and C)
F) A) and C)

Question 20

A surplus occurs when the price is

Accepted Answer

A)   less than the equilibrium price.
B)   equal to the equilibrium price.
C)   greater than the equilibrium price.
D)   None of the above because the existence of a surplus is independent of the price of the good.E) B) and D)
F) All of the above

Exam 3: Demand and Supply

How does an unusually warm winter affect the equilibrium price and quantity of gloves?

Correct AnswerverifiedShow Answer

Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers.The equilibrium price of beef will

Correct AnswerverifiedShow Answer

Which of the following is consistent with the law of demand?

Correct AnswerverifiedShow Answer

-The above figures show the market for hamburger meat.Which figure shows the effect when more farmers decide to raise cows that are processed into hamburger meat?

Correct AnswerverifiedShow Answer

A normal good is a good for which demand

Correct AnswerverifiedShow Answer

Flights to Paris are a normal good and people's incomes rise.At the same time,the price of jet fuel rises.The equilibrium price of a flight to Paris ________ and the equilibrium quantity of flights to Paris ________.

Correct AnswerverifiedShow Answer

People buy more of good 1 when the price of good 2 rises.These goods are

Correct AnswerverifiedShow Answer

If technological advances lower the cost of computer chips,in the market for computers the equilibrium price will ________ and the equilibrium quantity will ________.

Correct AnswerverifiedShow Answer

The price of jet fuel falls.This fall shifts the

Correct AnswerverifiedShow Answer

The initial supply and demand curves for a good are illustrated in the above figure.If there are technological advances in the production of the good,then the new equilibrium price for the good

Correct AnswerverifiedShow Answer

Gruel is an inferior good.Hence,a decrease in people's incomes

Correct AnswerverifiedShow Answer

An ice cream cone costs $1.50.A can of soda costs $0.75.The relative price of an ice cream cone is

Correct AnswerverifiedShow Answer

At a price of $10 in the above figure,there is

Correct AnswerverifiedShow Answer

Computers are a complement to computer software.Suppose the price of a computer falls.Simultaneously,suppose that the number of companies selling computer software decreases.How do these changes affect the price and quantity of computer software?

Correct AnswerverifiedThe fall in the price of a computer incr...View AnswerShow Answer

By definition,an inferior good is a

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-The figure illustrates the market for pens.The equilibrium quantity is

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A surplus occurs when the price is

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The quantity supplied of a good or service is the amount that

Correct AnswerverifiedShow Answer

If demand increases and supply decreases,what is the effect on equilibrium price and equilibrium quantity?

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A normal good is one

Correct AnswerverifiedShow Answer

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Flights to Paris are a normal good and people's incomes rise.At the same time,the price of jet fuel rises.The equilibrium price of a flight to Paris and the equilibrium quantity of flights to Paris .

Correct Answer
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Correct Answer
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If technological advances lower the cost of computer chips,in the market for computers the equilibrium price will and the equilibrium quantity will .

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The fall in the price of a computer incr...
View Answer

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