Question 1

Which of the following will increase the demand for large automobiles?

Accepted Answer

A)   A fall in the price of small automobiles.
B)   A rise in insurance rates for large automobiles.
C)   A fall in the price of large automobiles.
D)   A rise in buyers' incomes (assuming large automobiles to be a normal good) .E) B) and C)
F) All of the above

Question 2

Which of the following could cause the supply of carrots to decrease?

Accepted Answer

A)   Consumers' incomes decrease.
B)   There is a technological advance in carrot production.
C)   Fertilizer costs increase.
D)   The number of farmers growing carrots increases.
E)   The price of carrots decreases.F) All of the above
G) B) and D)

Question 3

Which of the following would most likely increase the demand for televisions?

Accepted Answer

A)   A decrease in the price of televisions.
B)   A decline in consumer income.
C)   A decrease in the price of home stereo systems, a substitute for televisions.
D)   A decrease in the price of DVD players, a product that is complementary with televisions.E) A) and C)
F) None of the above

Question 4

Which of the following will cause a movement upward along a supply curve?

Accepted Answer

A)   Increases in raw-material costs.
B)   Increases in labor costs.
C)   Increases in the cost of machinery.
D)   Increases in the market price of a good, other things being equal.E) A) and D)
F) A) and C)

Question 5

If a decrease in the price of good Y causes the demand for good Z to decrease,this indicates that:

Accepted Answer

A)   Y and Z are complements.
B)   Y and Z are substitutes.
C)   Y and Z are unrelated.
D)   Y is a normal good and Z is an inferior good.E) C) and D)
F) A) and B)

Question 6

Assuming that hamburgers and hot dogs are substitutes,an increase in the price of hamburgers,other things being equal,results in a:

Accepted Answer

A)   rightward shift in the demand curve for hot dogs.
B)   leftward shift in the demand curve for hamburgers.
C)   rightward shift in the demand curve for hamburgers.
D)   leftward shift in the demand curve for hot dogs.E) A) and B)
F) A) and C)

Question 7

Tasha decides that when homes in her neighborhood are selling for $150,000 she will not sell her home.When average prices rise to $175,000,she decides that she will put her home on the market.This is an example of:

Accepted Answer

A)   market demand.
B)   market-day supply.
C)   an excess supply of homes.
D)   a positively-sloped supply curve.
E)   a negatively-sloped supply curve.F) A) and B)
G) A) and E)

Question 8

Which of the following pairs of goods would be considered complementary?

Accepted Answer

A)   Coca-Cola and Pepsi.
B)   Computers and computer software.
C)   Radios and televisions.
D)   Mass transit and private automobiles.
E)   Compact discs and cassette tapes.F) C) and D)
G) C) and E)

Question 9

When firms advertise their products,they are attempting to:

Accepted Answer

A)   shift the supply curve of the product to the right.
B)   shift the supply curve of the product to the left.
C)   shift the demand for the product to the right.
D)   shift the demand for the product to the left.
E)   create a surplus of the product.F) A) and D)
G) A) and C)

Question 10

Assuming that shoe repair services are an inferior good,an increase in consumer income,other things being equal,will cause a(n) :

Accepted Answer

A)   leftward shift in the demand curve.
B)   downward movement along the demand curve.
C)   rightward shift in the demand curve.
D)   upward movement along the demand curve.E) A) and B)
F) None of the above

Question 11

The "other things being equal" clause in the law of demand does not allow which of the following factors to change?

Accepted Answer

A)   Consumer income.
B)   The prices of other goods.
C)   Consumer tastes and preferences.
D)   All of the above.E) B) and D)
F) C) and D)

Question 12

When there is a surplus of a product in a market the:

Accepted Answer

A)   price will rise.
B)   price must be above the equilibrium price.
C)   producers will expand output and sales will rise.
D)   price must be below the equilibrium price.E) All of the above
F) B) and C)

Question 13

Which of the following explain better the fact that computers are cheaper now than 10 years ago?

