Question 1

An increase in the quantity of a product supplied is caused by an increase in the price of the product.

Accepted Answer

A) True 
 B)False

Question 2

If a firm expects that the price of its product will be higher in the future than it is today

Accepted Answer

A)   the firm will go out of business.
B)   the firm has an incentive to increase supply now and decrease supply in the future.
C)   the firm has an incentive to decrease quantity supplied now and increase quantity supplied in the future.
D)   the firm has an incentive to decrease supply now and increase supply in the future.

Question 3

Which of the following would cause both the equilibrium price and equilibrium quantity of cotton (assume that cotton is a normal good) to increase?

Accepted Answer

A)   an increase in consumer income
B)   a drought that sharply reduces cotton output
C)   a decrease in consumer income
D)   unusually good weather that results in a bumper crop of cotton

Question 4

A decrease in the price of GPS systems will result in

Accepted Answer

A)   a smaller quantity of GPS systems supplied.
B)   a larger quantity of GPS systems supplied.
C)   a decrease in the demand for GPS systems.
D)   an increase in the supply of GPS systems.

Question 5

Figure 3-1 
-Refer to Figure 3-1.If the product represented is an inferior good,an increase in income would be represented by a movement from

Accepted Answer

A)   A to B.
B)   B to A.
C)   D1 to D2.
D)   D2 to D1.

Question 6

An increase in the number of firms in a market will cause the quantity of a good supplied to increase.

Accepted Answer

A) True 
 B)False

Question 7

Explain how it would be possible for the equilibrium price and equilibrium quantity to both increase in the market for motorcycles if consumer preference for motorcycles increases and the number of motorcycle manufacturers decreases.

Accepted Answer

An increase in consumer preference will ...

Question 8

All else equal,a shortage of display screens used in the manufacture of tablet computers would cause the equilibrium price of the tablet computers to ________ and the equilibrium quantity of the tablet computers to ________.

Accepted Answer

A)   increase; increase
B)   increase; decrease
C)   decrease; increase
D)   decrease; decrease

Question 9

In October 2005,the U.S.Fish and Wildlife Service banned the importation of beluga caviar,the most prized of caviars,from the Caspian Sea.What happened in the market for caviar in the U.S.?

Accepted Answer

A)   The supply curve shifted to the left.
B)   The supply curve shifted to the right.
C)   The demand curve shifted to the right.
D)   The demand curve shifted to the left.

Question 10

Figure 3-1 
-Refer to Figure 3-1.A decrease in taste or preference would be represented by a movement from

Accepted Answer

A)   A to B.
B)   B to A.
C)   D1 to D2.
D)   D2 to D1.

Question 11

What is the difference between an "increase in demand" and an "increase in quantity demanded"?

Accepted Answer

A)   There is no difference between the two terms; they both refer to a shift of the demand curve.
B)   An "increase in demand" is represented by a rightward shift of the demand curve while an "increase in quantity demanded" is represented by a movement along a given demand curve.
C)   There is no difference between the two terms; they both refer to a movement downward along a given demand curve.
D)   An "increase in demand" is represented by a movement along a given demand curve, while an "increase in quantity demanded" is represented by a rightward shift of the demand curve.

Question 12

Figure 3-2 1 to S2. D)  S2 to S1." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 3-2.A decrease in the price of the product would be represented by a movement from

Accepted Answer

A)   A to B.
B)   B to A.
C)   S1 to S2.
D)   S2 to S1.

Question 13

If,in response to an increase in the price of chocolate,the quantity demanded of chocolate decreases economists would describe this as

Accepted Answer

A)   a decrease in demand.
B)   a decrease in quantity demanded.
C)   a change in consumer income.
D)   a decrease in consumers' taste for chocolate.

Question 14

Elvira decreased her consumption of bananas when the price of peanut butter increased.For Elvira,peanut butter and bananas are

Accepted Answer

A)   substitutes in consumption.
B)   both inferior goods.
C)   complements in consumption.
D)   both luxury goods.

