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Exam 3: Demand, Supply, and Market Equilibrium

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Question 1

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DVDs and DVD players are complements. An increase in the price of DVD players would cause which of the following in the market for DVDs?

A) The equilibrium price and quantity of DVDs would increase.
B) The equilibrium price and quantity of DVDs would decrease.
C) The equilibrium price of DVDs would increase, and the equilibrium quantity would decrease.
D) The equilibrium price of DVDs would decrease, and the equilibrium quantity would increase.

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Question 2

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If the demand for coffee decreases as income decreases, coffee is a(n)

A) normal good.
B) inferior good.
C) substitute good.
D) complementary good.

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Question 3

Multiple Choice

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According to the law of supply, there is a

If increases in government regulations have increased the cost of producing gasoline-powered lawnmowers, you accurately predict that in the market for gasoline-powered lawnmowers, there will be a(n)

Refer to the information provided in Table 3.1 below to answer the question(s) that follow. Table 3.1 -Refer to Table 3.1. If the price per pizza is $12, the price will

When the supply of Swiss cheese decreases while the demand for Swiss cheese increases, the equilibrium ________ of Swiss cheese will definitely ________, ceteris paribus.

A movement along the demand curve to the left may be caused by a

If price is above the equilibrium, then quantity supplied will be greater than quantity demanded, putting downward pressure on price.

An increase in demand for a product will cause the price of the product to rise and supply of the product to increase.

Refer to the information provided in Figure 3.7 below to answer the following question(s) . Figure 3.7 -Refer to Figure 3.7. An increase in quantity demanded is represented by the movement

For inferior goods, a decrease in income will cause the

Related to the Economics in Practice on p. 51: Economist Meghan Busse found after examining more than 40 million car transactions that car purchasers are ________ influenced in their choice of cars by temporary weather fluctuations at the time of purchase.

Refer to Scenario 3.1 below to answer the question(s) that follow. SCENARIO 3.1: Rented DVDs and movies shown in theaters are substitutes. Rented DVDs and plasma TVs are complements. Plasma TVs and movies shown in theaters are normal goods. People watch rented DVDs more often in the winter than in the summer. -Refer to Scenario 3.1. Most plasma TVs sold in the United States are imported from Japan. If the United States government eliminates a quota that reduced the number of plasma TVs that can be imported into the United States, ceteris paribus, what would happen?

The price of circuit boards used in the manufacturing of LCD televisions has fallen. This will lead to ________ LCD televisions.

Related to the Economics in Practice on p. 65: Increased preference for quinoa would shift the ________ curve for quinoa to the right and lead to a(n) ________ in the price of quinoa, ceteris paribus.

Refer to the information provided in Table 3.2 below to answer the question(s) that follow. Table 3.2 -Refer to Table 3.2. In this market there will be an excess supply of 500 cheeseburgers at a price of

Related to the Economics in Practice on page 66: One explanation for the increase in the price of the Baltimore newspaper is the increase in the cost of newsprint. This would cause the ________ of Baltimore newspapers to ________.

Related to the Economics in Practice on page 65: Increased preference for quinoa would most likely shift the demand curve for quinoa to the ________ and lead to a(n) ________ in the price of quinoa, ceteris paribus.

Refer to Scenario 3.3 below to answer the question(s) that follow. SCENARIO 3.3: Mustard and mayonnaise are substitutes. Mustard and relish are complements. Mustard is a normal good. During the summer, about 50% of all mustard was recalled by manufacturers and removed from store shelves. -Refer to Scenario 3.3. If at the same time of the mustard recall, consumer income also decreased. Then, ceteris paribus, in the market for mustard this would have caused

Refer to the information provided in Figure 3.7 below to answer the following question(s) . Figure 3.7 -Refer to Figure 3.7. If pizza and burritos are substitutes, a decrease in the price of burritos will cause a movement from Point B on demand curve D₂ to