ECON 101 C3

Which of the following generation categories has the smallest population in the United States in 2017? A) the baby boomers B) generation Y C) Generation X D) the millennials

A) The Baby Boomers

Refer to Figure 3-5. At a price of $15, the quantity sold A) is 2 units. B) is 4 units. C) is 6 units. D) cannot be determined.

A) is 2 units.

A change in which variable will change the market demand for a product? A) the quantity of the product supplied B) the number of firms in the market C) the price of the product D) Expected future prices

D) Expected future prices

The table above shows the demand schedules for cashews of two individuals (Jordy and Amy) and the rest of the market. At a price of $6, the quantity demanded in the market would be 19) ______ A) 87 lbs. B) 95 lbs. C) 103 lbs D) 215 lbs.

C) 103 lbs (3+5+95) line for $6

The market for smart water is becoming more competitive. The increase in competition in this market is an example of how the market responds to _ A) decreases in the price of carbonated soda (a substitute for the product). B) decreases in income. C) changes in expected future prices. D) Changes in consumer tastes.

D) Changes in consumer tastes.

) As the number of firms in a market increases, the supply curve will shift to the left and the equilibrium price will rise.

False

A decrease in the number of firms in a market will cause supply to increase

False

An inferior good is a good for which the quantity demanded increases as the price decreases, holding everything else constant

False

If consumers believe the price of tablet computers will increase in the future, this will cause the demand for tablet computers to decrease now

False

The income effect explains why there is usually a direct relationship between the price of product and the quantity of the product demanded.

False

) Market equilibrium occurs where the quantity supplied is equal to the quantity demanded.

True

A change in quantity supplied is represented by a movement along the supply curve

True

A normal good is a good for which the demanded decreases as income decreases, holding everything else constant.

True

A surplus is defined as the situation that exists when the quantity of a good supplied is greater than the quantity demanded

True

All else equal, as the price of a product falls, the quantity supplied decreases.

True

If the demand for a product increases and the supply of the same product decreases, the equilibrium price will increase

True

If the population increases and input prices increase, the equilibrium price of a product will definitely increase.

True

What would happen in the market for knee replacement surgery if insurance companies started to cover a smaller portion of the cost of the surgery? _ A) Demand will decrease, but this will not shift the supply curve. B) Demand and supply will both decrease. C) Supply will decrease, but this will not shift the demand curve. D) Demand will decrease and supply will increase.

A) Demand will decrease, but this will not shift the supply curve.

The ________ effect of a price change refers to the impact of a change in the price of a good on a consumer's purchasing power A) Income B) ceteris paribus C) substitution D) demographics

A) Income

Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D1 and S1 (point A). If there is a surplus of motorcycles how will the equilibrium point change? A) The equilibrium point will move from A to B. B) The equilibrium point will move from A to E. C) The equilibrium point will move from A to C. D) There will be no change in the equilibrium point.

A) The equilibrium point will move from A to B.

Refer to Figure 3-1. An increase in the price of the product would be represented by a movement from A) A to B. B) B to A. C) D1 to D2. D) D2 to D1.

B) B to A.

At market equilibrium, A) surpluses are greater than shortages. B) demand equals supply. C) quantity demanded equals quantity supplied. D) shortages are greater than surpluses.

B) Demand Equals Supply.

Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for tuna. Which panel best describes what happens in this market when there is a decrease in the productivity of commercial fishermen? A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)

B) Panel (b)

When the price of a good rises, consumers buy a smaller quantity because of the ________ effect and the ________ effect. A) normal; inferior B) Substitution; Income C) substitute; complement D) supply; demand

B) Substitution; Income

In January, buyers of gold expect that the price of gold will fall in February. What happens in the gold market in January, holding everything else constant? A) The quantity demanded increases. B) The demand curve shifts to the left. C) The quantity demanded decreases. D) The demand curve shifts to the right.

B) The demand curve shifts to the left.

Refer to Table 3-1. The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi) and the rest of the market. At a price of $6, the quantity demanded in the market would be ($6) 14+7+68= A) 36 lbs. B) 68 lbs. C) 89 lbs. D) 123 lbs.

C) 89 lbs. ($6): ( 14+7+68=)

If, in response to a decrease in the price of coffee, the quantity of coffee demanded increases, then economists would describe this as A) an increase in demand. B) a change in consumer income. C) An increase in quantity demanded. D) an increase in consumers' taste for coffee.

C) An increase in quantity demanded.

If the demand curve for a product shifts to the right and the supply curve for the product shifts to the left, equilibrium price and equilibrium quantity will both increase.

False

If the price of peaches, a substitute for plums, increases the demand for plums will decrease.

False

The substitution effect explains why there is an inverse relationship between the price of a product and the quantity of the product demanded.

