Question 1

If the demand for tires goes down when the price of gas goes up, then tires and gas are:

Accepted Answer

A)   substitutes.
B)   complements.
C)   both expensive.
D)   both inexpensive.E) C) and D)
F) None of the above

Question 2

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) B) and D)
F) None of the above

Question 3

It is certain that the equilibrium price will fall when:

Accepted Answer

A)   the supply curve and the demand curve both shift to the right.
B)   the supply curve shifts to the right and the demand curve shifts to the left.
C)   supply and demand both increase.
D)   supply decreases and demand stays the same.E) A) and C)
F) B) and C)

Question 4

Apple and Samsung are large corporations that produce smart phones, the iPhone and the Galaxy, respectively. They are constantly trying through expensive advertising and product innovations to persuade customers to buy their brand. Is the smart phone market a competitive in the economic sense defined in Chapter 3? Why or why not?

Accepted Answer

Although Apple and Samsung compete with ...

Question 5

According to the law of demand, if the price of steak increases in Rhode Island, the demand for steak will decrease in Rhode Island.

Accepted Answer

A) True 
 B)False

Question 6

Rice and potatoes are substitutes in consumption. If the price of rice rises and there is a bumper crop of potatoes, in the market for potatoes one would expect the equilibrium price to _____ and the equilibrium quantity to _____.

Accepted Answer

A)   rise, fall, or stay the same; rise
B)   rise; fall
C)   fall; fall
D)   rise; fall, rise, or stay the sameE) B) and C)
F) A) and D)

Question 7

If tortilla chips are a normal good, when there is an increase in income, equilibrium price _____ and equilibrium quantity _____.

Accepted Answer

A)   decreases; increases.
B)   decreases; decreases.
C)   increases; increases.
D)   increases; decreases.E) B) and D)
F) All of the above

Question 8

Use the following to answer questions:
Figure: Supply of Coconuts 
-(Figure: Supply of Coconuts)  Look at the figure Supply of Coconuts. If the prices of inputs (e.g., labor, fertilizer, and fuel)  used to produce and transport coconuts increased, 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) A) and B)
F) B) and C)

Question 9

Suppose the equilibrium price of good X is $25 and the equilibrium quantity is 124 units. If the price of good X is $2:

Accepted Answer

A)   there will be excess demand for good X.
B)   there will be an excess supply of good X.
C)   the market will clear.
D)   the quantity demanded of good X will be less than 124 units.E) A) and B)
F) None of the above

Question 10

Use the following to answer questions:
Figure: Demand for DVDs 
-(Figure: Demand for DVDs)  Look at the figure Demand for DVDs. A decrease in the price of DVD players (a complement)  would result in a change illustrated by the move from:

Accepted Answer

A)   f to g in panel A.
B)   h to i in panel B.
C)   j to k in panel C.
D)   l to m in panel D.E) None of the above
F) B) and D)

Question 11

The market price of airline flights increased recently. Some economists suggest that the price increased because of an increase in the number of business travelers. They believe that in the market for flights:

Accepted Answer

A)   supply increased.
B)   supply decreased.
C)   demand increased.
D)   demand decreased.E) None of the above
F) A) and C)

Question 12

Markets that are characterized by many buyers and many sellers are:

Accepted Answer

A)   inefficient.
B)   competitive.
C)   foreign.
D)   monopolies.E) All of the above
F) None of the above

Question 13

The _____ tomatoes will decrease if fertilizer prices rise.

Accepted Answer

A)   demand for
B)   quantity demanded of
C)   supply of
D)   equilibrium price ofE) A) and B)
F) B) and C)

Question 14

Use the following to answer questions:
Figure: Shifts in Demand and Supply IV 
-(Figure: Shifts in Demand and Supply IV)  Look at the figure Shifts in Demand and Supply IV. The figure shows how supply and demand might shift in response to specific events. Suppose consumer incomes increase. Which panel BEST describes how this will affect the market for big-screen televisions, a normal good?

Accepted Answer

A)   panel A
B)   panel B
C)   panel C
D)   panel DE) All of the above
F) None of the above

Question 15

The demand curve for running shoes has shifted to the right. What could have caused it?

Accepted Answer

A)   a fall in the price of running shoes
B)   an increase in the price of running shoes
C)   an increase in the supply of running shoes
D)   an increase in the income of buyers of running shoesE) A) and B)
F) A) and C)

Question 16

Milk is an important ingredient in the production of ice cream. If the price of milk increases, then one would expect, holding all other things constant:

Accepted Answer

A)   the supply curve for ice cream to shift left.
B)   the supply curve for ice cream to shift right.
C)   no change in the supply curve for ice cream.
D)   a movement along the supply curve for ice cream curve, resulting in more ice cream supplied.E) A) and B)
F) B) and C)

Question 17

Use the following to answer questions:
Figure: Shifts in Demand and Supply III 
-(Figure: Shifts in Demand and Supply III)  Look at the figure Shifts in Demand and Supply III. The figure shows how supply and demand might shift in response to specific events. Suppose scientists discover that eating asparagus slows the aging process. Which panel BEST describes how this will affect the market for asparagus?

Accepted Answer

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

Question 18

You read that college tuition is rising every year, and yet more students attend college every year. Isn't this a violation of the law of demand?