Accepted Answer

A)  c and d.
B)  c and e.
C)  The technology used in the production of computers has improved during this period.
D)  Resources used in the production of computers have become cheaper during this period.
E)  The demand for computers has increased substantially during this period.F) None of the above
G) B) and E)

Question 14

Assume Congress passes a new tax of $2.00 per pack on cigarettes.The effect on the supply curve is a(n) :

Accepted Answer

A)   decrease in supply.
B)   increase in supply.
C)   decrease in quantity supplied.
D)   increase in quantity supplied.E) None of the above
F) C) and D)

Question 15

If the demand for a good increases when the price of another good increases,then these goods are:

Accepted Answer

A)   complementary in consumption.
B)   complementary in production.
C)   substitute in production.
D)   substitute in consumption.
E)   neither substitutes nor complementary.F) D) and E)
G) B) and E)

Question 16

A demand curve for The Steel Porcupines' concert tickets would show the:

Accepted Answer

A)   quality of service that customers demand when they buy a ticket.
B)   number of people who like to attend the concert.
C)   number of tickets the promoters are willing to sell at each price.
D)   number of concert tickets that will be purchased at each price.E) None of the above
F) All of the above

Question 17

Which of the following will not shift the demand curve for grapefruit?

Accepted Answer

A)   An announcement that eating a grapefruit before every meal will induce weight loss.
B)   A technical development that allows machines to replace the workers who harvest grapefruit.
C)   An announcement that eating lots of grapefruit causes skin problems.
D)   A newspaper story reporting that the preference for oranges has skyrocketed.
E)   An announcement that grapefruit will definitely cost more next week.F) A) and E)
G) B) and D)

Question 18

Which of the following would lead to an increase in the demand for computer software?

Accepted Answer

A)   A decrease in the price of computer software.
B)   A decrease in the price of personal computers.
C)   An decrease in the cost of producing computer software.
D)   An decrease in personal income.E) A) and C)
F) A) and B)

Question 19

According to the law of demand,if:

Accepted Answer

A)   product price increases, quantity demanded will decrease.
B)   consumer income increases, quantity demanded will increase.
C)   product price increases, quantity demanded will increase.
D)   consumer income increases, quantity demanded will decrease.
E)   supply increases, demand will increase.F) B) and D)
G) A) and D)

Question 20

Assuming that automobiles are normal goods,a rise in consumer income,other things being equal,will cause:

Accepted Answer

A)   the demand curve for automobiles to shift to the left.
B)   the demand curve for automobiles to shift to the right.
C)   a downward movement along the demand curve for automobiles.
D)   an upward movement along the demand curve for automobiles.E) All of the above
F) None of the above

Exam 3: Part 1: Market Demand and Supply

Which of the following would most likely increase the demand for televisions?

Correct AnswerverifiedShow Answer

Which of the following will not shift the demand curve for grapefruit?

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If the demand for a good increases when the price of another good increases,then these goods are:

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Assuming that automobiles are normal goods,a rise in consumer income,other things being equal,will cause:

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If a decrease in the price of good Y causes the demand for good Z to decrease,this indicates that:

Correct AnswerverifiedShow Answer

Assuming that hamburgers and hot dogs are substitutes,an increase in the price of hamburgers,other things being equal,results in a:

Correct AnswerverifiedShow Answer

Which of the following pairs of goods would be considered complementary?

Correct AnswerverifiedShow Answer

Tasha decides that when homes in her neighborhood are selling for $150,000 she will not sell her home.When average prices rise to $175,000,she decides that she will put her home on the market.This is an example of:

Correct AnswerverifiedShow Answer

Which of the following would lead to an increase in the demand for computer software?

Correct AnswerverifiedShow Answer

Which of the following will increase the demand for large automobiles?

Correct AnswerverifiedShow Answer

A demand curve for The Steel Porcupines' concert tickets would show the:

Correct AnswerverifiedShow Answer

When firms advertise their products,they are attempting to:

Correct AnswerverifiedShow Answer

According to the law of demand,if:

Correct AnswerverifiedShow Answer

The "other things being equal" clause in the law of demand does not allow which of the following factors to change?

Correct AnswerverifiedShow Answer

Assuming that shoe repair services are an inferior good,an increase in consumer income,other things being equal,will cause a(n) :

Correct AnswerverifiedShow Answer

When there is a surplus of a product in a market the:

Correct AnswerverifiedShow Answer

Which of the following could cause the supply of carrots to decrease?

Correct AnswerverifiedShow Answer

Assume Congress passes a new tax of $2.00 per pack on cigarettes.The effect on the supply curve is a(n) :

Correct AnswerverifiedShow Answer

Which of the following will cause a movement upward along a supply curve?

Correct AnswerverifiedShow Answer

Which of the following explain better the fact that computers are cheaper now than 10 years ago?

Correct AnswerverifiedShow Answer

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