True

Which of the following would cause the equilibrium price of apple juice to decrease and the equilibrium quantity of apple juice to increase? A) a decrease in the price of apples B) a decrease in the price of granola bars, a complement for apple juice C) an increase in the price of orange juice, a substitute for apple juice D) an increase in the price of apples

A) a decrease in the price of apples

A demand curve shows the relationship between A) the price of a produce and the demand for the product. B) The price of a product and the quantity of the product demanded. C) the quantity that consumers are willing and able to buy and the quantity that sellers are willing and able to offer. D) the amount of a product sellers are willing to sell at a particular price and the amount consumers are willing to buy at that price.

B) The price of a product and the quantity of the product demanded.

If in the market for apples the supply has decreased, then A) there has been a movement downwards along the supply curve for apples. B) The supply curve for apples has shifted to the left. C) the supply curve for apples has shifted to the right. D) there has been a movement upwards along the supply curve for apples.

B) The supply curve for apples has shifted to the left.

Electric car manufacturers want to sell more electric cars at a higher price. Which of the following events would have this effect? A) an increase in the number of manufacturers of electric cars. B) technological advancement in the production of electric car batteries. C) An increase in the price of gasoline. D) a decrease in the price of lithium, which is used in the electric car batteries.

C) An increase in the price of gasoline.

37) Farmers can raise either goats or ostriches on their land. Which of the following would cause the supply of goats to decrease? A) a decrease in the price of goats B) an increase in the price of ostrich feed C) An increase in the price of ostriches D) an increase in the demand for goats

C) An increase in the price of ostriches

Which of the following would cause a decrease in the supply of peanut butter? A) an increase in the technology used to produce peanut butter B) a decrease in the price of jelly (assuming that peanut butter and jelly are complements) C) An increase the price of peanuts D) a decrease in the price of peanut butter

C) An increase the price of peanuts

If an increase in income leads to a decrease in the demand for salami, then salami is A) a neutral good. B) a normal good. C) An inferior good. D) a necessity.

C) An inferior good.

Let D = demand, S = supply, P = equilibrium price, Q = equilibrium quantity. What happens in the market for sushi if the Surgeon General announces that a majority of the raw fish that is imported to make sushi contains high levels of toxic mercury? A) S decreases, D no change, P increases, Q decreases. B) D no change, S increases, P decreases, Q decreases. C) D Decreases, S No Change, P and Q Decrease. D) D and S decrease, P and Q decrease.

C) D Decreases, S No Change, P and Q Decrease

Suppose that when the price of hamburgers increases, the Ruiz family increases their purchases of hot dogs. To the Ruiz family A) hamburgers and hot dogs are substitutes. B) hamburgers and hot dogs are normal goods. C) Hamburgers and hot dogs are complements. D) hamburgers and hot dogs are inferior goods.

C) Hamburgers and hot dogs are complements.

Refer to Figure 3-2. A technological advancement would be represented by a movement from A) A to B. B) B to A. C) S1 to S2. D) S2 to S1.

C) S1 to S2.

The substitution effect of a price change refers to

C) The change in quantity demanded that results from a change in price making a good more or less expensive relative to other goods that are substitutes.

Technological advancements have led to lower prices and an increase in the sale of color laser printers. How does this affect the market for traditional inkjet printers? A) The quantity of inkjet printers demanded increases. B) The quantity of inkjet printers demanded decreases. C) The demand curve for inkjet printers shifts to the left. D) The demand curve for inkjet printers shifts to the right

C) The demand curve for inkjet printers shifts to the left.

If the price of propane-fueled gas grills was to decrease, then A) the demand for propane would decrease. B) the quantity of propane demanded would decrease. C) The demand for propane would increase. D) the quantity of propane demanded would increase.

C) The demand for propane would increase.

One would speak of a movement along a supply curve for a good, rather than a change in supply, if A) supplier expectations about future prices change. B) the cost of producing the good changes. C) The price of the good changes. D) prices of substitutes in production change.

C) The price of the good changes.

Which of the following describes a characteristic of a perfectly competitive market? A) There are many sellers but few buyers. B) Equilibrium is achieved when demand for the product sold in the market equals the supply. C) There are many buyers and sellers. D) There are many buyers but few sellers.

C) There are many buyers and sellers

Refer to Figure 3-5. At a price of $5 A) there is a surplus of 4 units. B) there is a scarcity of 4 units. C) There is a shortage of 4 units. D) there is a shortage of 6 units.

C) There is a shortage of 4 units.

