Chapter 3
a
Q: A decrease in the price of a good will result in: a. an increase in the quantity demanded. b. an increase in supply. c. an increase in demand. d. more being supplied.
D
Q: If the demand for tires goes down when the price of gas goes up, then tires and gas are: a. both expensive. b. both inexpensive. c. substitutes. d. complements.
C
A decrease in demand and a decrease in supply will lead to _____ in equilibrium quantity and _____ in equilibrium price. a. an increase; an indeterminate change b. an indeterminate change; an increase c. a decrease; an indeterminate change d. an indeterminate change; a decrease
B
Q: A leftward shift of a supply curve is caused by: a. a technological improvement in production. b. an increase in the cost of an input. c. an increase in the number of buyers. d. an increase in the number of sellers.
D
Q: An increase in supply with no change in demand will lead to _____ in equilibrium quantity and _____ in equilibrium price. a. an increase; an increase b. a decrease; an increase c. a decrease; a decrease d. an increase; a decrease
B
Q: An increase in the price of sugar (an ingredient for soft drinks) and an increased concern about tooth decay caused by the consumption of soft drinks will result in which of the following in the soft drink market? a. There will be a decrease in both equilibrium price and quantity. b. Equilibrium quantity will decrease, but equilibrium price may decrease, increase, or stay the same. c. There will be an increase in both the equilibrium price and quantity. d. Equilibrium quantity will increase, but equilibrium price may decrease, increase, or stay the same.
A
Q: Assuming that desktop computers are normal goods, which of the following will NOT increase demand for desktop computers? A. a very large computer company going out of business b. the price of notebook computers increasing c. cool new computer games that can only be played on desktop computers d. an increase in the incomes of computer users
B
Q: Consider two competing motorcycle manufacturers, Harley-Davidson and Honda. If Harley-Davidson raises the price of its motorcycles, we can expect: a. a shift to the left in the supply curve of Hondas and higher prices for Hondas. b. a shift to the right in the demand curve for Hondas and higher prices for Hondas. c. a shift to the left in the demand curve for Hondas and lower prices for Hondas. d. a shift to the right in the supply curve of Hondas and lower prices for Hondas.
D
Q: For consumers, pizza and hamburgers are substitutes. A rise in the price of a pizza causes _____ in the equilibrium price of a hamburger and _____ in the equilibrium quantity of hamburgers. a. a rise; a decrease b. a fall; an increase c. a fall; a decrease d. a rise; an increase
D
Q: If goods A and B are substitutes, a decrease in the price of good B will: a. increase the demand for good B. b. increase the demand for good B and decrease the demand for good A. c. increase the demand for good A. d. decrease the demand for good A.
D
Q: If the price of a commodity increases, you can expect the: a. quantity supplied to decrease. b. supply curve to shift to the right. c. supply to increase. d. quantity supplied to increase.
B
Q: If the supply and demand curves intersect at $47, then any price above that would result in: a. a shortage. b. a surplus. c. an increase in demand. d. equilibrium.
D
Q: Look at the figure Demand and Supply of Gasoline. Given the initial equilibrium of S1 and D, any price lower than _____ will exert pressure for the price to _____. a. $3.00; rise b. $2.00; fall c. $2.50; fall d. $2.50; rise
C
Q: Look at the figure Four Markets for DVDs. Which of the graphs shows what may happen if D1 or S1 is the original curve and D2 or S2 is the new curve and if some of the stores that rent DVDs close? a .A b. D c. B d. C
A
Q: Look at the figure Shifts in Demand and Supply II. The figure shows how supply and demand might shift in response to specific events. Suppose the birthrate decreases. Which panel BEST describes how this will affect the market for diapers? a. panel B b. panel D c. panel A d. panel C
D
Q: Look at the figure Supply of Coconuts. If the prices of inputs (e.g., labor, fertilizer, and fuel) used to produce and transport coconuts decreased, it would be represented in the figure as a movement from: a. B to A. b. C to A. c. A to B. d. E to B.
C
Q: Look at the figure The Market for Candy. A surplus of the good will exist at a price of: a. P2. b. P3. c. P1. d. There are no surpluses in this market.
B
Q: Look at the table Supply of Lemonade. If the price of lemonade is $1 per cup, the total quantity of lemonade supplied will be: a. 80 cups. b. 90 cups. c. 25 cups. d. 50 cups.