Unit 1 Chapter 3

C

"Supply" refers to the: A) maximum price sellers are willing to accept for a given quantity. B) amount of a product suppliers would sell if they had control over the market. C) amount of a product sellers are willing and able to sell at various prices. D) amount of a product sellers would sell if the market clears.

B

(Figure 3.10) If the price of shoes is $60/pair, the _____ will be 30 pairs of shoes. A) quantity demanded B) quantity supplied C) market demand D) market supply

C

(Figure 3.10) The graph represents: A) ceteris paribus. B) the price system. C) the law of supply. D) the law of demand.

A

(Figure 3.4) If the price of shoes is $60/pair, the _____ will be 10 pairs of shoes. A) quantity demanded B) quantity supplied C) market demand D) market supply

D

(Figure 3.4) The graph represents: A) ceteris paribus. B) the price system. C) the law of supply. D) the law of demand.

B

(Figure 3.5) A shift to the right of the demand curve could be caused by: A) a decrease in tastes or preferences. B) an increase in income. C) an increase in the price of a complement. D) a decrease in the price of a substitute.

A

(Figure 3.5) A shift to the right of the demand curve would be caused by anything except: A) a decrease in the population. B) an increase in income given that shoes are a normal good. C) a decrease in the price of a complement. D) an increase in the price of a substitute

C

(Table) In the table, the equilibrium price is _____, and the equilibrium output is _____. A) $12; 70 B) $15; 40 C) $10; 60 D) $12; 60

B

A decrease in demand means that: A) the demand curve has shifted to the right. B) the demand curve has shifted to the left. C) the market price has declined and consumers want to buy more. D) the market price has increased and consumers want to buy less.

A

A decrease in the quantity supplied of iPods is caused by a(n): A) drop in the price of iPods. B) increase in labor costs to produce iPods. C) reduction in the number of iPod producers. D) increase in the taxes on the sale of iPods.

C

A demand curve represents a(n): A) direct relationship between price and quantity demanded. B) indirect relationship between price and supply. C) indirect relationship between price and quantity demanded. D) direct relationship between price and demand.

D

A graphical representation of how much a seller would be willing and able to bring to the market at various prices is known as the: A) maximal quantity curve. B) demand curve. C) price-quantity line. D) supply curve.

B

A market exists when: A) an absolute advantage is achieved by one country. B) people exchange money for goods and services. C) the cost of production is equated to price by a government agency. D) a physical location is created to facilitate the exchange of personal information about consumer choices.

C

A market will: A) always have some excess demand. B) never move towards equilibrium because prices are constantly increasing. C) always trend towards equilibrium. D) always have some excess supply.

B

A technological advance causes: A) the supply curve to shift to the left. B) the supply curve to shift to the right. C) the demand curve to shift to the left. D) the demand curve to shift to the right.

C

A(n) _____ is an institution that brings buyers and sellers together so they can interact and transact with each other. A) firm B) bank C) market D) investment bank

B

According to the figure, the market quantity demanded at $20 is: A) 1. B) 10. C) 4. D) 7.

A

According to the law of supply, as price increases, A) quantity supplied will rise. B) supply will rise. C) quantity supplied will fall. D) supply will fall.

B

An increase in the supply of popcorn indicates that the producers of popcorn are willing to sell _____ at all prices, and the supply curve for popcorn shifts _____________. A) less popcorn; rightward B) more popcorn; rightward C) more popcorn; leftward D) less popcorn; leftward

A

Ben likes carrots less today than he did yesterday. A) Ben is now willing to pay less than before for carrots. B) Ben must have received a decrease in income. C) Ben must now consider carrots a normal good. D) The supply of carrots must have decreased.

C

Determinants of supply include all of the following except: A) production technology. B) costs of resources. C) income. D) expectations.

A

Gasoline is produced from crude oil. All things equal, if the supply of crude oil falls: A) the equilibrium price of gasoline will increase and the equilibrium quantity will decrease. B) the equilibrium price of gasoline will increase and the equilibrium quantity will increase. C) the equilibrium price of gasoline will decrease and the equilibrium quantity will increase. D) the equilibrium price of gasoline will decrease and the equilibrium quantity will decrease.

