Micro Exam 1 MC
A normal good is a good for which the demanded increases as income decreases, holding everything else constant.
False
Chips and salsa are complements. If the price of salsa decreases, the demand for chips will increase.
True
In response to a surplus the market price of a good will fall; as the price falls, the quantity demanded will increase and quantity supplies will decrease until equilibrium is reached.
True
The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in purchasing power as a result of the price change
True
The market for smart phones has grown rapidly over the past few years, due in part to the overwhelming success of the Apple iPhone. Following the successful launch of the iPhone in 2007, companies such as Samsung, HTC, and LG have all introduced products to compete with the iPhone. The smart phones introduced to compete with the iPhone would be considered A) complements to the iPhone. B) substitutes for the iPhone. C) inferior goods compared to the iPhone. D) normal goods compared to the iPhone.
b
A movement along the demand curve for toothpaste would be caused by A) a change in the price of toothbrushes. B) a change in consumer income. C) a change in the price of toothpaste. D) a change in population.
c
By drawing a demand curve with ________ on the vertical axis and ________ on the horizontal axis, economists assume that the most important determinant of the demand for a good is the ________ of the good. A) quantity; price; quantity B) price; quantity; quantity C) price; quantity; price D) quantity; price; price
c
Select the phrase that correctly completes the following statement. "A positive change in technology caused an increase in the supply of flat-screen televisions. As a result ________." A) the price of flat-screen televisions decreased and the demand for flat-screen televisions increased B) the equilibrium quantity of flat-screen televisions decreased C) the price of flat-screen televisions decreased and the quantity demanded of flat-screen televisions increased D) the price of flat-screen televisions decreased. The lower price caused the supply of flat-screen televisions to decrease
c
Select the phrase that correctly completes the following statement. "An increase in input prices caused a decrease in the supply of baseballs. As a result ________." A) the price of baseballs increased and the demand for baseballs decreased B) the equilibrium quantity of baseballs increased C) the price of baseballs increased and the quantity demanded of baseballs decreased D) the price of baseballs increased. The higher price caused the supply of baseballs to increase
c
) Olive oil producers want to sell more olive oil at a higher price. Which of the following events would have this effect? A) an increase in the price of olive oil presses B) a decrease in the cost of transporting olive oil to markets C) an increase in the price of land used to plant olives D) research finds that consumption of olive oil reduces the risk of heart disease
d
Refer 3-1 A decrease in taste or preference would be represented by a movement from A) A to B. B) B to A. C) D1 to D2. D) D2 to D1.
d
Suppose that when the price of hamburgers decreases, the Landry family decreases their purchases of chicken nuggets. To the Landry family A) hamburgers and chicken nuggets are complements. B) hamburgers and chicken nuggets are inferior goods. C) hamburgers and chicken nuggets are normal goods. D) hamburgers and chicken nuggets are substitutes.
d
) Harvey Rabbitt pays for monthly cable TV service. Last week the cable company informed Harvey that his monthly cable price would go down because the city council has granted approval for three new cable companies to service his area. How is the market for cable TV services affected by this? A) There is an increase in the supply of cable TV service. B) There is a decrease in the demand for cable TV service. C) There is a decrease in the quantity of cable TV service supplied. D) There is a decrease in the supply of cable TV service.
a
A change in all of the following variables will change the market demand for a product except A) the price of the product. B) population and demographics. C) income. D) tastes.
a
Technological advancements have led to lower prices and an increase in the sale of digital cameras. How does this affect the digital photo printing paper market? A) The demand curve for digital photo printing paper shifts to the right. B) The demand curve for digital photo printing paper shifts to the left. C) The supply curve for digital photo printing paper shifts to the right. D) The supply curve for digital photo printing paper shifts to the left.
a
The demand by all the consumers of a given good or service is the ________ for the good or service. A) market demand B) quantity demanded C) law of demand D) scheduled demand
a
The law of demand implies, holding everything else constant, that A) as the price of bagels increases, the quantity of bagels demanded will decrease. B) as the price of bagels increases, the demand for bagels will decrease. C) as the price of bagels increases, the quantity of bagels demanded will increase. D) as the price of bagels increases, the demand for bagels will increase.
a
The phrase "demand has decreased" means that A) a demand curve has shifted to the left. B) there has been an upward movement along a demand curve. C) there has been a downward movement along a demand curve. D) a demand curve has shifted to the right.
a
Tomas increased his consumption of potato chips when the price of pistachios increased. For Tomas, potato chips and pistachios are A) substitutes in consumption. B) both inferior goods. C) complements in consumption. D) both luxury goods.
a
What would happen in the market for laser eye surgery if insurance companies started to cover a portion of the price of voluntary procedures? A) Demand will increase, but this will not shift the supply curve. B) Supply will increase, but this will not shift the demand curve. C) Demand and supply will both increase. D) Demand will increase and supply will decrease.
a
When the price of a good falls, consumers buy a larger quantity because of the ________ effect and the ________ effect. A) substitution; income B) normal; inferior C) substitute; complement; D) supply; demand
a
"Because apples and oranges are substitutes, an increase in the price of oranges will cause the demand for apples to increase. This initial shift in demand for apples results in a higher price for apples; this higher price will cause the demand curve for apples to shift to the right." Which of the following correctly comments on this statement? A) The statement will be true if consumer tastes for apples and oranges do not change. B) The statement is false because a change in the price of apples would not change the demand for apples. C) The statement is false because oranges are inferior goods; apples are normal goods. D) The statement is false because one cannot assume that apples and oranges are substitutes for all consumers.
b
Let D = demand, S = supply, P = equilibrium price, Q = equilibrium quantity. What happens in the market for electric vehicles if the government offers incentives to manufacturers to produce more electric vehicles? A) D increases, S no change, P and Q increase B) S increases, D no change, P decreases, Q increases C) D and S increase, P and Q decrease D) D no change, S increases, P decreases, Q decreases
b
Let D= demand, S = supply, P = equilibrium price, Q= equilibrium quantity. What happens in the market for tropical hardwood trees if the governments restrict the amount of forest lands that can be logged? A) D decreases, S no change, P and Q decrease B) S decreases, D no change, P increases, Q decreases C) D and S decrease, P and Q increase D) D no change, S decreases, P increases, Q increases
b
One would speak of a change in the quantity of a good supplied, rather than a change in supply, if A) supplier expectations about future prices change. B) the price of the good changes. C) the cost of producing the good changes. D) prices of substitutes in production change.
