Question 1

If steak and potatoes are complements,when the price of steak goes up,the demand curve for potatoes:

Accepted Answer

A)   shifts to the right.
B)   shifts to the left.
C)   stays the same.
D)   shifts to the right and then moves back.E) A) and D)
F) None of the above

Question 2

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:

Accepted Answer

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.E) B) and C)
F) A) and D)

Question 3

If in a competitive market the quantity supplied exceeds the quantity demanded,we expect prices to:

Accepted Answer

A)   stay the same.
B)   rise.
C)   fall.
D)   rise first,then fall when demand decreases.E) C) and D)
F) A) and B)

Question 4

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.

Accepted Answer

A)   increase;supply of
B)   decrease;demand for
C)   decrease;supply of
D)   decrease;quantity supplied ofE) B) and C)
F) A) and D)

Question 5

Which factor would NOT result in an increase in the supply of a good?

Accepted Answer

A)   a decrease in input prices
B)   a beneficial technological change
C)   an increase in the number of suppliers
D)   an increase in input pricesE) None of the above
F) B) and C)

Question 6

Use the following to answer questions :
Figure: Supply of Coconuts 
-(Figure: Supply of Coconuts) Use Figure: Supply of Coconuts.If the price of coconuts decreased,it would be represented in the figure as a movement from:

Accepted Answer

A)   A to B.
B)   B to A.
C)   C to A.
D)   E to B.E) All of the above
F) A) and B)

Question 7

The demand curve for monthly subscriptions to The Movie Network has shifted to the right.What could have caused it?

Accepted Answer

A)   a fall in the price of The Movie Network subscriptions
B)   an increase in the price of The Movie Network subscriptions
C)   an increase in the supply of The Movie Network subscriptions
D)   an increase in the incomes of buyersE) B) and C)
F) All of the above

Question 8

If consumer tastes for electric cars increase over the next 10 years and there is no change in supply,we expect to see an increase in the demand for electric cars,higher electric car prices,and an increase in the equilibrium quantity of electric cars.

Accepted Answer

A) True 
 B)False

Question 9

The market for soy beans is initially in equilibrium,with an upward-sloping supply curve and a downward-sloping demand curve.Because of mad cow disease,producers decide to replace bone meal with soy beans in cattle feed.The likely effect is that the:

Accepted Answer

A)   equilibrium price and quantity of soy beans will rise.
B)   equilibrium price and quantity of soy beans will fall.
C)   equilibrium quantity of soybeans will rise,but we can't determine what will happen to the equilibrium price.
D)   equilibrium price of soy beans will rise,but we can't determine what will happen to the equilibrium quantity.E) B) and D)
F) A) and B)

Question 10

Suppose there is an excess supply of chemical engineers in India.Over time,the salaries for chemical engineers will fall in India.

Accepted Answer

A) True 
 B)False

Question 11

Use the following to answer questions :
Figure: The Blu-ray Disc Rental Market 
-(Figure: The Blu-ray Disc Rental Market) Use Figure: The Blu-ray Disc Rental Market.If the rental price of Blu-ray discs rises from $5 to $7:

Accepted Answer

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.E) None of the above
F) A) and B)

Question 12

Use the following to answer questions : 
-(Table: The Demand for Chocolate-Covered Peanuts) Use Table: The Demand for Chocolate-Covered Peanuts.Barbara demands 20 bags of chocolate-covered peanuts per month when the price of each bag is:

Accepted Answer

A)   $0.90.
B)   $0.80.
C)   $0.70.
D)   $0.60.E) None of the above
F) B) and C)

Question 13

The terms decrease in demand and decrease in quantity demanded can be used interchangeably.

Accepted Answer

A) True 
 B)False

Question 14

Which statement BEST exemplifies the law of demand?