Question 15

Last year,the Pottery Palace supplied 8,000 ceramic pots at $40 each.This year,the company supplied the same quantity of ceramic pots at $55 each.Based on this evidence,The Pottery Palace has experienced

Accepted Answer

A)   a decrease in supply.
B)   an increase in supply.
C)   an increase in the quantity supplied.
D)   a decrease in the quantity supplied.

Question 16

Figure 3-7 
-Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for used clothing,an inferior good.Which panel describes what happens in this market as a result of a decrease in income?

Accepted Answer

A)   Panel (a) 
B)   Panel (b) 
C)   Panel (c) 
D)   Panel (d)

Question 17

Which of the following would cause the equilibrium price of white bread to decrease and the equilibrium quantity of white bread to increase?

Accepted Answer

A)   a decrease in the price of flour
B)   an increase in the price of flour
C)   an increase in the price of rye bread, a substitute for white bread
D)   an increase in the price of butter, a complement for white bread

Question 18

Figure 3-8  
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D2 and S2 (point
A) A positive change in the technology used to produce apples and decrease in the price of oranges, a substitute for apples.
B) An increase in the wages of apple workers and a decrease in the price of oranges, a substitute for apples.
C) An increase in the number of apple producers and a decrease in the number of apple trees as a result of disease.
D) A decrease in the wages of apple workers and an increase in the price of oranges, a substitute for apples.
E)) Which of the following changes would cause the equilibrium to change to point A?

Accepted Answer

The answer of Figure 3-8  
-Refer to Figure 3-8.The...

Question 19

Which of the following is the correct way to describe equilibrium in a market?

Accepted Answer

A)   At equilibrium, demand equals supply.
B)   At equilibrium, quantity demanded equals quantity supplied.
C)   At equilibrium, market forces no longer apply.
D)   At equilibrium, scarcity is eliminated.

Question 20

Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall.Holding everything else constant,how would this affect the market for Blu-ray players (a complement to LCD televisions) ?

Accepted Answer

A)   The supply of blu-ray players would increase and the equilibrium price of blu-ray players would decrease.
B)   The demand for blu-ray players would increase and the equilibrium price of blu-ray players would increase.
C)   The demand for blu-ray players would decrease because consumers could afford to buy fewer LCD televisions and blu-ray players.
D)   The demand for blu-ray players would increase and the equilibrium price of blu-ray players would decrease.

Exam 3: Where Prices Come From: the Interaction of Demand and Supply

All else equal,a shortage of display screens used in the manufacture of tablet computers would cause the equilibrium price of the tablet computers to and the equilibrium quantity of the tablet computers to .

Correct Answer
verified

If,in response to an increase in the price of chocolate,the quantity demanded of chocolate decreases economists would describe this as

Correct Answer
verified

Which of the following would cause the equilibrium price of white bread to decrease and the equilibrium quantity of white bread to increase?

Correct Answer
verified

Elvira decreased her consumption of bananas when the price of peanut butter increased.For Elvira,peanut butter and bananas are

Correct Answer
verified

What is the difference between an "increase in demand" and an "increase in quantity demanded"?

Correct Answer
verified

In October 2005,the U.S.Fish and Wildlife Service banned the importation of beluga caviar,the most prized of caviars,from the Caspian Sea.What happened in the market for caviar in the U.S.?

Correct Answer
verified

Figure 3-2 -Refer to Figure 3-2.A decrease in the price of the product would be represented by a movement from

Correct Answer
verified

Last year,the Pottery Palace supplied 8,000 ceramic pots at $40 each.This year,the company supplied the same quantity of ceramic pots at $55 each.Based on this evidence,The Pottery Palace has experienced

Correct Answer
verified

Which of the following would cause both the equilibrium price and equilibrium quantity of cotton (assume that cotton is a normal good) to increase?

Correct Answer
verified

Figure 3-1 -Refer to Figure 3-1.A decrease in taste or preference would be represented by a movement from

Correct Answer
verified

If a firm expects that the price of its product will be higher in the future than it is today

Correct Answer
verified

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for used clothing,an inferior good.Which panel describes what happens in this market as a result of a decrease in income?

