Question 1

The graph illustrates the supply of sweaters. As the technology used to produce sweaters improves, the

Accepted Answer

A)   quantity of sweaters supplied decreases.
B)   quantity of sweaters supplied increases.
C)   supply of sweaters decreases and the demand for sweaters does not change.
D)   supply of sweaters increases AND the demand for sweaters increases.
E)   supply of sweaters increases and the demand for sweaters does not change.

Question 2

The above figure shows the market for t-shirts. If the price of t-shirts is $12, then

Accepted Answer

A)   there is a shortage and the price of t-shirts will fall.
B)   there is a surplus and the price of t-shirts will rise.
C)   there is a surplus and the price of t-shirts will fall.
D)   there is a shortage and the price of t-shirts will rise.
E)   the market is in equilibrium.

Question 3

The law of demand refers to how

Accepted Answer

A)   the price of the good changes when people's demand for the good changes.
B)   demand changes when people's incomes change.
C)   the quantity demanded changes when the demand for the good changes.
D)   the quantity demanded changes when the price of the good changes.
E)   demand changes when the prices of substitutes and complements change.

Question 4

2. D)  shifts the supply curve from S to S1. E)  has no effect." class="answers-bank-image d-inline" rel="preload" > In the above figure, an increase in cost of the cheese used to produce pizza

Accepted Answer

A)   results in a movement from point b to point a.
B)   results in a movement from point a to point b.
C)   shifts the supply curve from S to S2.
D)   shifts the supply curve from S to S1.
E)   has no effect.

Question 5

There are five hundred buyers in the market for cheese. If we know each individual's demand curves, to find the market demand we must

Accepted Answer

A)   add the prices that each buyer will pay at every quantity.
B)   add the quantities that each buyer will purchase at every price.
C)   give up because there is no way to find the market demand.
D)   average the price each buyer is willing to pay for each given quantity.
E)   multiply the price times quantity for each buyer and then add the resulting products together.

Question 6

The above figure illustrates the market for corn. If point 'a' represents the original equilibrium and point 'b' the new equilibrium, which of the following could have caused the change?

Accepted Answer

A)   An increase in consumers' preferences for corn.
B)   An increase in the labour costs of producing corn.
C)   An increase in consumers' income if corn is a normal good.
D)   An improvement in the technology of producing corn.
E)   An increase in consumers' income if corn is an inferior good.

Question 7

If an early frost destroys most of the apple crop, the equilibrium price of an apple ________ and the equilibrium quantity ________.

Accepted Answer

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

Question 8

1 reflects A)  an increase in the quantity of pizza supplied. B)  a decrease in the supply of pizza. C)  an increase in the supply of pizza. D)  a decrease in the quantity of pizza supplied. E)  None of the above answers is correct. " class="answers-bank-image d-inline" rel="preload" > In the above figure, the shift in the supply curve from S to S1 reflects

Accepted Answer

A)   an increase in the quantity of pizza supplied.
B)   a decrease in the supply of pizza.
C)   an increase in the supply of pizza.
D)   a decrease in the quantity of pizza supplied.
E)   None of the above answers is correct.

Question 9

The market demand curve

Accepted Answer

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

Question 10

-Using the data in the table above, the equilibrium quantity and equilibrium price for a cellular smart phone is

Accepted Answer

A)   60,000 and $50.
B)   80,000 and $80.
C)   40,000 and $20.
D)   50,000 and $100.
E)   100,000 and $20.

Question 11

If the Motor Vehicle Builders' Union successfully negotiates a wage increase for its members, how does the wage hike affect the supply of cars?

Accepted Answer

A)   The quantity supplied decreases.
B)   The supply increases.
C)   The supply decreases.
D)   The quantity supplied increases.
E)   Both answers B and D are correct.

Question 12

The above figure shows the market for pizza. The market is in equilibrium when people's incomes decrease. If pizza is a normal good, then which point represents the most likely new price and quantity?

Accepted Answer

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

Question 13

Consider the market for smart phones. Which of the following shifts the demand curve rightward?

Accepted Answer

A)   A decrease in the number of smart phone buyers.
B)   An increase in the price of smart phones.
C)   A decrease in the price of smart phones.
D)   An increase in the supply of smart phones.
E)   An increase in the price of land-line phone service, a substitute for smart phones.

Question 14

Teenagers drink more soft drinks than other age groups. If the number of teenagers increases, everything else remaining the same,

Accepted Answer

A)   market demand for soft drinks decreases.
B)   market demand for soft drinks does not change.
C)   there is a movement along the market demand curve for soft drinks.
D)   market demand for soft drinks increases.
E)   None of the above answers is correct because the effect on demand depends whether the supply curve shifts rightward, leftward or not at all.