b
Studies have shown links between calcium consumption and a reduction in osteoporosis. How does this affect the market for calcium? A) The calcium supply curve shifts to the right because of a change in tastes in favor of calcium. B) The calcium demand curve shifts to the right because of a change in tastes in favor of calcium. C) The calcium demand curve shifts to the left because this new information will increase the price of calcium. D) The calcium supply curve shifts to the left because this new information will increase the price of calcium.
b
The Internet has created a new category in the book selling market, namely, the "barely used" book. How does the availability of barely used books affect the market for new books? A) The demand curve for new books shifts to the right. B) The demand curve for new books shifts to the left. C) The supply curve for new books shifts to the right. D) The supply curve for new books shifts to the left.
b
What is the difference between an "increase in demand" and an "increase in quantity demanded"? A) There is no difference between the two terms; they both refer to a shift of the demand curve. B) An "increase in demand" is represented by a rightward shift of the demand curve while an "increase in quantity demanded" is represented by a movement along a given demand curve. C) There is no difference between the two terms; they both refer to a movement downward along a given demand curve. D) An "increase in demand" is represented by a movement along a given demand curve, while an "increase in quantity demanded" is represented by a rightward shift of the demand curve.
b
A decrease in the demand for soft drinks due to changes in consumer tastes, accompanied by an increase in the supply of soft drinks as a result of reductions in input prices, will result in A) a decrease in the equilibrium quantity of soft drinks and no change in the equilibrium price. B) a decrease in the equilibrium price of soft drinks and no change in the equilibrium quantity. C) a decrease in the equilibrium price of soft drinks; the equilibrium quantity may increase or decrease. D) an increase in the equilibrium quantity of soft drinks; the equilibrium price may increase or decrease.
c
A decrease in the equilibrium price for a product will result A) when the quantity demanded for the product exceeds the quantity supplied. B) when there is a decrease in supply and a decrease in demand for the product. C) when there is an increase in supply and a decrease in demand for the product. D) when there is a decrease in demand and a decrease in the number of firms producing the product.
c
An article in the Wall Street Journal in early 2001 noted two developments in the market for laser eye surgery. The first development concerned side effects from the surgery, including blurred vision. The second development was that the companies renting eye-surgery machinery to doctors had reduced their charges. In the market for laser eye surgeries, these two developments A) decreased demand and decreased supply, resulting in a decrease in the equilibrium quantity and an increase in the equilibrium price of laser eye surgeries. B) decreased demand and increased supply resulting in an increase in both the equilibrium quantity and the equilibrium price of laser eye surgeries. C) decreased demand and increased supply, resulting in a decrease in the equilibrium price and an uncertain effect on the equilibrium quantity of laser eye surgeries. D) decreased demand and increased supply, resulting in a decrease in both the equilibrium price and the equilibrium quantity of laser eye surgeries.
c
An increase in the demand for lobster due to changes in consumer tastes, accompanied by a decrease in the supply of lobster as a result bad weather reducing the number of fishermen trapping lobster, will result in A) a decrease in the equilibrium quantity of lobster and no change in the equilibrium price. B) an increase in the equilibrium price of lobster and no change in the equilibrium quantity. C) an increase in the equilibrium price of lobster; the equilibrium quantity may increase or decrease. D) a decrease in the equilibrium quantity of lobster; the equilibrium price may increase or decrease.
c
Elvira decreased her consumption of bananas when the price of peanut butter increased. For Elvira, peanut butter and bananas are A) substitutes in consumption. B) both inferior goods. C) complements in consumption. D) both luxury goods.
c
The cost of producing cigarettes in the U.S. has increased and at the same time, more and more Americans are choosing to not smoke cigarettes. Which of the following best explains the effect of these events in the cigarette market? A) The supply curve has shifted to the right and the demand curve has shifted to the left. As a result there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price. B) Both the supply and demand curves have shifted to the right. As a result, there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price. C) Both the supply and demand curves have shifted to the left. As a result, there has been a decrease in the equilibrium quantity and an uncertain effect on the equilibrium price. D) The supply curve has shifted to the right and the demand curve has shifted to the left. As a result, there has been an increase in the equilibrium price and an uncertain effect on the equilibrium quantity.
c
All else equal, the decrease in consumer preference predicted by Apple for its iPhone 5 would be represented by a A) shift the supply curve for iPhones to the right. B) shift the supply curve for iPhones to the left. C) shift the demand curve for iPhones to the right. D) shift the demand curve for iPhones to the left.
d
Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for sugar at the intersection of D1 and S1 (point A). If there is an increase in the price of fertilizer used on sugar cane and there is a decrease in tastes for sugar-sweetened soft drinks, 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 C. C) There will be no change in the equilibrium point. D) The equilibrium point will move from A to E.
d
Suppose that when the price of raspberries increases, Lonnie increases his purchases of papayas. To Lonnie, A) raspberries and papayas are complements. B) raspberries and papayas are inferior goods. C) raspberries and papayas are normal goods. D) raspberries and papayas are substitutes.
d
The ________ effect refers to the change in quantity demanded for a good that results from the effect of a change in the good's price on consumer's purchasing power. A) ceteris paribus B) population C) substitution D) income
d
The income effect of a price change refers to the impact of a change in A) income on the price of a good. B) demand when income changes. C) the quantity demanded when income changes. D) the price of a good on a consumer's purchasing power.
d
Ranchers can raise either cattle or sheep on their land. Which of the following would cause the supply of sheep to increase? A) an increase in the price of sheep B) a decrease in the price of cattle C) an increase in the demand for cattle D) an increase in the price of sheep feed
b
A decrease in the price of GPS systems will result in A) a smaller quantity of GPS systems supplied. B) a larger quantity of GPS systems supplied. C) a decrease in the demand for GPS systems. D) an increase in the supply of GPS systems.
a
A supply schedule A) is a table that shows the relationship between the price of a product and the quantity of the product supplied. B) is a curve that shows the relationship between the price of a product and the quantity of the product supplied. C) is the relationship between the supply of a good and the cost of producing the good. D) is a table that shows the relationship between the price of a product and the quantity of the product that producers and consumers are willing to exchange.
