Chapter 3 Questions
The supply curve shows: A) the same basic info as a demand curve B) how the average cost of production varies with price C) how the quantity produced varies with price D) how the quantity demanded varies with price
C is the correct answer
When the price of automobile insurance increases sharply, the likely impact on the market for automobiles is: A) an increase in demand B) an increase in quantity demanded C) a decrease in demand D) a decrease in quantity demanded E) no change in automobile sales
C is the correct answer
Which of the following is not a determinant of supply? A) input prices B) technology C) tastes D) expectation E) the prices of related products
C is the correct answer
Which of the following will not cause a change in the demand for a product? A) a change in consumer income B) a change in consumer preferences C) a change in the price of the product D) a change in the price of a substitute product E) as a result of a news report, consumers form expectations that the product's price will fall in the future
C is the correct answer
A demand curve shows the relationship between price and quantity demanded, "other things remaining constant." The other things that remain constant include all of the following except the: A) price of the product B) price of complementary products C) price of substitute products D) number of consumers in the demographic group purchasing the product E) preferences of consumers
A is the correct answer
The difference between a change in quantity supplied and a change in supply is that a change in: A) quantity supplied is caused by a change in a good's own, current price, while a change in supply is causes by a change in some other variable, such a input prices, prices of related goods, expectations, or taxes B) supply is caused by a change in a good's own, current price, while a change in the quantity supplied is caused by a change in some other variable, such as input prices, prices of related goods, expectations, or taxes C) quantity supplied is a change in the amount people want to sell, while a change in supply is a change in the amount they actually sell D) supply and a change in the quantity supplied are the same thing
A is the correct answer
Assume the demand schedule for cookies is downward sloping. If the price of cookies falls from $2.50 to $2.25 per dozen: A) the demand for cookies will fall B) the demand for cookies will rise C) a larger quantity of cookies will be demanded D) a smaller quantity of cookies will be demanded
C is the correct answer
Identity the scenario that will cause the supply curve to shift to the left. A) Producer expects now that the price will be lower later B) Price decreases for a substitute in production C) Input price increases D) Increase in number of suppliers
C is the correct answer
Based on widespread reaction to the threat of the HINI virus, the likely effect on the demand curve for hand sanitizers would be A) a shift of the demand curve to the right B) a movement downward along the demand curve to the right C) a shift of the demand curve to the left D) a movement upward along the demand curve to the left
A is the correct answer
The differences between a change in quantity demanded and a change in demand is that a change in: A) quantity demanded is caused by a change in a good's own current price, while a change in demand is caused by a change in some other variable, such as income, tastes, or expectations B) demand is caused by a change in a good's own current price, while a change in quantity demanded is caused by a change in some other variable, such as income, tastes, or expectations C) quantity demanded is a change in the amount people actually buy, while a change in demand is a change in the amount they want to buy D) a change in demand and a change in quantity demanded are the same thing
A is the correct answer
Which of the following scenarios would prompt producers to supply less now than they otherwise would have? A) Producers expecting a higher price in the future B) Producers expecting prices to remain unchanged C) Producers expecting a lower price in the future D) Producers expecting prices to be volatile
A is the correct answer
The law of demand illustrates a(n) ________ relationship between price and _______ A) Direct; quantity demanded B) Inverse; quantity demanded C) Inverse; demand D) Direct; demand
B is the correct
CNN announces that bad weather in Central America has greatly reduced the number of cocoa bean plants, and as a result, it is expected that the price of chocolate will rise in the near future. As a result: A) the current market demand for chocolate will decrease B) the current market demand for chocolate will increase C) the current quantity demanded for chocolate will decrease D) there is no change in the current market for chocolate, but there will be after the current crop of cocoa bean plants is processes into chocolate
B is the correct answer
Each point on the supply curve shows the: A) amount that people want to buy at that price B) quantity supplied at that price C) productive capacity of an individual producer D) the amount producers want to sell to buyers of different income levels
B is the correct answer
If an increase in the price of Product X causes an increase in the demand for Product Y, we can conclude that: A) Products X and Y are complements B) Products X and Y are substitutes C) Products X and Y are normal good D) The price of Product Y will drecrease E) Products X and Y are inferior goods
B is the correct answer
If the price of music downloads decrease, which of the following is most likely to occur. A) Quantity demanded will decrease B) Quantity demanded will increase C) Demand will increase D) Demand will decrease
B is the correct answer
In economics, the demand for a good refers to the amount of the good people: A) would like to have if the good were free B) will buy at various prices C) need to achieve a minimum standard of living D) will buy at alternative income levels
B is the correct answer
The quantity of hamburger that households are willing to purchase is predicted to rise if there is: A) a fall in the price of hot dogs B) a fall in the price hamburger buns C) a rise in the price of onion rings D) a rise in the price of catsup
B is the correct answer
Whenever the price of Good A increases, the demand for Good B increases as well. Good A and B appear to be: A) complements B) substitutes C) inferior goods D) normal goods E) inverse goods
B is the correct answer
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) Equilibrium is a tendency for price to change, a state of perpetual motion E) At equilibrium the "fairest" price for output is achieved
B is the correct answer
Which of the following would not cause a change in the supply of milk? A) an increase in government subsidies to dairy farmers B) an increase in the price of milk C) the discovery of growth hormones to stimulate the milk production of cows D) an increase in the cost of feed for cows E) All of the above will cause a change in the supply of milk
B is the correct answer
Which of the following would not cause an increase in demand for tennis balls? A) a reduction in the price of tennis racquets B) a decrease in the price of tennis balls C) an usually sunny fall and winter D) an increase in the popularity of tennis
B is the correct answer
Andy views beer and pizza complements to one another. If the price of pizza decreases, economists would except: A) Andy's demand for pizza to increase B) Andy's demand for pizza to decrease C) Andy's quantity for pizza demanded to decrease D) Andy's demand for beer to increase E) Andy's demand for beer to decrease
D is the correct answer
To an economist, a decrease in supply means a: A) rightward shift of the supply curve B) movement up along a supply curve C) downward shift of the supply curve D) movement down along the supply curve E) none of the above
E is the correct answer
Vodka and whiskey are considered by consumers to be substitutes. The likely economic impact of a decrease in the price of whiskey is a: A) movement up along the demand curve for vodka B) movement down along the demand curve for vodka C) decrease in the supply of whiskey D) rightward shift of the demand curve for vodka E) leftward shift of the demand curve for vodka
E is the correct answer