Question 1

Which of the following would shift the supply curve for MP3 players to the left?

Accepted Answer

A)  an increase in the price of an input used to produce MP3 players
B)  a decrease in consumer tastes for MP3 players
C)  an increase in the number of firms that produce MP3 players
D)  an increase in the productivity of the workers who produce MP3 playersE) A) and B)
F) A) and C)

Question 2

A movement along the demand curve for toothpaste would be caused by

Accepted Answer

A)  a change in the price of toothbrushes.
B)  a change in consumer income.
C)  a change in the price of toothpaste.
D)  a change in population.E) A) and D)
F) A) and C)

Question 3

Which of the following will shift the demand curve for a good?

Accepted Answer

A)  a change in the technology used to produce the good
B)  an increase in the price of the good
C)  a decrease in the price of a complementary good
D)  a decrease in the price of the goodE) All of the above
F) B) and C)

Question 4

Suppose that when the price of hamburgers decreases,the Landry family decreases their purchases of chicken nuggets.To the Landry family

Accepted Answer

A)  hamburgers and chicken nuggets are complements.
B)  hamburgers and chicken nuggets are inferior goods.
C)  hamburgers and chicken nuggets are normal goods.
D)  hamburgers and chicken nuggets are substitutes.E) A) and D)
F) A) and C)

Question 5

Assume that both the demand curve and the supply curve for MP3 players shift to the right,but the demand curve shifts more than the supply curve.As a result,

Accepted Answer

A)  both the equilibrium price and quantity of MP3 players will increase.
B)  the equilibrium price of MP3 players will increase;the equilibrium quantity may increase or decrease.
C)  the equilibrium price of MP3 players may increase or decrease;the equilibrium quantity will increase.
D)  the equilibrium price of MP3 players will decrease;the equilibrium quantity may increase or decrease.E) A) and B)
F) B) and D)

Question 6

If consumers believe the price of iPads will decrease in the future,this will cause the demand for iPads to decrease now.

Accepted Answer

A) True 
 B)False

Question 7

What would happen in the market for laser eye surgery if insurance companies started to cover a portion of the price of voluntary procedures?

Accepted Answer

A)  Demand will increase,but this will not shift the supply curve.
B)  Supply will increase,but this will not shift the demand curve.
C)  Demand and supply will both increase.
D)  Demand will increase and supply will decrease.E) B) and C)
F) All of the above

Question 8

If,for a product,the quantity supplied exceeds the quantity demanded,the market price will fall until

Accepted Answer

A)  the quantity demanded exceeds the quantity supplied.The market will then be in equilibrium.
B)  quantity demanded equals quantity supplied.The equilibrium price will then be lower than the market price.
C)  all consumers will be able to afford the product.
D)  quantity demanded equals quantity supplied.The market price will then equal the equilibrium price.E) None of the above
F) B) and C)

Question 9

Studies have shown links between calcium consumption and a reduction in osteoporosis.How does this affect the market for calcium?

Accepted Answer

A)  The calcium supply curve shifts to the right because of a change in tastes in favour of calcium.
B)  The calcium demand curve shifts to the right because of a change in tastes in favour of calcium.
C)  The calcium demand curve shifts to the left because this new information will increase the price of calcium.
D)  The calcium supply curve shifts to the left because this new information will increase the price of calcium.E) A) and D)
F) A) and B)

Question 10

How does the increasing use of MP3 players affect the market for compact discs?

Accepted Answer

A)  The demand curve for compact discs shifts to the right.
B)  The supply curve for compact discs shifts to the left.
C)  The supply curve for compact discs shifts to the right.
D)  The demand curve for compact discs shifts to the left.E) None of the above
F) All of the above

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.E) None of the above
F) B) and C)

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.An increase in price of inputs 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.E) C) and D)
F) B) and D)

Question 13

The substitution effect explains why there is a direct relationship between the price of a product and the quantity of the product demanded.