Correct Answer
verified

A decrease in the price of GPS systems will result in

Correct Answer
verified

Explain how it would be possible for the equilibrium price and equilibrium quantity to both increase in the market for motorcycles if consumer preference for motorcycles increases and the number of motorcycle manufacturers decreases.

Correct Answer
verified
An increase in consumer preference will ...
View Answer

Correct Answer
verified

Figure 3-1 -Refer to Figure 3-1.If the product represented is an inferior good,an increase in income would be represented by a movement from

Correct Answer
verified

Which of the following is the correct way to describe equilibrium in a market?

Correct Answer
verified

An increase in the quantity of a product supplied is caused by an increase in the price of the product.

Correct Answer
verified

Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall.Holding everything else constant,how would this affect the market for Blu-ray players (a complement to LCD televisions) ?

Correct Answer
verified

An increase in the number of firms in a market will cause the quantity of a good supplied to increase.

Correct Answer
verified

Exam 3: Where Prices Come From: the Interaction of Demand and Supply

All else equal,a shortage of display screens used in the manufacture of tablet computers would cause the equilibrium price of the tablet computers to ________ and the equilibrium quantity of the tablet computers to ________.

Correct AnswerverifiedShow Answer

If,in response to an increase in the price of chocolate,the quantity demanded of chocolate decreases economists would describe this as

Correct AnswerverifiedShow Answer

Which of the following would cause the equilibrium price of white bread to decrease and the equilibrium quantity of white bread to increase?

Correct AnswerverifiedShow Answer

Elvira decreased her consumption of bananas when the price of peanut butter increased.For Elvira,peanut butter and bananas are

Correct AnswerverifiedShow Answer

What is the difference between an "increase in demand" and an "increase in quantity demanded"?

Correct AnswerverifiedShow Answer

In October 2005,the U.S.Fish and Wildlife Service banned the importation of beluga caviar,the most prized of caviars,from the Caspian Sea.What happened in the market for caviar in the U.S.?

Correct AnswerverifiedShow Answer

Figure 3-2 -Refer to Figure 3-2.A decrease in the price of the product would be represented by a movement from

Correct AnswerverifiedShow Answer

Last year,the Pottery Palace supplied 8,000 ceramic pots at $40 each.This year,the company supplied the same quantity of ceramic pots at $55 each.Based on this evidence,The Pottery Palace has experienced

Correct AnswerverifiedShow Answer

Which of the following would cause both the equilibrium price and equilibrium quantity of cotton (assume that cotton is a normal good) to increase?

Correct AnswerverifiedShow Answer

Figure 3-1 -Refer to Figure 3-1.A decrease in taste or preference would be represented by a movement from

Correct AnswerverifiedShow Answer

If a firm expects that the price of its product will be higher in the future than it is today

Correct AnswerverifiedShow Answer

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for used clothing,an inferior good.Which panel describes what happens in this market as a result of a decrease in income?

Correct AnswerverifiedShow Answer

A decrease in the price of GPS systems will result in

Correct AnswerverifiedShow Answer

Explain how it would be possible for the equilibrium price and equilibrium quantity to both increase in the market for motorcycles if consumer preference for motorcycles increases and the number of motorcycle manufacturers decreases.

Correct AnswerverifiedAn increase in consumer preference will ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Figure 3-1 -Refer to Figure 3-1.If the product represented is an inferior good,an increase in income would be represented by a movement from

Correct AnswerverifiedShow Answer

Which of the following is the correct way to describe equilibrium in a market?

Correct AnswerverifiedShow Answer

An increase in the quantity of a product supplied is caused by an increase in the price of the product.

Correct AnswerverifiedShow Answer

Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall.Holding everything else constant,how would this affect the market for Blu-ray players (a complement to LCD televisions) ?

Correct AnswerverifiedShow Answer

An increase in the number of firms in a market will cause the quantity of a good supplied to increase.

Correct AnswerverifiedShow Answer

All else equal,a shortage of display screens used in the manufacture of tablet computers would cause the equilibrium price of the tablet computers to and the equilibrium quantity of the tablet computers to .

Correct Answer
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An increase in consumer preference will ...
View Answer

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