Question 15

Petrol prices increase by 50 per cent and other things remain the same. As a result, there is

Accepted Answer

A)   an increase in the demand for petrol.
B)   a decrease in the quantity of petrol demanded.
C)   a decrease in the demand for petrol.
D)   no change in the quantity of petrol demanded.
E)   More information is needed to determine if the demand for petrol increases or decreases.

Question 16

Suppose the equilibrium price of oranges is $2.00 per kilogram. If the actual price is above the equilibrium price, a

Accepted Answer

A)   surplus exists but nothing happens until either the demand or the supply changes.
B)   surplus exists and the price rises to restore equilibrium.
C)   shortage exists and the price rises to restore equilibrium.
D)   surplus exists and the price falls to restore equilibrium.
E)   shortage exists and the price falls to restore equilibrium.

Question 17

A market is defined as

Accepted Answer

A)   a physical place where people buy only goods.
B)   any arrangement that brings buyers and sellers together.
C)   a place where one good is bartered for another.
D)   a physical place where people buy both goods and services.
E)   a store where people buy physical goods.

Question 18

If both producers and consumers believe that a product's price will rise in the future, then in the present, the equilibrium price

Accepted Answer

A)   might rise, fall or not change, but the change can never be predicted.
B)   might rise, fall or not change depending on whether the effect from the producers is greater or less than the effect from the consumers.
C)   falls.
D)   rises.
E)   does not change.

Question 19

Suppose the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward. Which of the following could have caused these shifts?

Accepted Answer

A)   Consumers purchased more computers because of the Christmas season, and the labour costs of producing desktop computers decreased.
B)   Desktop computers are a normal good and incomes increased, while the labour costs of producing personal computers increased.
C)   The price of a laptop computer, a substitute for desktop computers, fell and the cost of producing desktop computers decreased.
D)   Desktop computers are a normal good and incomes decreased, while the labour costs of producing personal computers increased.
E)   Desktop computers are a normal good and incomes increased, while more firms entered the market.

Question 20

An increase in both the equilibrium price and quantity can be the result of

Accepted Answer

A)   a decrease in supply.
B)   a decrease in demand.
C)   an increase in supply.
D)   an increase in demand.
E)   None of the above answers is correct.

Exam 4: Demand and Supply

The above figure illustrates the market for corn. If point 'a' represents the original equilibrium and point 'b' the new equilibrium, which of the following could have caused the change?

Correct AnswerverifiedShow Answer

Suppose the equilibrium price of oranges is $2.00 per kilogram. If the actual price is above the equilibrium price, a

Correct AnswerverifiedShow Answer

Suppose the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward. Which of the following could have caused these shifts?

Correct AnswerverifiedShow Answer

The law of demand refers to how

Correct AnswerverifiedShow Answer

The graph illustrates the supply of sweaters. As the technology used to produce sweaters improves, the

Correct AnswerverifiedShow Answer

In the above figure, an increase in cost of the cheese used to produce pizza

Correct AnswerverifiedShow Answer

Petrol prices increase by 50 per cent and other things remain the same. As a result, there is

Correct AnswerverifiedShow Answer

The above figure shows the market for pizza. The market is in equilibrium when people's incomes decrease. If pizza is a normal good, then which point represents the most likely new price and quantity?

Correct AnswerverifiedShow Answer

If the Motor Vehicle Builders' Union successfully negotiates a wage increase for its members, how does the wage hike affect the supply of cars?

Correct AnswerverifiedShow Answer

The above figure shows the market for t-shirts. If the price of t-shirts is $12, then

Correct AnswerverifiedShow Answer

If both producers and consumers believe that a product's price will rise in the future, then in the present, the equilibrium price

Correct AnswerverifiedShow Answer

If an early frost destroys most of the apple crop, the equilibrium price of an apple ________ and the equilibrium quantity ________.

Correct AnswerverifiedShow Answer

In the above figure, the shift in the supply curve from S to S1 reflects

Correct AnswerverifiedShow Answer

An increase in both the equilibrium price and quantity can be the result of

Correct AnswerverifiedShow Answer

Consider the market for smart phones. Which of the following shifts the demand curve rightward?

Correct AnswerverifiedShow Answer

The market demand curve

Correct AnswerverifiedShow Answer

Teenagers drink more soft drinks than other age groups. If the number of teenagers increases, everything else remaining the same,

Correct AnswerverifiedShow Answer

-Using the data in the table above, the equilibrium quantity and equilibrium price for a cellular smart phone is

Correct AnswerverifiedShow Answer

There are five hundred buyers in the market for cheese. If we know each individual's demand curves, to find the market demand we must

Correct AnswerverifiedShow Answer

A market is defined as

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

If an early frost destroys most of the apple crop, the equilibrium price of an apple and the equilibrium quantity .

Correct Answer
verified

In the above figure, the shift in the supply curve from S to S₁ reflects

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified