question
As price rises
answer
quantity supplied rises
question
Goods for which demand is directly (positively) related to income are called
answer
normal goods
question
Change in which of the following would not quickly cause a shft in demand?
answer
a) Number of buyers
b) Tastes
c) Buyers' perception of quality of product
d) Income
----->e) Price
b) Tastes
c) Buyers' perception of quality of product
d) Income
----->e) Price
question
A shift in the supply curve for gasoline in the United States would result if _
answer
a) people decided to travel more by automobile
----b) the OPEC nations decided to stop sales of crude oil to the United States
c) the price of gasoline increased
d) the price of gasoline decreased
e) the price of mass transit increased
----b) the OPEC nations decided to stop sales of crude oil to the United States
c) the price of gasoline increased
d) the price of gasoline decreased
e) the price of mass transit increased
question
Changes in supply may be caused by changes in
answer
a) the cost of factors of production
b) the level of technology
c) the number of suppliers
-------d) all of the above
e) none of the above
b) the level of technology
c) the number of suppliers
-------d) all of the above
e) none of the above
question
Each of the following may lead to a change in the demand for product A except
answer
------a) a change in the price of product A
b) a change in people's taste for product A
c) a change in people's incomes
ad) change in the price of product B (a substitute for product A)
b) a change in people's taste for product A
c) a change in people's incomes
ad) change in the price of product B (a substitute for product A)
question
The retail market for gasoline is
answer
----a) local
b) regional
c) national
d) international
b) regional
c) national
d) international
question
Suppose the price of a service falls and people buy more of that service. What has happened?
answer
---a) Quantity demanded changed.
b) Demand increased.
c) Demand decreased.
b) Demand increased.
c) Demand decreased.
question
An increase in the wage rate paid to construction workers will tend to
answer
a) decrease the demand for homes
b) cause a movement along the supply curve for new homes
----c) decrease the supply of new homes
d) increase the supply of new homes
b) cause a movement along the supply curve for new homes
----c) decrease the supply of new homes
d) increase the supply of new homes
question
If the rise in the price of service A leads to a fall in the price of service B, we may conclude that,
answer
a) services A and B are substitutes
-----b) services A and B are complements
c) services A and B are neither substitutes nor complements
-----b) services A and B are complements
c) services A and B are neither substitutes nor complements
question
An increase in the demand for steak could be caused quickly by a(n)
answer
a) fall in the price of steak
b) increase in the supply of steak
----c) expectation of a future cutback in the supply of steak
d) a decline in the price of chicken
b) increase in the supply of steak
----c) expectation of a future cutback in the supply of steak
d) a decline in the price of chicken
question
The demand for an inferior good is
answer
a) positively related to its own price
-----b) negatively related to income
c) unaffected by consumer tastes and preferences
d) insensitive to changes in prices of its complements
-----b) negatively related to income
c) unaffected by consumer tastes and preferences
d) insensitive to changes in prices of its complements
question
A decrease in supply can be brought about by
answer
a) a price increase
b) a price decrease
-----c) a random event like a hurricane or an earthquake
d) a change in consumers' tastes or preferences
b) a price decrease
-----c) a random event like a hurricane or an earthquake
d) a change in consumers' tastes or preferences
question
Which statement is true?
answer
a) A change in demand is the same thing as a change in the quantity demanded.
b) The supply curve moves upward to the left.
c) The law of demand is no longer valid.
-----d) A rise in income will increase the demand for normal goods.
b) The supply curve moves upward to the left.
c) The law of demand is no longer valid.
-----d) A rise in income will increase the demand for normal goods.
question
When market price is above equilibrium price, the market price will be driven
answer
a) up by unhappy buyers
b) up by unhappy sellers
c) down by unhappy buyers
----d) down by unhappy sellers
b) up by unhappy sellers
c) down by unhappy buyers
----d) down by unhappy sellers
question
Equilibrium price is __________________. (LO8)
See Figure 1 (page 470).
See Figure 1 (page 470).
answer
below $8
question
Equilibrium quantity is _________________. (LO8)
See Figure 1 (page 470).
See Figure 1 (page 470).
answer
c) between 13 and 15
question
Use the information in Figure 2 (Page 470).
A move from J to K
A move from J to K
answer
----a) an increase in demand
b) a decrease in demand
c) a change in quantity demanded
b) a decrease in demand
c) a change in quantity demanded
question
Use the information in Figure 2 (Page 470).
A move from K to L
A move from K to L
answer
a) an increase in demand
b) a decrease in demand
c) a change in quantity demanded
b) a decrease in demand
c) a change in quantity demanded
question
Use the information in Figure 2 (Page 470).
A move from D1 to D2
A move from D1 to D2
answer
an increase in demand
---a decrease in demand
a change in quantity demanded
---a decrease in demand
a change in quantity demanded
question
Use the information in Figure 2 (Page 470).
A move from L to J
A move from L to J
answer
a) an increase in demand
----b) a decrease in demand
c) a change in quantity demanded
----b) a decrease in demand
c) a change in quantity demanded
question
Use the information in Figure 3 (page 471).
A move from M to N
A move from M to N
answer
a) an increase in supply
b) a decrease in supply
----c) a change in the quantity supplied
b) a decrease in supply
----c) a change in the quantity supplied
question
Use the information in Figure 3 (page 471).
A move from S1 to S2
A move from S1 to S2
answer
---a) an increase in supply
b) a decrease in supply
c) a change in the quantity supplied
b) a decrease in supply
c) a change in the quantity supplied
question
Use the information in Figure 3 (page 471).
A move from N to O
A move from N to O
answer
a) an increase in supply
----b) a decrease in supply
c) a change in the quantity supplied
----b) a decrease in supply
c) a change in the quantity supplied
question
Use the information in Figure 3 (page 471).
A move from O to P
A move from O to P
answer
a) an increase in supply
b) a decrease in supply
---c) a change in the quantity supplied
b) a decrease in supply
---c) a change in the quantity supplied
question
If the price of cameras falls, there will be a(n)
answer
a) decrease in the demand for film
b) decrease in the quantity of cameras demanded
c) decrease in the supply of cameras
d) increase in the demand for cameras
---e) increase in the quantity of cameras demanded
b) decrease in the quantity of cameras demanded
c) decrease in the supply of cameras
d) increase in the demand for cameras
---e) increase in the quantity of cameras demanded
question
The market demand for a good will decrease
answer
c) as income decreases if the good is a normal good
question
A decrease in demand means that the quantity demanded
answer
a) does not fall at any price
b) falls only at the equilibrium price
c) falls at a few prices
d) falls at most prices
----e) falls at all prices
b) falls only at the equilibrium price
c) falls at a few prices
d) falls at most prices
----e) falls at all prices
question
An increase in the supply of running shoes will--assuming demand is unchanged--lead to ________________. (LO7)
answer
a) an increase in equilibrium price and increase in equilibrium quantity
b) a decrease in equilibrium price and a decrease in equilibrium quantity
c) an increase in equilibrium price and a decrease in equilibrium quantity
---d) a decrease in equilibrium price and an increase in equilibrium quantity
b) a decrease in equilibrium price and a decrease in equilibrium quantity
c) an increase in equilibrium price and a decrease in equilibrium quantity
---d) a decrease in equilibrium price and an increase in equilibrium quantity
question
If demand rises and supply falls, then equilibrium price ______________________. (LO8)
answer
-----a) may rise, fall or remain the same
b) may rise or remain the same
c) may fall or remain the same
d) will rise
----e) will fall
f) will remain the same
b) may rise or remain the same
c) may fall or remain the same
d) will rise
----e) will fall
f) will remain the same
question
If demand falls and supply rises, the equilibrium quantity
answer
a) may rise, fall or remain the same
question
The American Cancer Society announces the results of a study of 10,000 smokers and nonsmokers. A 21-year-old smoker who continues smoking two packs a day has a life-time expectancy that is 20 years shorter than a 21-year-old nonsmoker. As a result of this announcement, the cigarette equilibrium ____________________. (LO3)
answer
a) price will rise and quantity sold will rise
b) price will rise and quantity sold will fall
----c) price will fall and quantity sold will fall
d) price will fall and quantity sold will rise
b) price will rise and quantity sold will fall
----c) price will fall and quantity sold will fall
d) price will fall and quantity sold will rise
question
The reason many homeowners cannot sell their homes when housing prices are falling is because
answer
d) the homeowners are not willing to lower their prices enough
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