Chapter 3

When a large factory closed in the town of Greenville, income fell for many residents. As a result, demand for normal goods would_____ and demand for inferior goods would______. A. decrease; increase B. increase;increase C. decrease; decrease D. increase; decrease

A. decrease; increase

The supply curve represents the ______ price at which a firm is willing to ______. A. minimum; sell various quantities of a good B. maximum; sell various quantities of a good C. minimum; pay for inputs D. Maximum; pay for inputs

A. minimum; sell various quantities of a good

Which factor would NOT cause the demand curve for green tea to shift to the right? A. a decrease in the price of lemons, a complement to green tea B. a decrease in the price of green tea C. new research showing that drinking green tea reduces the risk of illnesses D. All of these will shift the demand for green tea to right

B. a decrease in the price of green tea

Which statement is a CORRECT description of the law of demand? A. as prices of a good rise, the quantity supplied of that good rises B. as prices of a good fall, the quantity demanded of that good rises C. As prices rise, the demand curve shifts to the left D. There is a positive relationship between the price of a good and the quantity demanded

B. as prices of a good fall, the quantity demanded of that good rises

One of the most important ingredients in bubble tea is the tapioca pearls that are added to the tea. If the price of tapioca flour increases, what will happen to the supply of bubble tea, all else being equal? A. The supply of bubble tea will increase dramatically B. The supply of bubble tea will increase modestly C. The supply of bubble tea will decrease D. The supply of bubble tea will not change

C. The supply of bubble tea will decrease

Which item is NOT an example of a market? A. eBay B. a neighborhood yard sale C. the Internal Revenue Service D. New York Stock Exchange

C. the Internal Revenue Service

In the graph, an increase in quantity demanded would be represented by a change from pointed "a" to point _____, while a decrease in demand would be represented by a change from point "d" to point____ A b;b B b;c C c;b D c;c

D c;c

Suppose there are three massage therapists, with a supply schedule that indicates their willingness to supply massages at various prices. What is the market quantity of massages supplied at $60, and does this supply schedule follow the law of supply? A. 47;no B. 29;no C. 47;no D. 29;yes

D. 29;yes

In the market for Chinese take-out, suppose that the price of Sushi take-out, a substitute, decreases in price. What will happen to the demand for Chinese take-out? A. Demand for Chinese take-out will be eliminated B. Demand for Chinese take-out will be eliminated C. Demand for Chinese take-out will increase D. Demand for Chinese take-out will decrease

D. Demand for Chinese take-out will decrease

Which factor would shift the supply of skateboard to the right? A. a new rule banning all skateboard on college campuses B. an increase in incomes among skateboard enthusiasts C. a decrease in the price of skateboards D. a large reduction in the price of wheels used to produce skateboard

D. a large reduction in the price of wheels used to produce skateboard

Another way of referring to a market economy is as a: A. demand economy B. command economy C. ceteris paribus D. price system

D. price system