a
Assume that both the demand curve and the supply curve for MP3 players shift to the right but the demand curve shifts more than the supply curve. As a result A) both the equilibrium price and quantity of MP3 players will increase. B) the equilibrium price of MP3 players will increase; the equilibrium quantity may increase or decrease. C) the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will increase. D) the equilibrium price of MP3 players will decrease; the equilibrium quantity may increase or decrease.
a
Blu-ray players were introduced to the market in 2006, and new technology has allowed for the cost of manufacturing the players to decline significantly since the initial introduction. How did this change in technology affect the market for Blu-ray players? A) The new technology caused an increase in the supply of Blu-ray players and a decrease in price of Blu-ray players. B) The new technology caused an increase in the supply of Blu-ray players and an increase in price of Blu-ray players. C) The new technology caused an decrease in the demand for Blu-ray players. D) The new technology caused an increase in the quantity of Blu-ray players supplied
a
If a decrease in income leads to an increase in the demand for sardines, then sardines are A) an inferior good. B) a neutral good. C) a necessity. D) a normal good.
a
If a decrease in income leads to in a decrease in the demand for mac and cheese, then mac and cheese is A) a normal good. B) a neutral good. C) a complement. D) a necessity.
a
If a demand curve shifts to the right, then A) demand has increased. B) quantity demanded has increased. C) demand has decreased. D) quantity demanded has decreased.
a
If a firm has an incentive to increase supply now and decrease supply in the future, the firm expects that the A) price of its product will be lower in the future than it is today. B) price of its product will be higher in the future than it is today. C) price of inputs will be lower in the future than they are today. D) demand for the product will be lower in the future than it is today.
a
If an increase in income leads to a decrease in the demand for popcorn, then popcorn is A) an inferior good. B) a neutral good. C) a necessity. D) a normal good.
a
If the United States placed an embargo on Swedish products, what would happen in the U.S. market for Swedish furniture? A) The supply curve would shift to the left. B) The supply curve would shift to the right. C) The demand curve would shift to the right. D) The demand curve would shift to the left.
a
If the price of automobiles was to increase, then A) the demand for gasoline would decrease. B) the demand for gasoline would increase. C) the supply of gasoline would increase. D) the quantity demanded of gasoline would decrease.
a
If, in the market for oranges, the supply has increased then A) the supply curve for oranges has shifted to the right. B) the supply curve for oranges has shifted to the left. C) there has been a movement upwards along the supply curve for oranges. D) there has been a movement downwards along the supply curve for oranges.
a
In October 2005, the U.S. Fish and Wildlife Service banned the importation of beluga caviar, the most prized of caviars, from the Caspian Sea. What happened in the market for caviar in the U.S.? A) The supply curve shifted to the left. B) The supply curve shifted to the right. C) The demand curve shifted to the right. D) The demand curve shifted to the left.
a
In October, market analysts predict that the price of platinum will fall in November. What happens in the platinum market in October, holding everything else constant? A) The supply curve shifts to the right. B) The supply curve shifts to the left. C) The quantity demanded and the quantity supplied of platinum increase. D) The demand curve shifts to the right.
a
In the United States, consumption per-person of carbonated soft drinks ________ between 2005 and 2013. A) declined by more than 15 percent B) increased by approximately 22 percent C) fell by almost 80 percent D) remained virtually unchanged
a
Last year, the Pottery Palace supplied 8,000 ceramic pots at $40 each. This year, the company supplied the same quantity of ceramic pots at $55 each. Based on this evidence, The Pottery Palace has experienced A) a decrease in supply. B) an increase in supply. C) an increase in the quantity supplied. D) a decrease in the quantity supplied.
a
Let D= demand, S = supply, P = equilibrium price, Q= equilibrium quantity. What happens in the market for walnuts if the Centers for Disease Control and Prevention announces that consuming a half cup of walnuts each week helps to lower bad levels of cholesterol? A) D increases, S no change, P and Q increase B) S increases, D no change, P decreases, Q increases C) D and S increase, P and Q decrease D) D no change, S increases, P decreases, Q decreases
a
Orange juice drinkers want to consume more orange juice at a lower price. Which of the following events would have this effect? A) a decrease in the price of orange juice processing B) an increase in the cost of fertilizer used for orange groves C) a decrease in income, assuming orange juice is a normal good D) a decrease in the population
a
Refer 3-1 A decrease 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.
a
Refer to Figure 3-4. At a price of $10, how many units will be sold? A) 200 B) 400 C) 600 D) 800
a
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for almonds. Which panel best describes what happens in this market when there is an increase in the productivity of almond harvesters? A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
a
Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D1 and S1 (point A). If the price of oranges, a substitute for apples, decreases and the wages of apple workers increase, how will the equilibrium point change? A) The equilibrium point will move from A to E. B) The equilibrium point will move from A to B. C) The equilibrium point will move from A to C. D) The equilibrium will first move from A to B, then return to A.
a
Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D1 and S1 (point A). If there is an increase in the wages of apple workers and an increase in the price of oranges, a substitute for apples, the equilibrium could move to which point? A) none of the points shown B) B C) C D) E
a
Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D1 and S2 (point B). Which of the following changes would cause the equilibrium to change to point C? A) A positive change in the technology used to produce apples and decrease in the price of oranges, a substitute for apples. B) An increase in the wages of apple workers and an increase in the price of oranges, a substitute for apples. C) An increase in the number of apple producers and a decrease in the number of apple trees as a result of disease. D) A decrease in the wages of apple workers and an increase in the price of oranges, a substitute for apples.
a
Refer to Table 3-1. The table above shows the demand schedules for loose-leaf tea of two individuals (Sunil and Mia) and the rest of the market. If the price of loose-leaf tea rises from $3 to $4, the market quantity demanded would A) decrease by 32 lbs. B) increase by 64 lbs. C) increase by 32 lbs. D) decrease by 64 lbs.
a
Refer to Table 3-2. The table above shows the demand schedules for caviar of two individuals (Ari and Sonia) and the rest of the market. If the price of caviar rises from $65 to $75, the market quantity demanded would A) decrease by 36 oz. B) increase by 52 oz. C) increase by 36 oz. D) decrease by 52 oz.
