Question 1

A technological improvement lowers the cost of producing corn.As a result,the price of a pound of corn ________ and the quantity of corn ________.

Accepted Answer

A)   rises; increases
B)   rises; decreases
C)   falls; increases
D)   falls; decreases
E)   falls; does not change

Question 2

A competitive market is in equilibrium.Then there is an increase in demand and an increase in supply.The equilibrium price ________,and the equilibrium quantity ________.

Accepted Answer

A)   rises; increases
B)   perhaps changes but we can't say if it rises, falls, or stays the same; does not change
C)   falls; increases
D)   perhaps changes but we can't say if it rises, falls, or stays the same; increases
E)   falls; perhaps changes but we can't say if it increases, decreases, or stays the same

Question 3

Which of the following increases the demand for a good?

Accepted Answer

A)   a rise in the price of a complement
B)   the expectation that future income will be higher
C)   an increase in income, assuming the good is an inferior good
D)   a decrease in the number of buyers
E)   a fall in the price of a substitute

Question 4

-The table above shows the situation in the gasoline market in Tulsa,Oklahoma.If the price of a gallon of gasoline is $3.62,then

Accepted Answer

A)   there is a surplus of gasoline in Tulsa.
B)   there is a shortage of gasoline in Tulsa.
C)   the gasoline market in Tulsa is in equilibrium.
D)   without more information we cannot determine if there is a surplus, a shortage, or an equilibrium in the gasoline market in Tulsa.
E)   there is neither a surplus nor a shortage, but the market is NOT in equilibrium.

Question 5

If the demand for used cars decreases after the price of a new car falls,used cars and new cars are

Accepted Answer

A)   inferior goods.
B)   substitute goods.
C)   complementary goods.
D)   normal goods.
E)   The questions errs because it is the quantity of used cars, NOT the demand for used cars, that will change when the price of a new car falls.

Question 6

-Over the next few years more and more people prefer to ride on scooters.Which of the figures above best illustrates how this change affects the demand curve for scooters?

Accepted Answer

A)   Figure A
B)   Figure B
C)   Figure C
D)   Figure D
E)   None of the above answers is correct because the change in tastes will affect the supply curve not the demand curve.

Question 7

For consumers,taco chips and salsa are complements.If the price of salsa rises,what is the effect on the equilibrium price and quantity of taco chips?

Accepted Answer

A)   The equilibrium price of taco chips falls and the equilibrium quantity decreases.
B)   The equilibrium price of taco chips rises and the equilibrium quantity decreases.
C)   There is no change in the equilibrium price of taco chips and the equilibrium quantity increases.
D)   The equilibrium price of taco chips could rise, fall, or stay the same and the equilibrium quantity increases.
E)   The equilibrium price of taco chips rises and the equilibrium quantity increases.

Question 8

-The above figure shows the market for pizza.The market is in equilibrium when the cheese used to produce pizza falls in price.What point represents the most likely new price and quantity?

Accepted Answer

A)   A
B)   B
C)   C
D)   D
E)   E

Question 9

-Scooters and bicycles are substitutes.Suppose that the price of a bicycle falls.Which of the figures above best illustrates how this fall in price affects the demand curve for scooters?

Accepted Answer

A)   Figure A
B)   Figure B
C)   Figure C
D)   Figure D
E)   None of the above answers is correct because the change in the price of a bicycle will affect the supply curve not the demand curve.

Question 10

A demand curve

Accepted Answer

A)   has an upward slope.
B)   has a downward slope.
C)   is a graph of the relationship between quantity demanded of a good and its price.
D)   Both answers B and C are correct.
E)   Both answers A and C are correct.

Question 11

The downward slope of a demand curve

Accepted Answer

A)   represents the law of demand.
B)   shows that as the price of a good rises, consumers increase the quantity they demand.
C)   indicates how the quantity demanded changes when incomes rise and the good is a normal good.
D)   indicates how demand changes when incomes rise and the good is a normal good.
E)   indicates how demand changes when the price changes and the good is a normal good.

Question 12

-In the above figure,________ will shift in the demand curve from D to D₁.

Accepted Answer

A)   an increase in income if pizza is an inferior good
B)   a decrease in the price of a sub sandwich, a substitute for pizza
C)   buyers' expectation that pizza will be less expensive next week
D)   a scientific article published that demonstrates eating pizza is good for one's health
E)   a fall in the cost of producing pizza

Question 13

-The above figures show the market for HD televisions.If the price of the LCD screens used to produce these televisions falls,which figure shows the effect of this change in price?

Accepted Answer

A)   Figure A
B)   Figure B
C)   Figure C
D)   Figure D
E)   None of the figures represent this change.

Question 14

A change in the demand for apples could result from any of the following EXCEPT

Accepted Answer

A)   a change in the number of buyers.
B)   increased preferences for fresh fruit consumption for health reasons.
C)   a change in the price of an apple.
D)   a change in the price of a banana.
E)   a change in income.

Question 15

Which of the following statements is true about a competitive market? A competitive market

Accepted Answer

A)   must have a physical location.
B)   includes markets for goods and services but not for inputs.
C)   has so many buyers and sellers that no one can influence the price.
D)   has one seller competing to sell his or her product.
E)   has a handful of sellers but always has many buyers.