Which of the following would cause an increase in the equilibrium price and decrease in the equilibrium quantity of watermelon? A) an increase in demand and an increase in supply B) an increase in demand and an increase in supply greater than the increase in demand C) a decrease in supply D) a decrease in demand and an increase in supply

C) a decrease in supply

An increase in the demand for peanuts due to changes in consumer tastes, accompanied by an increase in the supply of peanuts as a result of favorable growing conditions, will result in A) an increase in the equilibrium quantity of peanuts and no change in the equilibrium price. B) an increase in the equilibrium price of peanuts; the equilibrium quantity may increase or decrease. C) an increase in the equilibrium quantity of peanuts; the equilibrium price may increase or decrease. D) an increase in the equilibrium price of peanuts and no change in the equilibrium quantity.

C) an increase in the equilibrium quantity of peanuts; the equilibrium price may increase or decrease.

Which of the following would shift the supply curve for energy drinks to the left? A) a decrease in the price of an input used to produce energy drinks B) a decrease in the expected future price of energy drinks C) an increase in consumer income (assuming that energy drinks are normal goods) D) A decrease in the number of firms that produce energy drinks

D) A decrease in the number of firms that produce energy drinks

Refer to Figure 3-1. An increase in the price of a complement would be represented by a movement from A) A to B. B) B to A. C) D1 to D2. D) D2 to D1.

D) D2 to D1.

A(n) ________ is represented by a rightward shift of the demand curve while a(n) ________ is represented by a movement along a given demand curve. A) increase in demand; decrease in demand B) increase in quantity demanded; increase in demand C) decrease in demand; decrease in quantity demanded D) Increase in demand; increase in quantity demanded

D) Increase in demand; increase in quantity demanded

The law of demand implies, holding everything else constant, that as the price of yogurt. A) decreases, the demand for yogurt will increase. B) increases, the demand for yogurt will increase. C) decreases, the quantity of yogurt demanded will decrease. D) Increases, the quantity of yogurt demanded will decrease.

D) Increases, the quantity of yogurt demanded will decrease.

A supply curve A) is the relationship between the supply of a good and the cost of producing the good. B) is a curve that shows the relationship between the price of a product and the quantity of the product that producers and consumers are willing to exchange. C) is a table that shows the relationship between the price of a product and the quantity of the product supplied. D) Is a curve that shows the relationship between the price of a product and the quantity of the product supplied

D) Is a curve that shows the relationship between the price of a product and the quantity of the product supplied

Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for blu-ray discs. Which panel best describes what happens in this market if there is a substantial increase in the price of blu-ray players?

D) Panel (d)

Refer to Figure 3-2. An increase in the expected future price of the product would be represented by a movement from 31) ______ A) A to B. B) B to A. C) S1 to S2. D) S2 to S1.

D) S2 to S1.

Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D1 and S1 (point A). If the price of motorcycle engines increases, and the wages of motorcycle workers increase, how will the equilibrium point change? A) The equilibrium point will move from A to C. B) The equilibrium point will move from A to E. C) The equilibrium will first move from A to B, then return to A. D) The equilibrium point will move from A to B.

D) The equilibrium point will move from A to B.

George Gnat subscribes to a monthly pest control service for his home. Last week, the owner of the service informed George that he will have to raise his monthly service fee because of increases in the price of gasoline used by his workers on their service trips. How is the market for pest control services affected by this? A) There is a decrease in the demand for pest control services. B) There is an increase in the supply of pest control services. C) There is a decrease in the quantity of pest control services supplied. D) There is a decrease in the supply of pest control services.

D) There is a decrease in the supply of pest control services.

If an increase in income leads to an increase in the demand for sushi, then sushi is A) a neutral good. B) a Necessity. C) a complement. D) a Normal good.

D) a Normal good.

Which of the following would cause a decrease in the equilibrium price and decrease in the equilibrium quantity of papayas? A) an increase in supply and an increase in demand greater than the increase in supply B) a decrease in supply and a decrease in demand C) a decrease in supply and an increase in demand D) a decrease in demand

D) a decrease in demand

If a firm expects that the price of its product will be lower in the future than it is today A) the firm has an incentive to decrease supply now and increase supply in the future. B) The firm has an incentive to increase quantity supplied now and decrease quantity supplied in the future. C) the firm will not change supply until it knows for certain what will happen to its price. D) the firm has an incentive to increase supply now and decrease supply in the future.

D) the firm has an incentive to increase supply now and decrease supply in the future.

) Farmers can plant either corn or soybeans in their fields. Which of the following would cause the supply of soybeans to increase? ) Farmers can plant either corn or soybeans in their fields. Which of the following would cause the supply of soybeans to increase? 33) ______ A) A decrease in the price of corn B) an increase in the price of soybeans C) an increase in the demand for corn D) an increase in the price of soybean seeds B) an increase in the price of soybeans C) an increase in the demand for corn D) an increase in the price of soybean seeds

___ A) A decrease in the price of corn