a
Suppose favorable weather resulted in a bumper crop of oranges in Florida. In the market for oranges A) the supply curve shifted to the right resulting in a decrease in the equilibrium price. B) the supply curve shifted to the right resulting in an increase in the equilibrium price. C) the demand curve shifted to the left resulting in a decrease in the equilibrium price. D) the demand curve shifted to the right resulting in an increase in the equilibrium price.
a
Suppose that when the price of hamburgers decreases, the Ruiz family increases their purchases of ketchup. To the Ruiz family, A) hamburgers and ketchup are complements. B) hamburgers and ketchup and substitutes. C) hamburgers and ketchup are normal goods. D) hamburgers are normal goods and hot dogs are inferior goods.
a
Suppose that when the price of strawberries decreases, Simone increases her purchase of whipped cream. To Simone A) strawberries and whipped cream are complements. B) strawberries and whipped cream and substitutes. C) strawberries and whipped cream are normal goods. D) strawberries are a normal good and whipped cream is an inferior good.
a
Vineyards can grow either red wine grapes or white wine grapes on their land. Which of the following would cause the supply of red wine grapes to decrease? A) an increase in the price of white wine grapes B) a decrease in the price of white wine grapes C) an increase in the demand for red wine grapes D) an increase in the price of red wine
a
Which of the following statements is true? A) An increase in demand causes a change in equilibrium price; the change in price does not cause a further change in demand or supply. B) A decrease in supply causes equilibrium price to rise; the increase in price then results in a decrease in demand. C) If both demand and supply increase there must be an increase in equilibrium price; equilibrium quantity may either increase or decrease. D) If demand decreases and supply increases one cannot determine if equilibrium price will increase or decrease without knowing which change is greater.
a
Which of the following statements is true? A) An increase in supply causes a change in equilibrium price; the change in price does not cause a further change in demand or supply. B) A decrease in supply causes equilibrium price to rise; the increase in price then results in a decrease in demand. C) If both demand and supply increase there must be an increase in equilibrium price; equilibrium quantity may either increase or decrease. D) If demand decreases and supply increases one cannot determine if equilibrium price will increase or decrease without knowing which change is greater.
a
Which of the following would cause both the equilibrium price and equilibrium quantity of cotton (assume that cotton is a normal good) to increase? A) an increase in consumer income B) a drought that sharply reduces cotton output C) a decrease in consumer income D) unusually good weather that results in a bumper crop of cotton
a
Which of the following would cause both the equilibrium price and equilibrium quantity of potatoes (assume that potatoes are an inferior good) to decrease? A) an increase in consumer income B) a freeze that sharply reduces potato output C) a decrease in consumer income D) a technological advancement that results in a bumper crop of potatoes
a
Which of the following would cause the equilibrium price of white bread to decrease and the equilibrium quantity of white bread to increase? A) a decrease in the price of flour B) an increase in the price of flour C) an increase in the price of rye bread, a substitute for white bread D) an increase in the price of butter, a complement for white bread
a
Which of the following would shift the supply curve for MP3 players to the left? A) an increase in the price of an input used to produce MP3 players B) a decrease in consumer tastes for MP3 players C) an increase in the number of firms that produce MP3 players D) an increase in the productivity of the workers who produce MP3 players
a
Refer to Figure 3-2. A decrease in the price of the product would be represented by a movement from A) A to B. B) B to A. C) S1 to S2. D) S2 to S1.
b
Refer to Figure 3-4. At a price of $15, how many units will be sold? A) 300 B) 400 C) 600 D) 700
b
Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shift to the left, but the supply curve shifts less than the demand curve. As a result A) both the equilibrium price and quantity of MP3 players will decrease. B) both the equilibrium price and quantity of MP3 players will increase. C) the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will decrease. D) the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease
b
Refer to Figure 3-4. If the price is $10, A) there would be a surplus of 600 units. B) there would be a shortage of 600 units. C) there would be a surplus of 200 units. D) there would be a shortage of 200 units.
b
Refer to Figure 3-4. If the price is $15, A) there would be a surplus of 300 units. B) there would be a shortage of 300 units. C) there would be a surplus of 400 units. D) there would be a shortage of 400 units.
b
"Because chips and salsa are complements, an increase in the price of chips will cause the demand for salsa to decrease. This initial shift in demand for chips results in a higher price for chips; this higher price will cause the demand curve for chips to shift to the right." Which of the following correctly comments on this statement? A) The statement will be true if consumer tastes for chips and salsa do not change. B) The statement is false because a change in the price of chips would not change the demand for chips. C) The statement is false because salsa is an inferior good; chips are normal goods. D) The statement is false because one cannot assume that chips and salsa are complements for all consumers.
b
A change in which variable will change the market demand for a product? A) the price of the product B) population C) technology D) the prices of substitutes in production
b
A decrease in the equilibrium quantity for a product will result A) when the quantity demanded for the product exceeds the quantity supplied. B) when there is a decrease in supply and a decrease in demand for the product. C) when there is an increase in supply and a decrease in demand for the product. D) when there is a decrease in demand and a decrease in the number of firms producing the product.
b
A(n) ________ is represented by a leftward shift of the demand curve while a(n) ________ is represented by a movement along a given demand curve. A) decrease in demand; increase in demand B) decrease in demand; increase in quantity demanded C) increase in demand; decrease in quantity demanded D) decrease in quantity demanded; decrease in demand
b
An increase in input costs in the production of electric automobiles caused the price of electric automobiles to rise. Holding everything else constant, how would this affect the market for gasoline-powered automobiles (a substitute for electric automobiles)? A) The supply of gasoline-powered automobiles would increase and the equilibrium price of gasoline-powered automobiles would decrease. B) The demand for gasoline-powered automobiles would increase and the equilibrium price of gasoline-powered automobiles would increase. C) The demand for gasoline-powered automobiles would decrease because consumers could afford to buy fewer gasoline-powered automobiles. D) The demand for gasoline-powered automobiles would increase and the equilibrium price of gasoline-powered automobiles would decrease.
b
An increase in the price of off-road vehicles will result in A) a smaller quantity of off-road vehicles supplied. B) a larger quantity of off-road vehicles supplied. C) an increase in the demand for off-road vehicles. D) a decrease in the supply of off-road vehicles.