Question 16

Fresh orange juice and frozen orange juice are substitutes in production.The price of fresh orange juice rises.As a result,the equilibrium price of frozen orange juice ________ and the equilibrium quantity ________.

Accepted Answer

A)   rises; increases
B)   rises; decreases
C)   falls; increases
D)   falls; decreases
E)   does not change; decreases

Question 17

Bagels and cream cheese are complementary goods.Suppose that the price for flour,which is used to produce bagels,increases.The equilibrium price of cream cheese ________ and the equilibrium quantity of cream cheese ________.

Accepted Answer

A)   rises; decreases
B)   rises; increases
C)   falls; decreases
D)   does not change; does not change
E)   falls; increases

Question 18

Assume a competitive market is in equilibrium.There is an increase in demand,but no change in supply.As a result the equilibrium price ________,and the equilibrium quantity ________.

Accepted Answer

A)   rises; increases
B)   rises; does not change
C)   falls; does not change
D)   falls; decreases
E)   falls; increases

Question 19

The market demand curve

Accepted Answer

A)   cannot show how quantity demanded changes in response to a change in price.
B)   cannot show a change in demand for a good.
C)   is the horizontal sum of individual demand curves.
D)   is the vertical sum of individual demand curves.
E)   is upward sloping.

Question 20

As a falling price eliminates a surplus in the jersey market,

Accepted Answer

A)   the demand curve for jerseys shifts leftward and the supply curve of jerseys shifts rightward.
B)   consumers increase the quantity of jerseys they demand.
C)   producers increase the quantity of jerseys they supply.
D)   producers decrease the quantity of jerseys they supply and buyers decrease the quantity of jerseys they demand.
E)   the demand curve for jerseys shifts rightward and the supply curve of jerseys shifts leftward.

Exam 4: Demand and Supply

-The above figures show the market for HD televisions.If the price of the LCD screens used to produce these televisions falls,which figure shows the effect of this change in price?

Correct AnswerverifiedShow Answer

-In the above figure,________ will shift in the demand curve from D to D₁.

Correct AnswerverifiedShow Answer

If the demand for used cars decreases after the price of a new car falls,used cars and new cars are

Correct AnswerverifiedShow Answer

Which of the following statements is true about a competitive market? A competitive market

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The market demand curve

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-The above figure shows the market for pizza.The market is in equilibrium when the cheese used to produce pizza falls in price.What point represents the most likely new price and quantity?

Correct AnswerverifiedShow Answer

For consumers,taco chips and salsa are complements.If the price of salsa rises,what is the effect on the equilibrium price and quantity of taco chips?

Correct AnswerverifiedShow Answer

The downward slope of a demand curve

Correct AnswerverifiedShow Answer

A demand curve

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Assume a competitive market is in equilibrium.There is an increase in demand,but no change in supply.As a result the equilibrium price ________,and the equilibrium quantity ________.

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Which of the following increases the demand for a good?

Correct AnswerverifiedShow Answer

-The table above shows the situation in the gasoline market in Tulsa,Oklahoma.If the price of a gallon of gasoline is $3.62,then

Correct AnswerverifiedShow Answer

A competitive market is in equilibrium.Then there is an increase in demand and an increase in supply.The equilibrium price ________,and the equilibrium quantity ________.

Correct AnswerverifiedShow Answer

A technological improvement lowers the cost of producing corn.As a result,the price of a pound of corn ________ and the quantity of corn ________.

Correct AnswerverifiedShow Answer

As a falling price eliminates a surplus in the jersey market,

Correct AnswerverifiedShow Answer

Bagels and cream cheese are complementary goods.Suppose that the price for flour,which is used to produce bagels,increases.The equilibrium price of cream cheese ________ and the equilibrium quantity of cream cheese ________.

Correct AnswerverifiedShow Answer

A change in the demand for apples could result from any of the following EXCEPT

Correct AnswerverifiedShow Answer

Fresh orange juice and frozen orange juice are substitutes in production.The price of fresh orange juice rises.As a result,the equilibrium price of frozen orange juice ________ and the equilibrium quantity ________.

Correct AnswerverifiedShow Answer

-Scooters and bicycles are substitutes.Suppose that the price of a bicycle falls.Which of the figures above best illustrates how this fall in price affects the demand curve for scooters?

Correct AnswerverifiedShow Answer

-Over the next few years more and more people prefer to ride on scooters.Which of the figures above best illustrates how this change affects the demand curve for scooters?

Correct AnswerverifiedShow Answer

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Assume a competitive market is in equilibrium.There is an increase in demand,but no change in supply.As a result the equilibrium price ,and the equilibrium quantity .

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A competitive market is in equilibrium.Then there is an increase in demand and an increase in supply.The equilibrium price ,and the equilibrium quantity .

Correct Answer
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A technological improvement lowers the cost of producing corn.As a result,the price of a pound of corn and the quantity of corn .

Correct Answer
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Correct Answer
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Bagels and cream cheese are complementary goods.Suppose that the price for flour,which is used to produce bagels,increases.The equilibrium price of cream cheese and the equilibrium quantity of cream cheese .

Correct Answer
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Correct Answer
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Fresh orange juice and frozen orange juice are substitutes in production.The price of fresh orange juice rises.As a result,the equilibrium price of frozen orange juice and the equilibrium quantity .

Correct Answer
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Correct Answer
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Correct Answer
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