Question 1

A decrease (leftward shift)  in the supply for a good will tend to cause

Accepted Answer

A)   an increase in the equilibrium price and quantity.
B)   a decrease in the equilibrium price and an increase in the equilibrium quantity.
C)   a shift in the demand curve to the left
D)   a decrease in the equilibrium price and quantity.
E)   an increase in the equilibrium price and a decrease in the equilibrium quantity.F) A) and E)
G) A) and D)

Question 2

A perfectly competitive market consists of products that are all slightly different from one another.

Accepted Answer

A) True 
 B)False

Question 3

An advance in the technology employed to manufacture roller blades will result in a decrease in the equilibrium price and an increase in the equilibrium quantity bought and sold in the market for roller blades.

Accepted Answer

A) True 
 B)False

Question 4

If the price of a good is above the equilibrium price,

Accepted Answer

A)   there is a surplus and the price will rise.
B)   there is a shortage and the price will fall.
C)   there is a shortage and the price will rise.
D)   the quantity demanded is equal to the quantity supplied and the price remains unchanged.
E)   there is a surplus and the price will fall.F) A) and B)
G) A) and C)

Question 5

The market supply curve is the horizontal summation of the individual supply curves.

Accepted Answer

A) True 
 B)False

Question 6

If the same dairy can produce either whole milk or skimmed milk, an increase in the profitability of whole milk results in

Accepted Answer

A)   a decrease in the quantity supplied of whole milk.
B)   an increase in the supply of whole milk.
C)   a decrease in the supply of skimmed milk.
D)   an increase in the supply of skimmed milk.E) B) and C)
F) All of the above

Question 7

Suppose both buyers and sellers of wheat expect the price of wheat to rise in the near future. What would we expect to happen to the equilibrium price and quantity in the market for wheat today?

Accepted Answer

A)   The impact on both price and quantity is ambiguous.
B)   Price will decrease; quantity is ambiguous.
C)   Price will increase; quantity will decrease.
D)   Price will increase; quantity is ambiguous.
E)   Price will increase; quantity will increase.F) A) and E)
G) None of the above

Question 8

The demand curve for iPhones shows the quantity of iPhones demanded

Accepted Answer

A)   by suppliers of those phones.
B)   at the equilibrium price for iPhones.
C)   at each level of income.
D)   at each possible price of iPhones.E) A) and D)
F) B) and C)

Question 9

The discovery of new gold in South America will __________ the price of gold and __________ the quantity of gold traded.

Accepted Answer

A)   raise; raise
B)   lower; raise
C)   raise; lower
D)   lower; lowerE) C) and D)
F) A) and D)

Question 10

Suppose there is an increase in both the supply and demand for personal computers. In the market for personal computers, we would expect

Accepted Answer

A)   the equilibrium quantity to rise and the equilibrium price to rise.
B)   the equilibrium quantity to rise and the equilibrium price to fall.
C)   the equilibrium quantity to rise and the equilibrium price to remain constant.
D)   the change in the equilibrium quantity to be ambiguous and the equilibrium price to rise.
E)   the equilibrium quantity to rise and the change in the equilibrium price to be ambiguous.F) A) and C)
G) A) and E)

Question 11

If the price of a good is below the equilibrium price,

Accepted Answer

A)   there is a shortage and the price will rise.
B)   the quantity demanded is equal to the quantity supplied and the price remains unchanged.
C)   there is a shortage and the price will fall.
D)   there is a surplus and the price will rise.
E)   there is a surplus and the price will fall.F) A) and B)
G) D) and E)

Question 12

If there is a shortage of a good, then the price of that good tends to fall.

Accepted Answer

A) True 
 B)False

Question 13

An increase in the price of steel will shift the supply of cars to the right.

Accepted Answer

A) True 
 B)False

Question 14

Suppose we are analysing the market for hot chocolate. Graphically illustrate the impact each of the following would have on demand or supply. Also show how equilibrium price and equilibrium quantity would change.
a) Winter starts, and the weather turns sharply colder.
b) The price of tea, a substitute for hot chocolate, falls.
c) The price of cocoa beans decreases.
d) The price of whipped cream falls.
e) A better method of harvesting cocoa beans is introduced.
f) The Surgeon General of the U.S. announces that hot chocolate cures acne.
g) Protesting farmers dump millions of gallons of milk, causing the price of milk to rise.
h) Consumer income falls because of a recession, and hot chocolate is considered a normal good.
i) Producers expect the price of hot chocolate to increase next month.
j) Currently, the price of hot chocolate is $0.50 per cup above equilibrium.

Accepted Answer

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

...

Question 15

The law of demand states that an increase in the price of a good

Accepted Answer

A)   increases the supply of that good.
B)   decreases the quantity demanded for that good.
C)   decreases the demand for that good.
D)   increases the quantity supplied of that good.E) A) and D)
F) None of the above

Question 16

All of the following shift the supply of watches to the right except

Accepted Answer

A)   an advance in the technology used to manufacture watches.
B)   an increase in the price of watches.
C)   a fall in the cost of metals used in watch production
D)   a decrease in the wage of workers employed to manufacture watches.
E)   manufacturers' expectation of lower watch prices in the future.F) A) and E)
G) C) and D)

Question 17

When a market is in equilibrium,

Accepted Answer

A)   quantity demanded will equal quantity supplied.
B)   a shortage will be present.
C)   a surplus will be present.
D)   sellers will continue to expand production to increase revenues.E) All of the above
F) None of the above

Question 18

If pencils and paper are complements, an increase in the price of pencils causes the demand for paper to decrease or shift to the left.