Accepted Answer

Probably not. Rising tuition and rising ...

Question 19

An increase in demand, all other things unchanged, will result in _____ in equilibrium price and _____ in equilibrium quantity.

Accepted Answer

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

Question 20

When the price of armchairs increases, the:

Accepted Answer

A)   quantity supplied increases.
B)   supply increases.
C)   quantity supplied decreases.
D)   supply decreases.E) A) and D)
F) All of the above

Exam 3: Supply and Demand

Correct Answer
verified
Although Apple and Samsung compete with ...
View Answer

According to the law of demand, if the price of steak increases in Rhode Island, the demand for steak will decrease in Rhode Island.

Correct Answer
verified

Milk is an important ingredient in the production of ice cream. If the price of milk increases, then one would expect, holding all other things constant:

Correct Answer
verified

Correct Answer
verified

The market price of airline flights increased recently. Some economists suggest that the price increased because of an increase in the number of business travelers. They believe that in the market for flights:

Correct Answer
verified

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

Correct Answer
verified

Markets that are characterized by many buyers and many sellers are:

Correct Answer
verified

Suppose the equilibrium price of good X is $25 and the equilibrium quantity is 124 units. If the price of good X is $2:

Correct Answer
verified

If tortilla chips are a normal good, when there is an increase in income, equilibrium price _ and equilibrium quantity _.

Correct Answer
verified

The _____ tomatoes will decrease if fertilizer prices rise.

Correct Answer
verified

It is certain that the equilibrium price will fall when:

Correct Answer
verified

Rice and potatoes are substitutes in consumption. If the price of rice rises and there is a bumper crop of potatoes, in the market for potatoes one would expect the equilibrium price to _ and the equilibrium quantity to _.

Correct Answer
verified

An increase in demand, all other things unchanged, will result in _ in equilibrium price and _ in equilibrium quantity.

Correct Answer
verified

If the demand for tires goes down when the price of gas goes up, then tires and gas are:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

You read that college tuition is rising every year, and yet more students attend college every year. Isn't this a violation of the law of demand?

Correct Answer
verified
Probably not. Rising tuition and rising ...
View Answer

The demand curve for running shoes has shifted to the right. What could have caused it?

Correct Answer
verified

When the price of armchairs increases, the:

Correct Answer
verified

Use the following to answer questions: Figure: Demand for DVDs -(Figure: Demand for DVDs) Look at the figure Demand for DVDs. A decrease in the price of DVD players (a complement) would result in a change illustrated by the move from:

Correct Answer
verified

Exam 3: Supply and Demand

Correct AnswerverifiedAlthough Apple and Samsung compete with ...View AnswerShow Answer

According to the law of demand, if the price of steak increases in Rhode Island, the demand for steak will decrease in Rhode Island.

Correct AnswerverifiedShow Answer

Milk is an important ingredient in the production of ice cream. If the price of milk increases, then one would expect, holding all other things constant:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The market price of airline flights increased recently. Some economists suggest that the price increased because of an increase in the number of business travelers. They believe that in the market for flights:

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

Markets that are characterized by many buyers and many sellers are:

Correct AnswerverifiedShow Answer

Suppose the equilibrium price of good X is $25 and the equilibrium quantity is 124 units. If the price of good X is $2:

Correct AnswerverifiedShow Answer

If tortilla chips are a normal good, when there is an increase in income, equilibrium price _____ and equilibrium quantity _____.

Correct AnswerverifiedShow Answer

The _____ tomatoes will decrease if fertilizer prices rise.

Correct AnswerverifiedShow Answer

It is certain that the equilibrium price will fall when:

Correct AnswerverifiedShow Answer

Rice and potatoes are substitutes in consumption. If the price of rice rises and there is a bumper crop of potatoes, in the market for potatoes one would expect the equilibrium price to _____ and the equilibrium quantity to _____.

Correct AnswerverifiedShow Answer

An increase in demand, all other things unchanged, will result in _____ in equilibrium price and _____ in equilibrium quantity.

Correct AnswerverifiedShow Answer

If the demand for tires goes down when the price of gas goes up, then tires and gas are:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

You read that college tuition is rising every year, and yet more students attend college every year. Isn't this a violation of the law of demand?

Correct AnswerverifiedProbably not. Rising tuition and rising ...View AnswerShow Answer

The demand curve for running shoes has shifted to the right. What could have caused it?

Correct AnswerverifiedShow Answer

When the price of armchairs increases, the:

Correct AnswerverifiedShow Answer

Use the following to answer questions: Figure: Demand for DVDs -(Figure: Demand for DVDs) Look at the figure Demand for DVDs. A decrease in the price of DVD players (a complement) would result in a change illustrated by the move from:

Correct AnswerverifiedShow Answer

Correct Answer
verified
Although Apple and Samsung compete with ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

If tortilla chips are a normal good, when there is an increase in income, equilibrium price _ and equilibrium quantity _.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Rice and potatoes are substitutes in consumption. If the price of rice rises and there is a bumper crop of potatoes, in the market for potatoes one would expect the equilibrium price to _ and the equilibrium quantity to _.

Correct Answer
verified

An increase in demand, all other things unchanged, will result in _ in equilibrium price and _ in equilibrium quantity.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Probably not. Rising tuition and rising ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified