QUESTION 1
The demand for oranges increases while the supply decreases. The equilibrium price of oranges ________, and the equilibrium quantity ________.
| | falls; increases |
| | falls; perhaps changes but we can't say if it increases, decreases, or stays the same |
| | rises; decreases |
| | rises; perhaps changes but we can't say if it increases, decreases, or stays the same |
1 points
QUESTION 2
Assume a competitive market is in equilibrium. There is an increase in demand, but no change in supply. As a result the equilibrium price ________, and the equilibrium quantity is ________.
| | rises; increases |
| | falls; decreases |
| | falls; does not change |
| | rises; does not change |
1 points
QUESTION 3
Bagels and cream cheese are complementary goods. Suppose that the price for flour, which is used to produce bagels, increases. The equilibrium price of cream cheese ________ and the equilibrium quantity of cream cheese ________.
| | does not change; does not change |
| | rises; increases |
| | falls; decreases |
| | rises; decreases |
1 points
QUESTION 4
If consumers buy a large number of plug-in electric cars, the equilibrium price of electricity will ________ and the equilibrium quantity of electricity will ________.
| | rise; increase |
| | rise; decrease |
| | fall; increase |
| | fall; decrease |
1 points
QUESTION 5
Which of the following shifts the supply curve for oranges?
| | an increase in income for all orange consumers if oranges are a normal good |
| | disastrous weather that destroys about half of this year's orange crop |
| | an increase in the price of bananas, a substitute in consumption for oranges |
| | a newly discovered increase in the nutritional value of oranges |
1 points
QUESTION 6
Which of the following shifts the supply curve of rutabagas rightward? (A rutabaga is a potato-like vegetable.)
| | normal goods in production. |
| | an exceptionally cold summer that killed much of the rutabaga crop. |
| | a fall in the price of fertilizer used to grow rutabagas. |
| | an increase in the price of a rutabaga |
1 points
QUESTION 7
Suppose over the next several years the productivity of firms producing electric cars improves dramatically. The advance in productivity leads to
| | an increase in the supply electric cars so that the supply curve shifts rightward. |
| | an increase in the supply of electric cars so that the supply curve shifts leftward. |
| | a decrease in the supply of electric cars so that the supply curve shifts rightward. |
| | a decrease in the supply of electric cars so that the supply curve shifts leftward. |
1 points
QUESTION 8
Hot dogs and hot dog buns are complements. If the price of a hot dog falls, then
| | the demand for hot dogs will increase. |
| | the demand for hot dog buns will decrease. |
| | the quantity demanded of hotdogs will decrease. |
| | the demand for hot dog buns will increase. |
1 points
QUESTION 9
Demand curves slope ________ because as the price increases and other things remain the same, the quantity demanded ________.
| | upward; increases |
| | downward; decreases |
| | upward; decreases |
| | downward; increases |
1 points
QUESTION 10
Water bottlers announce that next month the price of bottled water will rise by 25 percent. Which of the following occurs immediately?
| | The quantity of bottled water demanded increases. |
| | The demand for bottled water increases. |
| | The quantity of bottled water demanded decreases. |
| | The demand for bottled water decreases. |
1 points
QUESTION 11
If the price of carrots is below the equilibrium price, the
| | quantity supplied of carrots exceeds the quantity demanded and a shortage exists. |
| | quantity demanded of carrots exceeds the quantity supplied and a shortage exists. |
| | quantity supplied of carrots exceeds the quantity demanded and a surplus exists. |
| | quantity demanded of carrots exceeds the quantity supplied and a surplus exists. |
1 points
QUESTION 12
Which of the following is true regarding demand?
i. Demand is the relationship between quantity demanded and the price of a good when all other influences on buying plans remain the same.
ii. Demand refers to one quantity at one time.
iii. "Demand" and " quantity demanded" are the same thing.
| | both i and ii |
| | i only. |
| | ii only. |
| | iii only. |
1 points
QUESTION 13
Suppose the current price of a pound of steak is $6 per pound and the equilibrium price is $9 per pound. What takes place?
| | There is a shortage, so the price rises and quantity demanded decreases. |
| | There is a shortage, so the price rises and quantity demanded increases. |
| | There is a shortage, so the price falls and quantity demanded increases. |
| | There is a surplus, so the price falls and quantity demanded increases. |
1 points
QUESTION 14
The number of corn producers increases, so the supply of corn ________ and the supply curve of corn ________.
| | decreases; shifts leftward |
| | decrease; shifts rightward |
| | increases; shifts rightward |
| | increases; shifts leftward |
1 points
QUESTION 15
Market equilibrium
i. can never occur because there are always people who want a good but cannot afford it.
ii. occurs at the intersection of the supply and demand curves.
iii. is the point where the price equals the quantity.
| | iii only |
| | ii and iii |
| | ii only |
| | i only |
1 points
QUESTION 16
Milk can be used to produce cheese or butter. If the price of a pound of butter rises, what happens to the supply of cheese?
| | The supply of cheese stays the same and there is a decrease in the quantity supplied of cheese. |
| | The supply of cheese decreases. |
| | The supply of cheese stays the same and there is no change in the quantity supplied of cheese. |
| | The supply of cheese increases. |
1 points
QUESTION 17
Consumers regard Dell computers and Apple computers as substitutes. If the price of a Dell computer decreases, the
| | demand for Dell computers decreases. |
| | demand for Apple computers increases. |
| | demand for Apple computers decreases. |
| | demand for Dell computers increases. |
1 points
QUESTION 18
Suppose the current price of a pound of steak is $12 per pound and the equilibrium price is $9 per pound. In this case, there is a
| | surplus, so the price rises and quantity demanded increases. |
| | shortage, so the price rises and quantity demanded decreases. |
| | surplus, so the price falls and quantity demanded increases. |
| | shortage, so the price falls and quantity demanded increases. |
1 points
QUESTION 19
Plywood is used in the construction of houses. If the price of plywood rises, what happens to the supply of houses?
| | The supply increases so that the supply curve shifts rightward. |
| | The quantity supplied increases but there is no shift in the supply curve. |
| | The supply decreases so that the supply curve shifts leftward. |
| | The quantity supplied decreases but there is no shift in the supply curve. |
1 points
QUESTION 20
In stores, it is common to find seasonal products marked down when the season ends. What explains this behavior?
| | The store is trying to increase its customers' demand for the product. |
| | The law of demand is being used to increase the quantity demanded. |
| | The store manager must be trying to drive away customers by selling low quality products. |
| | The store is trying to increase its consumer's incomes by increasing their purchasing power. |
1 points
QUESTION 21
Suppose that the price of flour used to produce bagels increases. Hence the equilibrium price of a bagel ________ and the equilibrium quantity ________.
| | rises; increases |
| | rises; decreases |
| | falls; increases |
| | falls; decreases |
1 points
QUESTION 22
If both the supply and demand curves shift simultaneously, we can always predict what will happen to
| | either the price or the quantity, but not both. |
| | only the quantity. |
| | only the price. |
| | both the price and the quantity. |
1 points
QUESTION 23
If income increases and the demand for bus rides decreases,
| | bus rides are a substitute good. |
| | consumers are behaving irrationally. |
| | bus rides are an inferior good. |
| | bus rides are a normal good. |
1 points
QUESTION 24
A surplus of cardboard boxes means that
| | at the current price of a cardboard box, the quantity demanded equals the quantity supplied and the price will fall to restore the equilibrium.. |
| | the current price of a cardboard box is less than the equilibrium price. |
| | at the current price of a cardboard box, the quantity demanded exceeds the quantity supplied. |
| | at the current price of a cardboard box, the quantity demanded is less than the quantity supplied. |
1 points
QUESTION 25
If a freeze destroys oranges before they are harvested, the equilibrium price of an orange ________ and the equilibrium quantity ________.
| | rises; increases |
| | rises; decreases |
| | falls; increases |
| | falls; decreases |
1 points