Accepted Answer

A) True 
 B)False

Question 19

If an increase in the price of coffee leads to an increase in the demand for tea, then coffee and tea are likely to be

Accepted Answer

A)   complements.
B)   inferior goods
C)   normal goods
D)   substitutesE) A) and B)
F) A) and C)

Question 20

Which of the following are the best examples of substitute goods?

Accepted Answer

A)   personal computers and computer software programs
B)   milk and cookies
C)   Samsung Galaxy and Apple iPhone
D)   hot dogs and mustardE) A) and D)
F) C) and D)

Exam 3: The Market Forces of Supply and Demand

If the same dairy can produce either whole milk or skimmed milk, an increase in the profitability of whole milk results in

Correct Answer
verified

Suppose there is an increase in both the supply and demand for personal computers. In the market for personal computers, we would expect

Correct Answer
verified

A perfectly competitive market consists of products that are all slightly different from one another.

Correct Answer
verified

When a market is in equilibrium,

Correct Answer
verified

All of the following shift the supply of watches to the right except

Correct Answer
verified

The law of demand states that an increase in the price of a good

Correct Answer
verified

The market supply curve is the horizontal summation of the individual supply curves.

Correct Answer
verified

If an increase in the price of coffee leads to an increase in the demand for tea, then coffee and tea are likely to be

Correct Answer
verified

The discovery of new gold in South America will the price of gold and the quantity of gold traded.

Correct Answer
verified

If pencils and paper are complements, an increase in the price of pencils causes the demand for paper to decrease or shift to the left.

Correct Answer
verified

Correct Answer
verified
(a)
(b) (c)
(d) (e)
(f) (g)
(h) ...
View Answer

If the price of a good is below the equilibrium price,

Correct Answer
verified

An increase in the price of steel will shift the supply of cars to the right.

Correct Answer
verified

Suppose both buyers and sellers of wheat expect the price of wheat to rise in the near future. What would we expect to happen to the equilibrium price and quantity in the market for wheat today?

Correct Answer
verified

The demand curve for iPhones shows the quantity of iPhones demanded

Correct Answer
verified

A decrease (leftward shift) in the supply for a good will tend to cause

Correct Answer
verified

If the price of a good is above the equilibrium price,

Correct Answer
verified

If there is a shortage of a good, then the price of that good tends to fall.

Correct Answer
verified

Which of the following are the best examples of substitute goods?

Correct Answer
verified

An advance in the technology employed to manufacture roller blades will result in a decrease in the equilibrium price and an increase in the equilibrium quantity bought and sold in the market for roller blades.

Correct Answer
verified

Exam 3: The Market Forces of Supply and Demand

If the same dairy can produce either whole milk or skimmed milk, an increase in the profitability of whole milk results in

Correct AnswerverifiedShow Answer

Suppose there is an increase in both the supply and demand for personal computers. In the market for personal computers, we would expect

Correct AnswerverifiedShow Answer

A perfectly competitive market consists of products that are all slightly different from one another.

Correct AnswerverifiedShow Answer

When a market is in equilibrium,

Correct AnswerverifiedShow Answer

All of the following shift the supply of watches to the right except

Correct AnswerverifiedShow Answer

The law of demand states that an increase in the price of a good

Correct AnswerverifiedShow Answer

The market supply curve is the horizontal summation of the individual supply curves.

Correct AnswerverifiedShow Answer

If an increase in the price of coffee leads to an increase in the demand for tea, then coffee and tea are likely to be

Correct AnswerverifiedShow Answer

The discovery of new gold in South America will __________ the price of gold and __________ the quantity of gold traded.

Correct AnswerverifiedShow Answer

If pencils and paper are complements, an increase in the price of pencils causes the demand for paper to decrease or shift to the left.

Correct AnswerverifiedShow Answer

Correct Answerverified(a) (b) (c) (d) (e) (f) (g) (h) ...View AnswerShow Answer

If the price of a good is below the equilibrium price,

Correct AnswerverifiedShow Answer

An increase in the price of steel will shift the supply of cars to the right.

Correct AnswerverifiedShow Answer

Suppose both buyers and sellers of wheat expect the price of wheat to rise in the near future. What would we expect to happen to the equilibrium price and quantity in the market for wheat today?

Correct AnswerverifiedShow Answer

The demand curve for iPhones shows the quantity of iPhones demanded

Correct AnswerverifiedShow Answer

A decrease (leftward shift) in the supply for a good will tend to cause

Correct AnswerverifiedShow Answer

If the price of a good is above the equilibrium price,

Correct AnswerverifiedShow Answer

If there is a shortage of a good, then the price of that good tends to fall.

Correct AnswerverifiedShow Answer

Which of the following are the best examples of substitute goods?

Correct AnswerverifiedShow Answer

An advance in the technology employed to manufacture roller blades will result in a decrease in the equilibrium price and an increase in the equilibrium quantity bought and sold in the market for roller blades.

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

The discovery of new gold in South America will the price of gold and the quantity of gold traded.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
(a)
(b) (c)
(d) (e)
(f) (g)
(h) ...
View 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