Question 1

-Consider the demand curves for soft drinks shown in the figure above. Initially the economy is at point a. If people come to expect that the price of a soft drink will increase in the future, there will be a movement to a point such as

Accepted Answer

A)   none of the points illustrated.
B)   b.
C)   c.
D)   d.E) A) and B)
F) A) and C)

Question 2

Every spring, motorists do more driving than during the winter months. Every spring, the price of gasoline increases and the motorists buy more gasoline. This experience suggests that the

Accepted Answer

A)   ʺlaw of demandʺ does not always hold for necessities like gasoline.
B)   laws of supply and demand are both contradicted for gasoline, though only during the spring driving season.
C)   ʺlaw of supplyʺ does not always hold for necessities like gasoline.
D)   None of the above answers are correct.E) A) and B)
F) All of the above

Question 3

Which of the following does NOT shift the demand curve for broccoli?

Accepted Answer

A)   a decrease in the price of spinach, a substitute for broccoli, because of a bumper crop of spinach this year
B)   a warning by the U.S. Surgeon General that broccoli causes schizophrenia
C)   an increase in the cost of fertilizer used to grow broccoli
D)   an increase in the price of spinach, a substitute for broccoli, because rodents gobbled up much of this yearʹs spinach cropE) B) and C)
F) None of the above

Question 4

The relative price of a good is

Accepted Answer

A)   an opportunity cost.
B)   equal to the price of that good divided by the quantity demanded of the good.
C)   equal to the money price of a good.
D)   what you get paid for babysitting your cousin.E) B) and D)
F) A) and B)

Question 5

If good growing conditions increase the supply of strawberries and hot weather increases the demand for strawberries, the quantity of strawberries bought__________ .

Accepted Answer

A)   doesnʹt change and the price falls
B)   increases and the price rises
C)   doesnʹt change and the price rises
D)   increases and the price might rise, fall or not changeE) A) and C)
F) B) and C)

Question 6

Twenty years ago a stove cost $300 and a refrigerator cost $1,500. Today a stove costs $600, while a refrigerator costs $1,800. Which of the following statements is true?

Accepted Answer

A)   The money price of a refrigerator has fallen.
B)   The relative price of a refrigerator has increased.
C)   The relative price of stoves and refrigerators has not changed.
D)   The relative price of a stove has increased.E) A) and D)
F) C) and D)

Question 7

-Consider the demand curves for soft drinks shown in the figure above. Moving from point a to point c means that

Accepted Answer

A)   the marginal benefit of each additional soft drink falls.
B)   the opportunity cost of another soft drink increases.
C)   the price of a soft drink has increased.
D)   peopleʹs incomes have decreased.E) A) and B)
F) A) and C)

Question 8

An unusually warm winter shifts the

Accepted Answer

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

Question 9

-The above figures show the market for gasoline. Which figure shows the effect of motorists increasing the number of times they take the bus to work rather than driving their own cars?

Accepted Answer

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

Question 10

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

Accepted Answer

A)   5 pens a month.
B)   between 400 and 600 pens, but it is impossible to be precise.
C)   2 pens a month.
D)   500 pens a month.E) A) and B)
F) A) and C)

Question 11

Which of the following shifts the supply curve rightward?

Accepted Answer

A)   a decrease in the price of the good
B)   a decrease in the price of a factor of production used to produce the good
C)   an increase in the population
D)   a positive change in preferences for the goodE) All of the above
F) A) and D)

Question 12

The law of demand concludes that a rise in the price of a golf ball___________ the quantity demanded and ___________.

Accepted Answer

A)   increases; creates a movement down along the demand curve for golf balls.
B)   decreases; creates a movement up along the demand curve for golf balls.
C)   decreases; shifts the demand curve for golf balls leftward.
D)   increases; shifts the demand curve for golf balls rightward.E) All of the above
F) None of the above

Question 13

There is a technological advance in the production of ice cream. As a result, the supply curve of ice cream shifts __________and__________ .

Accepted Answer

A)   leftward; both the equilibrium price and equilibrium quantity fall
B)   rightward; both the equilibrium price and equilibrium quantity fall
C)   rightward; both the equilibrium price and equilibrium quantity rise
D)   rightward; the equilibrium price falls while the equilibrium quantity increasesE) B) and D)
F) B) and C)

Question 14

A decrease in the demand for beef because of concerns over cholesterol results in

Accepted Answer

A)   an offsetting increase in the demand for beef if the price of beef falls.
B)   lower beef prices.
C)   higher beef prices.
D)   an increase in the supply of beef.E) B) and D)
F) All of the above

Question 15

If the price of a video download is below its equilibrium price, the quantity supplied is than the quantity demanded. If the price of a video download is above its equilibrium price, the quantity supplied is than the quantity demanded.