b
An increase in the price of pineapples will result in A) a smaller quantity of pineapples supplied. B) a larger quantity of pineapples supplied. C) a decrease in the demand for pineapples. D) an increase in the supply of pineapples. Answer: B
b
Assume that both the demand curve and the supply curve for MP3 players shift to the right but the supply curve shifts more than the demand curve. As a result A) both the equilibrium price and quantity of MP3 players will decrease. B) the equilibrium price of MP3 players will decrease; the equilibrium quantity will increase. C) the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will decrease. D) the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease.
b
Assume there is a shortage in the market for digital music players. Which of the following statements correctly describes this situation? A) The demand for digital music players is greater than the supply of digital music players. B) Some consumers will be unable to obtain digital music players at the market price and will have an incentive to offer to buy the product at a higher price. C) The price of digital music players will rise in response to the shortage; as the price rises the quantity demanded will increase and the quantity supplied will decrease. D) the shortage will cause an increase in the equilibrium price of digital music players.
b
Buyers rush to purchase stocks in California vineyards following a forecast of a 30 percent decline in this year's grape harvest. What happens in the California wine market as a result of this announcement? A) The demand curve for California wine shifts to the left in anticipation of higher prices in the future. B) The demand curve for California wine shifts to the right in anticipation of higher prices in the future. C) The supply curve for California wine shifts to the right in anticipation of higher prices in the future. D) The supply curve for California wine shifts to the left in anticipation of lower quantities in the future.
b
If an increase in income leads to in an increase in the demand for peanut butter, then peanut butter is A) a neutral good. B) a normal good. C) a necessity. D) a complement.
b
If in the market for peaches, the supply curve has shifted to the left A) the supply of peaches has increased. B) the supply of peaches has decreased. C) the quantity of peaches supplied has increased. D) the quantity of peaches supplied has decreased.
b
If tablet computers are considered substitutes for e-readers, the decline in the price of tablet computers would, all else equal A) increase the demand for e-readers. B) decrease the demand for e-readers. C) increase the quantity demanded for e-readers. D) decrease the quantity demanded for e-readers.
b
If the Apple iPhone and the Samsung Galaxy are considered substitutes, then, other things equal, an increase in the price of the iPhone will A) decrease the demand for the iPhone. B) increase the demand for the Galaxy. C) increase the quantity demanded for the Galaxy. D) increase the quantity demanded for the iPhone.
b
If the price of music downloads was to decrease, then A) the demand for MP3 players would decrease. B) the demand for MP3 players would increase. C) the supply of MP3 players would increase. D) the quantity demanded of MP3 players would decrease.
b
If the price of refillable butane lighters was to decrease, then A) the demand for butane would decrease. B) the demand for butane would increase. C) the quantity of butane demanded would increase. D) the quantity of butane demanded would decrease.
b
If, in response to a decrease in the price of grapes, the quantity of grapes demanded increases, economists would describe this as A) an increase in demand. B) an increase in quantity demanded. C) a change in consumer income. D) an increase in consumers' taste for coffee.
b
If, in response to an increase in the price of chocolate the quantity of chocolate demanded decreases, economists would describe this as A) a decrease in demand. B) a decrease in quantity demanded. C) a change in consumer income. D) a decrease in consumers' taste for chocolate.
b
In 2004, hurricanes destroyed a large portion of Florida's orange and grapefruit crops. In the market for citrus fruit A) the supply curve shifted to the right resulting in an increase in the equilibrium price. B) the supply curve shifted to the left resulting in an increase in the equilibrium price. C) the demand curve shifted to the right resulting in an increase in the equilibrium price. D) the demand curve shifted to the left resulting in a decrease in the equilibrium price.
b
In February, market analysts predict that the price of titanium will rise in March. What happens in the titanium market in February, holding everything else constant? A) The supply curve shifts to the right. B) The supply curve shifts to the left. C) The quantity demanded and the quantity supplied of titanium increase. D) The demand curve shifts to the left.
b
In recent years the cost of producing organic produce in the U.S. has decreased largely due technological advancement. At the same time, more and more Americans prefer organic produce over conventional produce. Which of the following best explains the effect of these events in the organic produce market? A) The supply curve has shifted to the left and the demand curve has shifted to the right. As a result there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price. B) Both the supply and demand curves have shifted to the right. As a result, there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price. C) Both the supply and demand curves have shifted to the right. As a result, there has been an increase in both the equilibrium price and the equilibrium quantity. D) The supply curve has shifted to the left and the demand curve has shifted to the right. As a result, there has been an increase in the equilibrium price and an uncertain effect on the equilibrium quantity.
b
Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall. Holding everything else constant, how would this affect the market for Blu-ray players (a complement to LCD televisions)? A) The supply of Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease. B) The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would increase. C) The demand for Blu-ray players would decrease because consumers could afford to buy fewer LCD televisions and Blu-ray players. D) The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease.
b
Prices of California Merlot wine (assume that this is a normal good) have risen steadily in recent years. Over this same period, prices for French oak barrels used for wine storage have dropped and consumer incomes have risen. Which of the following best explains the rising prices of California Merlots? A) The supply curve for Merlot has shifted to the right while the demand curve for Merlot has shifted to the left. B) The demand curve for Merlot has shifted to the right more than the supply curve has shifted to the right. C) The demand curve and the supply curve for Merlot have both shifted to the left. D) The supply curve for Merlot has shifted to the right more than the demand curve has shifted to the right.
b
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for women's clothing. Which panel best describes what happens in this market when the wages of seamstresses rise? A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
b
Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D2 and S1 (point C). Which of the following changes would cause the equilibrium to change to point B? A) A positive change in the technology used to produce apples and decrease in the price of oranges, a substitute for apples. B) An increase in the wages of apple workers and an increase in the price of oranges, a substitute for apples. C) An increase in the number of apple producers and a decrease in the number of apple trees as a result of disease. D) A decrease in the wages of apple workers and an increase in the price of oranges, a substitute for apples.