Accepted Answer

A) True 
 B)False

Question 14

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.E) A) and D)
F) None of the above

Question 15

If the price of music downloads was to decrease,then

Accepted Answer

A)  the demand for MP3 players would decrease.
B)  the demand for MP3 players would increase.
C)  the supply of MP3 players would increase.
D)  the quantity demanded of MP3 players would decrease.E) A) and D)
F) B) and D)

Question 16

Assume that both the demand curve and the supply curve for MP3 players shift to the right,but the supply curve shifts more than the demand curve.As a result,

Accepted Answer

A)  both the equilibrium price and quantity of MP3 players will decrease.
B)  the equilibrium price of MP3 players will decrease;the equilibrium quantity will increase.
C)  the equilibrium price of MP3 players may increase or decrease;the equilibrium quantity will decrease.
D)  the equilibrium price of MP3 players will increase;the equilibrium quantity will decrease.E) A) and B)
F) A) and C)

Question 17

Harvey Rabbitt pays for monthly cable TV service.Last week the cable company informed Harvey that his monthly cable price would go down because the city council has granted approval for three new cable companies to service his area.How is the market for cable TV services affected by this?

Accepted Answer

A)  There is an increase in the supply of cable TV service.
B)  There is a decrease in the demand for cable TV service.
C)  There is a decrease in the quantity of cable TV service supplied.
D)  There is a decrease in the supply of cable TV service.E) A) and D)
F) C) and D)

Question 18

Which of the following would cause an increase in the equilibrium price and an increase in the equilibrium quantity of watermelons?

Accepted Answer

A)  an increase in demand and an increase in supply
B)  an increase in supply
C)  an increase in supply and an increase in demand greater than the increase in supply
D)  a decrease in demand and an increase in supplyE) A) and B)
F) C) and D)

Question 19

What are the two effects that explain the Law of Demand? Briefly explain each effect.

Accepted Answer

The two effects that explain the Law of ...

Question 20

Which of the following would cause a decrease in the equilibrium price and an increase in the equilibrium quantity of salmon?

Accepted Answer

A)  a decrease in demand and an increase in supply
B)  an increase in supply
C)  an increase in supply and an increase in demand greater than the increase in supply
D)  a decrease in demand and a decrease in supplyE) C) and D)
F) A) and B)

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

Suppose that when the price of hamburgers decreases,the Landry family decreases their purchases of chicken nuggets.To the Landry family

Correct AnswerverifiedShow Answer

Which of the following would cause a decrease in the equilibrium price and an increase in the equilibrium quantity of salmon?

Correct AnswerverifiedShow Answer

If consumers believe the price of iPads will decrease in the future,this will cause the demand for iPads to decrease now.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What would happen in the market for laser eye surgery if insurance companies started to cover a portion of the price of voluntary procedures?

Correct AnswerverifiedShow Answer

If,for a product,the quantity supplied exceeds the quantity demanded,the market price will fall until

Correct AnswerverifiedShow Answer

Which of the following will shift the demand curve for a good?

Correct AnswerverifiedShow Answer

How does the increasing use of MP3 players affect the market for compact discs?

Correct AnswerverifiedShow Answer

Studies have shown links between calcium consumption and a reduction in osteoporosis.How does this affect the market for calcium?

Correct AnswerverifiedShow Answer

A movement along the demand curve for toothpaste would be caused by

Correct AnswerverifiedShow Answer

Assume that both the demand curve and the supply curve for MP3 players shift to the right,but the demand curve shifts more than the supply curve.As a result,

Correct AnswerverifiedShow Answer

What are the two effects that explain the Law of Demand? Briefly explain each effect.

Correct AnswerverifiedThe two effects that explain the Law of ...View AnswerShow 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 3-2 -Refer to Figure 3-2.An increase in price of inputs would be represented by a movement from

Correct AnswerverifiedShow Answer

Harvey Rabbitt pays for monthly cable TV service.Last week the cable company informed Harvey that his monthly cable price would go down because the city council has granted approval for three new cable companies to service his area.How is the market for cable TV services affected by this?

Correct AnswerverifiedShow Answer

Assume that both the demand curve and the supply curve for MP3 players shift to the right,but the supply curve shifts more than the demand curve.As a result,

Correct AnswerverifiedShow Answer

Which of the following would shift the supply curve for MP3 players to the left?

Correct AnswerverifiedShow Answer

If the price of music downloads was to decrease,then

Correct AnswerverifiedShow Answer

Which of the following would cause an increase in the equilibrium price and an increase in the equilibrium quantity of watermelons?

Correct AnswerverifiedShow Answer

The substitution effect explains why there is a direct relationship between the price of a product and the quantity of the product demanded.

Correct AnswerverifiedShow Answer

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The two effects that explain the Law of ...
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