Accepted Answer

A)   As income taxes rise,fewer new cars are purchased.
B)   As the price of corn rises,more hectares 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.E) None of the above
F) All of the above

Question 15

It is certain that the equilibrium price will rise when the supply curve shifts to the _____ and the demand curve shifts to the _____.

Accepted Answer

A)   right;right
B)   right;left
C)   left;left
D)   left;rightE) A) and D)
F) All of the above

Question 16

A competitive market occurs when there are many buyers and sellers of the same good.

Accepted Answer

A) True 
 B)False

Question 17

The typical supply curve illustrates that:

Accepted Answer

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.E) All of the above
F) A) and C)

Question 18

If demand is downward sloping,a decrease in supply with no change in demand will lead to a(n) _____ in equilibrium quantity and a(n) _____ in equilibrium price.

Accepted Answer

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

Question 19

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?

Accepted Answer

A)   10
B)   150
C)   100
D)   15E) C) and D)
F) None of the above

Question 20

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:

Accepted Answer

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 both Raclette cheese and new potatoes.E) None of the above
F) A) and B)

Exam 3: Supply and Demand

If consumer tastes for electric cars increase over the next 10 years and there is no change in supply,we expect to see an increase in the demand for electric cars,higher electric car prices,and an increase in the equilibrium quantity of electric cars.

Correct AnswerverifiedShow Answer

The demand curve for monthly subscriptions to The Movie Network has shifted to the right.What could have caused it?

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

Use the following to answer questions : Figure: The Blu-ray Disc Rental Market -(Figure: The Blu-ray Disc Rental Market) Use Figure: The Blu-ray Disc Rental Market.If the rental price of Blu-ray discs rises from $5 to $7:

Correct AnswerverifiedShow Answer

A competitive market occurs when there are many buyers and sellers of the same good.

Correct AnswerverifiedShow Answer

Which factor would NOT result in an increase in the supply of a good?

Correct AnswerverifiedShow Answer

The typical supply curve illustrates that:

Correct AnswerverifiedShow Answer

Suppose there is an excess supply of chemical engineers in India.Over time,the salaries for chemical engineers will fall in India.

Correct AnswerverifiedShow Answer

The market for soy beans is initially in equilibrium,with an upward-sloping supply curve and a downward-sloping demand curve.Because of mad cow disease,producers decide to replace bone meal with soy beans in cattle feed.The likely effect is that the:

Correct AnswerverifiedShow Answer

If demand is downward sloping,a decrease in supply with no change in demand will lead to a(n) _____ in equilibrium quantity and a(n) _____ in equilibrium price.

Correct AnswerverifiedShow Answer

If in a competitive market the quantity supplied exceeds the quantity demanded,we expect prices to:

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Use the following to answer questions : -(Table: The Demand for Chocolate-Covered Peanuts) Use Table: The Demand for Chocolate-Covered Peanuts.Barbara demands 20 bags of chocolate-covered peanuts per month when the price of each bag is:

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

It is certain that the equilibrium price will rise when the supply curve shifts to the _____ and the demand curve shifts to the _____.

Correct AnswerverifiedShow Answer

Use the following to answer questions : Figure: Supply of Coconuts -(Figure: Supply of Coconuts) Use Figure: Supply of Coconuts.If the price of coconuts decreased,it would be represented in the figure as a movement from:

Correct AnswerverifiedShow Answer

The terms decrease in demand and decrease in quantity demanded can be used interchangeably.

Correct AnswerverifiedShow Answer

If steak and potatoes are complements,when the price of steak goes up,the demand curve for potatoes:

Correct AnswerverifiedShow Answer

Which statement BEST exemplifies the law of demand?

Correct AnswerverifiedShow Answer

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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.

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If demand is downward sloping,a decrease in supply with no change in demand will lead to a(n) _ in equilibrium quantity and a(n) _ in equilibrium price.

Correct Answer
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It is certain that the equilibrium price will rise when the supply curve shifts to the _ and the demand curve shifts to the _.

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