Accepted Answer

A)   greater; greater
B)   less; greater
C)   less; less
D)   greater; lessE) None of the above
F) A) and B)

Question 16

An increase in the number of suppliers in a market results in a

Accepted Answer

A)   rightward shift in the supply curve.
B)   leftward shift in the supply curve.
C)   movement up along the supply curve.
D)   Both answers A and C are correct.E) A) and D)
F) A) and C)

Question 17

Which of the following influences peopleʹs buying plans and does not shift the demand curve?

Accepted Answer

A)   preferences
B)   income
C)   the price of the good
D)   the prices of related goodsE) B) and C)
F) B) and D)

Question 18

A ticket to see the Radio City Rockettes costs $90. You buy a ticket for $30 to see the New York Jets play football. The money price for

Accepted Answer

A)   a Jets ticket is $30 and the relative price is 3 Rockettes tickets per Jets ticket.
B)   the Rockettes ticket is $90 and the relative price is 3 Jets tickets per Rockette ticket.
C)   a Jets ticket is $30 and $3 for a Rockettes ticket.
D)   the Rockettes ticket is 3 Jets tickets per Rockette ticket and the relative price is $90.E) A) and B)
F) All of the above

Question 19

-The above figure shows the market for hamburger. Which figure shows the effect of an announcement by the U.S. Food and Drug Administration FDA)  that eating hamburger causes early death?

Accepted Answer

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

Question 20

Pizza and hamburgers are substitutes for consumers. A fall in the price of a pizza the price of a hamburger and the quantity of hamburgers.

Accepted Answer

A)   raises; decreases
B)   raises; increases
C)   lowers; decreases
D)   lowers; increasesE) A) and C)
F) C) and D)

Exam 3: Demand and Supply

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

Correct AnswerverifiedShow Answer

-The above figures show the market for gasoline. Which figure shows the effect of motorists increasing the number of times they take the bus to work rather than driving their own cars?

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The law of demand concludes that a rise in the price of a golf ball___________ the quantity demanded and ___________.

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-The above figure shows the market for hamburger. Which figure shows the effect of an announcement by the U.S. Food and Drug Administration FDA) that eating hamburger causes early death?

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A decrease in the demand for beef because of concerns over cholesterol results in

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The relative price of a good is

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-Consider the demand curves for soft drinks shown in the figure above. Moving from point a to point c means that

Correct AnswerverifiedShow Answer

Pizza and hamburgers are substitutes for consumers. A fall in the price of a pizza the price of a hamburger and the quantity of hamburgers.

Correct AnswerverifiedShow Answer

Twenty years ago a stove cost $300 and a refrigerator cost $1,500. Today a stove costs $600, while a refrigerator costs $1,800. Which of the following statements is true?

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An increase in the number of suppliers in a market results in a

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Which of the following does NOT shift the demand curve for broccoli?

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There is a technological advance in the production of ice cream. As a result, the supply curve of ice cream shifts __________and__________ .

Correct AnswerverifiedShow Answer

If good growing conditions increase the supply of strawberries and hot weather increases the demand for strawberries, the quantity of strawberries bought__________ .

Correct AnswerverifiedShow Answer

-Consider the demand curves for soft drinks shown in the figure above. Initially the economy is at point a. If people come to expect that the price of a soft drink will increase in the future, there will be a movement to a point such as

Correct AnswerverifiedShow Answer

An unusually warm winter shifts the

Correct AnswerverifiedShow Answer

Every spring, motorists do more driving than during the winter months. Every spring, the price of gasoline increases and the motorists buy more gasoline. This experience suggests that the

Correct AnswerverifiedShow Answer

Which of the following influences peopleʹs buying plans and does not shift the demand curve?

Correct AnswerverifiedShow Answer

If the price of a video download is below its equilibrium price, the quantity supplied is than the quantity demanded. If the price of a video download is above its equilibrium price, the quantity supplied is than the quantity demanded.

Correct AnswerverifiedShow Answer

A ticket to see the Radio City Rockettes costs $90. You buy a ticket for $30 to see the New York Jets play football. The money price for

Correct AnswerverifiedShow Answer

Which of the following shifts the supply curve rightward?

Correct AnswerverifiedShow Answer

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The law of demand concludes that a rise in the price of a golf ball_ the quantity demanded and _.

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There is a technological advance in the production of ice cream. As a result, the supply curve of ice cream shifts and .

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