b
Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for sugar at the intersection of D1 and S2 (point B). If there is an decrease in the price of fertilizer used on sugar cane and there is a decrease in tastes for sugar-sweetened soft drinks, how will the equilibrium point change? A) The equilibrium point will move from B to A. B) The equilibrium point will move from B to C. C) There will be no change in the equilibrium point. D) The equilibrium point will move from B to E.
b
Refer to Table 3-1. The table above shows the demand schedules for loose-leaf tea of two individuals (Sunil and Mia) and the rest of the market. At a price of $5, the quantity demanded in the market would be A) 51 lbs. B) 63 lbs. C) 76 lbs D) 146 lbs.
b
Refer to Table 3-2. The table above shows the demand schedules for caviar of two individuals (Ari and Sonia) and the rest of the market. If the price of caviar falls from $45 to $35, the market quantity demanded would A) decrease by 50 oz. B) increase by 70 oz. C) increase by 50 oz. D) decrease by 70 oz.
b
Studies have shown that drinking one glass of red wine per day may help prevent heart disease. Assume this is true, and favorable weather has increased the grape harvest of California vineyards. In the market for red wine, these two developments would A) increase demand and decrease supply, resulting in an increase in the equilibrium quantity and a decrease in the equilibrium price of red wine. B) increase demand and increase supply resulting in an increase in the equilibrium quantity and an uncertain effect on the equilibrium price of red wine. C) increase demand and increase supply, resulting in an increase in the equilibrium price and an uncertain effect on the equilibrium quantity of red wine. D) increase demand and increase supply, resulting in an increase in both the equilibrium price and the equilibrium quantity of red wine.
b
Suppose a negative technological change in the production of disease-resistant wheat caused the price of wheat to rise. Holding everything else constant, how would this affect the market for corn (a substitute for wheat)? A) The supply of corn would decrease and the equilibrium price of corn would increase. B) The demand for corn would increase and the equilibrium price of corn would increase. C) The demand for corn would decrease because consumers could afford to buy less wheat and corn. D) The demand for corn would increase and the equilibrium price of corn would decrease
b
The cost of raising beef cattle has risen at the same time as consumer preference for beef has fallen. In the market for beef, this would be represented by the equilibrium price ________ and the equilibrium quantity ________. A) increasing; increasing or decreasing B) increasing or decreasing; decreasing C) decreasing; increasing or decreasing D) increasing or decreasing; increasing
b
Which of the following has occurred as the baby-boom generation ages? A) The demand for soft drinks has increased in the U.S. market. B) The demand for soft drinks has decreased in the U.S. market. C) The global demand for soft drinks has decreased. D) The global demand for soft drinks has remained relatively low.
b
Which of the following is evidence of a surplus of bananas? A) Firms raise the price of bananas. B) The price of bananas is lowered in order to increase sales. C) The equilibrium price of bananas rises due to an increase in demand. D) The quantity demanded of bananas is greater than the quantity supplied.
b
Which of the following is the correct way to describe equilibrium in a market? A) At equilibrium, demand equals supply. B) At equilibrium, quantity demanded equals quantity supplied. C) At equilibrium, market forces no longer apply. D) At equilibrium, scarcity is eliminated.
b
Which of the following would cause a decrease in the equilibrium price and an increase in the equilibrium quantity of salmon? A) a decrease in demand and an increase in supply B) an increase in supply C) an increase in supply and an increase in demand greater than the increase in supply D) a decrease in demand and a decrease in supply
b
If a demand curve shifts to the left, then A) demand has increased. B) quantity demanded has increased. C) demand has decreased. D) quantity demanded has decreased.
c
Assume that the hourly price for the services of tarot card readers has risen and sales of these services have also risen. One can conclude that A) the law of demand has been violated. B) the number of tarot card readers has increased. C) the demand for tarot card readers has increased. D) tarot card readers are deliberately charging high prices because they provide services for superstitious clients.
c
Assume that the price for swimming pool maintenance services has risen and sales of these services have fallen. One can conclude that A) the law of supply has been violated. B) the demand for swimming pool maintenance services has increased. C) the supply of swimming pool maintenance services has decreased. D) swimming pool maintenance services are becoming more technologically advanced.
c
Auctions in recent years have resulted in higher prices paid for letters written by John Wilkes Booth than those written by Abraham Lincoln. What is a reason for this difference in price? A) There is a surplus of letters written by Booth and a shortage of letters written by Lincoln. B) Many people are more fascinated by villains and anti-heroes than by heroic figures. C) There are more letters available for collectors to buy that were written by Lincoln than there are letters that were written by Booth. D) Booth was a well-known actor; the demand for his letters rose as wealthy actors attempted to buy them.
c
Auctions in recent years have resulted in higher prices paid for letters written by John Wilkes Booth than those written by Abraham Lincoln. Which of the following events would cause the price differences in these letters to get smaller? A) The demand for Booth letters decreases. B) The supply of Lincoln letters increases. C) The demand for Lincoln letters increases and the supply of Booth letters increases. D) The demand for Lincoln letters decreases and the demand for Booth letters increases.
c
If more insurance companies decide to cover part of the price of voluntary laser eye surgery and more doctors decide to enter the field of laser eye surgery, what will happen in the market for laser eye surgery as a result of these two factors? A) Demand will increase, but these two factors will not shift the supply curve. B) Supply will increase, but these two factors will not shift the demand curve. C) Demand and supply will both increase. D) Demand will increase and supply will decrease.
c
If the price of gasoline decreases, what will be the impact in the market for public transportation? A) The demand curve for public transportation shifts to the right. B) The quantity of public transportation demanded increases. C) The demand curve for public transportation shifts to the left. D) The quantity of public transportation demanded decreases.
c
If the price of grapefruit rises, the substitution effect due to the price change will cause A) a decrease in the demand for grapefruit. B) a decrease in the demand for oranges, a substitute for grapefruit. C) a decrease in the quantity demanded of grapefruit. D) a decrease in the quantity supplied of grapefruit.
c
If the price of orchids falls, the substitution effect due to the price change will cause A) an increase in the demand for orchids. B) an increase in the demand for roses, a substitute for orchids. C) an increase in the quantity demanded of orchids. D) an increase in the quantity supplied of orchids.
c
In 2004, hurricanes damaged a large portion of Florida's orange crop. As a result of this, many orange growers were not able to supply fruit to the market. At the pre-hurricane equilibrium price (i.e., at the initial equilibrium price), we would expect to see A) a surplus of oranges. B) the quantity demanded equal to the quantity supplied. C) a shortage of oranges. D) an increase in the demand for oranges.