B

If more auto manufacturers start producing hybrid cars: A) supply decreases; quantity supplied decreases; price increases. B) supply increases; quantity supplied increases; price decreases. C) supply decreases; quantity supplied increases; price decreases. D) supply increases; quantity supplied increases; price increases.

C

If the price of HDTVs falls: A) the supply of HDTVs declines. B) the quantity supplied of HDTVs rises. C) the quantity supplied of HDTVs declines. D) the supply of HDTVs rises.

B

In a market economy, there is a(n) _____ relationship between price and quantity supplied. A) indeterminate B) positive C) negative D) indeterminate, positive, and negative

C

In citing the ceteris paribus condition for the law of demand, the only two variables that change are: A) income and the product's price. B) the product's price and the prices of related goods. C) the product's price and the quantity demanded for the product. D) income and the quantity demanded for the product.

A

Labor costs increase at General Foods cereal plants: A) supply decreases; quantity supplied decreases; price increases. B) supply increases; quantity supplied decreases; price increases. C) supply decreases; quantity supplied decreases; price decreases. D) supply increases; quantity supplied increases; price decreases.

D

Prices perform which of the following functions? A) signal entrepreneurs to enter or leave a market. B) give buyers an easy means of comparing goods that might substitute for each other. C) signal potential employees to enter or leave the labor market as a supplier for a particular job. D) All answer choices are correct.

D

Prices: A) allow sellers to determine what goods to sell. B) help buyers find possible substitute goods. C) contain information useful for all people involved in a transaction. D) allow sellers to determine what goods to sell, help buyers find possible substitute goods, and contain information useful for all people involved in a transaction.

C

The basic proposition of the law of demand is that: A) prices must adhere to all of a nation's laws. B) higher prices elicit more demand. C) as the price of a good rises, less of it is demanded. D) buyers demand lower prices

D

The concept of demand is: A) the total satisfaction that consuming a good provides people at different prices. B) how desperately someone wants a good. C) the quantities of a good or a service that people will provide at various prices. D) the quantities of a good or a service that people will buy at various prices.

C

The shift of the supply curve from A to B is an example of: A) a price-induced shift. B) a change in quantity supplied. C) a change in supply. D) a demand-induced shift.

C

The state of Florida was experiencing a period of drought. The farmers were anticipating an increase in the cost of growing oranges. This would have caused a decrease in the: A) quantity supplied of oranges. B) quantity demanded of oranges. C) supply of oranges. D) demand of oranges.

A

The table shows the demand of three individuals in a market. Assuming these are the only buyers, what is total market demand if price is $20? A) 5 units B) 1 unit C) 20 units D) The answer cannot be determined from the information given.

C

There are more baby boomers in the population than there are people already retired. Once the baby boomers start to retire, what happens to the market for retirement homes? A) demand decreases; quantity demanded decreases; price decreases B) demand increases; quantity demanded increases; price decreases C) demand increases; quantity demanded increases; price increases D) demand decreases; quantity demanded decreases; price increases

C

When one of the determinants of demand changes, that will result in: A) a change in quantity demanded. B) a change in quantity supplied. C) a shift of the demand curve. D) a shift of the supply curve

B

Which is the most likely effect of an increase in the price of computer software upon the market for laptop computers? Software and laptop computers are complements. A) increased equilibrium price and decreased equilibrium quantity B) decreased equilibrium price and decreased equilibrium quantity C) increased equilibrium price and increased equilibrium quantity D) decreased equilibrium price and increased equilibrium quantity

C

Which of the following graphs concerning hamburgers indicates an increase in the quantity demanded of hamburgers? A) B) C) D)

D

Which of the following would not be a market transaction? A) payment for purchase of shares at a stock exchange B) payment for a used book purchased on eBay C) payment for a soft drink at a vending machine D) payment made to a disaster victim