c
In January, buyers of gold expect that the price of gold will rise in February. What happens in the gold market in January, holding all else constant? A) The supply curve shifts to the right. B) The demand curve shifts to the left. C) The demand curve shifts to the right. D) The quantity demanded increases.
c
In a free market such as that depicted above, a surplus is eliminated by A) a price increase, increasing the supply and decreasing the demand. B) a price decrease, decreasing the supply and increasing the demand. C) a price decrease, decreasing the quantity supplied and increasing the quantity demanded. D) a price increase, increasing the quantity supplied and decreasing the quantity demanded.
c
In a perfectly competitive market, there are ________ buyers and ________ sellers. A) many; few B) few; many C) many; many D) few; few
c
Refer 3-1 An increase in population would be represented by a movement from A) A to B. B) B to A. C) D1 to D2. D) D2 to D1.
c
Refer to Figure 3-1. A decrease in the price of a complementary good would be represented by a movement from A) A to B. B) B to A. C) D1 to D2. D) D2 to D1.
c
Refer to Figure 3-1. An increase in the expected future 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.
c
Refer to Figure 3-2. A decrease in the expected future price of the product would be represented by a movement from A) A to B. B) B to A. C) S1 to S2. D) S2 to S1.
c
Refer to Figure 3-2. An increase in the number of firms in the market would be represented by a movement from A) A to B. B) B to A. C) S1 to S2. D) S2 to S1.
c
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for used clothing, an inferior good. Which panel describes what happens in this market as a result of a decrease in income? A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
c
Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D1 and S1 (point A). If there is a shortage of apples 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 C. C) There will be no change in the equilibrium point. D) The equilibrium point will move from A to E.
c
Refer to Table 3-2. The table above shows the demand schedules for caviar of two individuals (Ari and Sonia) and the rest of the market. At a price of $55, the quantity demanded in the market would be A) 42 oz. B) 136 oz. C) 178 oz. D) 233 oz.
c
Refer to Table 3-2. The table above shows the demand schedules for caviar of two individuals (Ari and Sonia) and the rest of the market. At a price of $75, the quantity demanded in the market would be A) 6 oz. B) 46 oz. C) 52 oz. D) 127 oz.
c
Technological advances have resulted in lower prices for digital cameras. What is the impact of this on the market for traditional (non-digital) cameras? A) The demand curve for traditional cameras shifts to the right. B) The supply curve for traditional cameras shifts to the right. C) The demand curve for traditional cameras shifts to the left. D) The supply curve for traditional cameras shifts to the left.
c
The law of demand implies, holding everything else constant, that as the price of gelato A) increases, the demand for gelato will increase. B) increases, the quantity of gelato demanded will increase. C) decreases, the quantity of gelato demanded will increase. D) decreases, the demand for gelato will increase.
c
The popularity of digital cameras has enticed large discount stores like Wal-Mart and Costco to offer digital photo printing services. How does this affect the digital photo printing market? A) The demand curve for digital photo printing services shifts to the right. B) The demand curve for digital photo printing services shifts to the left. C) The supply curve for digital photo printing services shifts to the right. D) The supply curve for digital photo printing services shifts to the left.
c
Tom Searchinger, a senior attorney at the Environmental Defense Fund, observed that generous farm subsidies have encouraged farmers to produce more corn and more wheat. How does this affect the market for fertilizer? A) The supply of fertilizer increases. B) The supply of fertilizer decreases C) The demand for fertilizer increases. D) The demand for fertilizer decreases.
c
Which of the following will shift the demand curve for a good? A) a change in the technology used to produce the good B) an increase in the price of the good C) a decrease in the price of a complementary good D) a decrease in the price of the good
c
Which of the following would cause a decrease in the supply of milk? A) an increase in the price of cookies (assuming that milk and cookies are complements) B) a decrease in the price of milk C) an increase the price of a product that producers sell instead of milk D) an increase in the number of firms that produce milk
c
Which of the following would cause an increase in the equilibrium price and an increase in the equilibrium quantity of watermelons? A) an increase in demand and an increase in supply B) an increase in supply C) an increase in supply and an increase in demand greater than the increase in supply D) a decrease in demand and an increase in supply
c
Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shift to the left, but the supply curve shifts more than the demand curve. As a result A) both the equilibrium price and quantity of MP3 players will decrease. B) the equilibrium price of MP3 players will decrease; the equilibrium quantity will increase. C) the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will decrease. D) the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease.
d
At a product's equilibrium price A) the product's demand curve is the same as the product's supply curve. B) the quantity of the product demanded is greater than the quantity of the product supplied. C) the quantity of the product demanded is less than the quantity of the product supplied. D) the product's demand curve crosses the product's supply curve
d
Danielle Ocean pays for monthly pool maintenance for her home swimming pool. Last week the owner of the pool service informed Danielle that he will have to raise his monthly service fee because of increases in the price of pool chemicals. How is the market for pool maintenance services affected by this? A) There is an increase in the supply of pool maintenance services. B) There is a decrease in the demand for pool maintenance services. C) There is a decrease in the quantity of pool maintenance services supplied. D) There is a decrease in the supply of pool maintenance services.
d
Holding everything else constant, a decrease in the price of bicycles will result in A) a decrease in the quantity of bicycles demanded. B) an increase in the demand for bicycles. C) a decrease in the supply of bicycles. D) an increase in the quantity of bicycles demanded.
d
Holding everything else constant, an increase in the price of MP3 players will result in A) a decrease in the quantity of MP3 players supplied. B) a decrease in the demand for MP3 players. C) an increase in the supply of MP3 players. D) a decrease in the quantity of MP3 players demanded.
d
How does the decreasing use of traditional cameras affect the market for traditional camera film? A) The demand curve for traditional camera film shifts to the right. B) The quantity of traditional camera film demanded decreases. C) The quantity of traditional camera film demanded increases. D) The demand curve for traditional camera film shifts to the left.
d
How does the increasing use of MP3 players affect the market for compact discs? A) The demand curve for compact discs shifts to the right. B) The supply curve for compact discs shifts to the left. C) The supply curve for compact discs shifts to the right. D) The demand curve for compact discs shifts to the left.
d
If a firm expects that the price of its product will be higher in the future than it is today A) the firm will go out of business. B) the firm has an incentive to increase supply now and decrease supply in the future. C) the firm has an incentive to decrease quantity supplied now and increase quantity supplied in the future. D) the firm has an incentive to decrease supply now and increase supply in the future.
d
If, for a product, the quantity supplied exceeds the quantity demanded, the market price will fall until A) the quantity demanded exceeds the quantity supplied. The market will then be in equilibrium. B) quantity demanded equals quantity supplied. The equilibrium price will then be lower than the market price. C) all consumers will be able to afford the product. D) quantity demanded equals quantity supplied. The market price will then equal the equilibrium price.
d
In June, buyers of titanium expect that the price of titanium will fall in July. What happens in the titanium market in June, holding everything else constant? A) The demand curve shifts to the right. B) The quantity demanded increases. C) The quantity demanded decreases D) The demand curve shifts to the left.
d
Prices of microbrewery beer (assume that this is a normal good) have risen steadily in recent years. Over this same period, prices for fermenting vats used in beer making have also risen and consumer incomes have fallen. Which of the following best explains the rising prices of microbrewery beer? A) The supply curve for microbrewery beer has shifted to the left while the demand curve for microbrewery beer has shifted to the right. B) The demand curve for microbrewery beer has shifted to the left more than the supply curve has shifted to the left. C) The demand curve and the supply curve for microbrewery beer have both shifted to the right. D) The supply curve for microbrewery beer has shifted to the left more than the demand curve has shifted to the left.
d
Refer 3-1 If the product represented is an inferior good, an increase in income would be represented by a movement from A) A to B. B) B to A. C) D1 to D2. D) D2 to D1.
d
Refer to Figure 3-1. A decrease in the price of a substitute good would be represented by a movement from A) A to B. B) B to A. C) D1 to D2. D) D2 to D1.
d
Refer to Figure 3-1. If the product represented is a normal good, a decrease in income would be represented by a movement from A) A to B. B) B to A. C) D1 to D2. D) D2 to D1.
d
Refer to Figure 3-2. A decrease in productivity would be represented by a movement from A) A to B. B) B to A. C) S1 to S2. D) S2 to S1.
d
Refer to Figure 3-2. An increase in price of inputs would be represented by a movement from A) A to B. B) B to A. C) S1 to S2. D) S2 to S1.
d
Refer to Figure 3-2. An increase in the price of substitutes in production would be represented by a movement from A) A to B. B) B to A. C) S1 to S2. D) S2 to S1.
d
Refer to Figure 3-4. If the current market price is $10, the market will achieve equilibrium by A) a price increase, increasing the supply and decreasing the demand. B) a price decrease, decreasing the supply and increasing the demand. C) a price decrease, decreasing the quantity supplied and increasing the quantity demanded. D) a price increase, increasing the quantity supplied and decreasing the quantity demanded.
d
Refer to Figure 3-4. If the current market price is $15, the market will achieve equilibrium by A) a price increase, increasing the supply and decreasing the demand. B) a price decrease, decreasing the supply and increasing the demand. C) a price decrease, decreasing the quantity supplied and increasing the quantity demanded. D) a price increase, increasing the quantity supplied and decreasing the quantity demanded
d
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for Fruitopia, a soft drink. Which panel describes what happens in the market for Fruitopia when the price of Snapple, a substitute product, decreases? A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
d
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for bicycle helmets. Which panel best describes what happens in this market if there is a substantial increase in the price of bicycles? A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
d
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for potatoes and that steak and potatoes are complements. What panel describes what happens in this market when the price of steak rises? A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
d
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for rice. What happens in this market if buyers expect the price of rice to fall? A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
d
Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D2 and S2 (point E). Which of the following changes would cause the equilibrium to change to point A? A) A positive change in the technology used to produce apples and decrease in the price of oranges, a substitute for apples. B) An increase in the wages of apple workers and a decrease in the price of oranges, a substitute for apples. C) An increase in the number of apple producers and a decrease in the number of apple trees as a result of disease. D) A decrease in the wages of apple workers and an increase in the price of oranges, a substitute for apples.
d
The supply curve for watches A) shows the supply of watches consumers are willing and able to buy at any given price. B) is downward sloping. C) shows the relationship between the quantity of watches firms are willing and able to supply and the quantity of watches consumers are willing and able to purchase. D) shows the relationship between the price of watches and the quantity of watches supplied.
d
What is the difference between an "increase in supply" and an "increase in quantity supplied"? A) There is no difference between the two terms; they both refer to a shift of the supply curve. B) There is no difference between the two terms; they both refer to a movement along a given supply curve. C) An "increase in supply" means the supply curve has shifted to the right while an "increase in quantity supplied" means at any given price supply has increased. D) An "increase in supply" means the supply curve has shifted to the right while an "increase in quantity supplied" refers to a movement along a given supply curve in response to an increase in price.
d
When deciding on which new products to develop, a firm must devote people, time, and money to designing a new product. Because any firm has only limited resources, it A) should wait until its competitors develop a similar product before deciding on devoting resources to its own product development. B) is not able to develop more than one new product at a time. C) must be certain that the product it chooses to develop will be successful or it will not be able to stay in business. D) faces a trade-off, because resources used to develop one product will not be available to develop another product.
d
Which of the following is evidence of a shortage of walnuts? A) Firms lower the price of walnuts. B) The price of cashews is lowered in order to make up for the walnut shortage. C) The equilibrium price of walnuts falls due to a decrease in demand. D) The quantity demanded of walnuts is greater than the quantity supplied.
d
Which of the following would cause an increase in the supply of peanut butter? A) a decrease in the price of grape jelly (assuming that peanut butter and grape jelly are complements) B) an increase in the price of peanut butter C) an increase the price of a product that producers sell instead of peanut butter D) an increase in the number of firms that produce peanut butter
d
Which of the following would shift the supply curve for MP3 players to the right? A) an increase in the price of a substitute in production B) an increase in consumer income (assuming that all MP3 players are normal goods) C) a decrease in the number of firms that produce MP3 players D) a decrease in the price of an input used to produce MP3 players
d