ECON 2110 Practice Questions Midterm 2
for which of these goods would demand by the least elastic? a. breakfast cereal b. breakfast cereal at ingles c. kellogs breakfast cereal at ingles d. all breakfast foods
d. all breakfast foods
the market-clearing price is a. the price at which quantity demanded and quantity supplied are equal b. the price at which there is neither a shortage nor a surplus c. the price at which supply and demand curves intersect d. all of the above
d. all of the above
doug likes tomatoes more than he did last year. therefore a. doug must have received an increase in income b. tomatoes must be a necessity c. the supply of tomatoes has increased d. doug is willing to pay more for tomatoes than last year
d. doug is willing to pay more for tomatoes than last year
if the price of tickets to chicago bears games rises by 10% and the quantity demanded rises by 8%, we can conclude that demand for bears tickets a. inelastic b. elastic c. unit elastic d. has increased e. has decreased
d. has increased
the concept of opportunity cost suggests that the cost to airlines of allowing employees to fly for free a. depends on the alternative available to employees b. is 0 c. depends on the value employees place on free travel d. is greater at christmas than in mid-february
d. is greater at christmas than in mid-february
if land suitable for shopping center may also be used for go-cart tracks, an increase in the demand for go-cart driving will a. decrease the demand for shopping centers b. increase the supply of shopping centers c. have no effect on the cost of shopping centers d. raise the cost of building shopping centers e. reduce the cost of building shopping centers
d. raise the cost of building shopping centers
if a new technology is developed that allows twice the soybeans to be grown at half the cost, and at the same time a new soybean drink becomes the hottest thing in town, we would expect a. the equilibrium price and quantity of soybeans to rise b. the equilibrium price and quantity of soybeans to fall c. the equilibrium price to rise, but the effect on quantity to be uncertain d. the equilibrium quantity to rise, but the effect on price to be uncertain e. the equilibrium price to fall, but the effect on quantity to be uncertain
d. the equilibrium quantity to rise, but the effect on price to be uncertain
buyers and sellers communicate primarily a. through surveys b. through government agencies c. through advertising d. through their willingness to buy and sell at various prices e. all of the above
d. through their willingness to buy and sell at various prices
if a firm making widgets lowers its price by 10% and finds that it sells 8% more widgets, the elasticity of demand for this product equals a. 0.8 b. 1.2 c. 8 d. 10 e. there is not enough information to say
a. 0.8
what happens in thee market for ink when the price of lead used to make pencils rises? a. demand increases b. demand decreases c. supply increases d. supply decreases e. none of the above, because ink isn't used in lead
a. demand increases
if the demand for bread increases, what would we expect to happen to the quantity of wheat supplied? a. it to go up b. it to go down c. it to be unchanged, because demand has been affected, not supply d. it to go up, but by less than the quantity demanded
a. it to go up
researches discover that chocolate reduces weight when consumed in large quantities. what happens to the equilibrium price and quantity of chocolate? a. price increases; quantity increases b. price decreases; quantity increases c. price increases; quantity decreases d. price decreases; quantity decreases
a. price increases; quantity increases
Qd = 200 - P Qs = P - 30 if supply increases we would expect that the quantity demanded at $50 a. will equal 150 b. will be greater than 150 c. will be less than 150 d. there is not enough information to say
a. will equal 150
a change in safety regulation that decreases the demand and increases the supply of airline flights will a. increase ticket prices b decrease ticket prices c. increase ticket prices if the demand change is greater than the supply change d . decrease ticket prices if the demand change is greater than the supply change
b decrease ticket prices
which of the following will increase the demand for snowboards? a. a fall in snowboard prices b. a fall in the price of ski lift tickets c. a new technology that enables snowboards to be manufactured for half the cost d. a big sale on skis e. all of the above will increase the demand for snowboards
b. a fall in the price of ski lift tickets
if the supply of snowboards increase, what would we expect to happen in the market for skis (a substitute)? a. demand to increase b. demand to decrease c. supply to increase d. supply to decrease e. neither the demand nor supply of skis would be affected
b. demand to decrease
which of the following would you expect to have the least elastic demand? a. wheat bread made by pepperidge farm b. headache medicine c. wheat bread made by pepperidge farm sold at bi-lo d. there is not enough information to say
b. headache medicine
which of the following would cause both the equilibrium price and the equilibrium quantity of pears to decrease? a. higher price for apples b. lower price for apple c. increase in consumer income if pears are a normal good d. increase in the cost of fertilizers for growing pears e. the discovery that eating pears reduces risk of heart disease
b. lower price for apples
the demand for kellogg's corn flakes tends to be very elastic because a. there are very few close substitutes b. many other cereals are almost perfect substitutes c. if you leave them for too long, they become stale d. the price of milk has been low in recent years
b. many other cereals are almost perfect substitutes
a new type of netting increases the productivity of tuna fisherman. what happens to the equilibrium price and quantity of cod? a. price increases; quantity increases b. price decreases; quantity increases c. price increases; quantity decreases d. price decreases; quantity decreases
b. price decreases; quantity increases
good weather produces an unexpectedly abundant cocoa crop. what happens to the equilibrium price and quantity of chocolate (cocoa is an ingredient in chocolate production)? a. price increases; quantity increases b. price decreases; quantity increases c. price increases; quantity decreases d. price decreases; quantity decreases
b. price decreases; quantity increases
if the price of cattle feed falls, what happens to the equilibrium price and quantity of beef? a. price rises, quantity falls b. price falls, quantity rises c. price + quantity rise d. price + quantity fall e. price falls, effect on quantity uncertain
b. price falls, quantity rises
if the equilibrium price has riven from $10 to $25 and the equilibrium quantity has fallen from 50,000 to 35,000, we would know that a. demand has increased b. supply has decreased c. demand has decreased d. supply has increased e. both supply and demand have increased
b. supply has decreased
if the equilibrium price has fallen from $5.50 to $4.75 while equilibrium quantity has risen from 10,000 to 12,000, we would know that a. demand has decreased b. supply has increased c. demand has increased e. either demand has increased or supply has decreased e. either supply has increased or demand has decreased
b. supply has increased
if price decreases and quantity increases, you know that a. the law of demand has been violated b. supply must have increased c. supply must have decreased d. demand must have increased e. demand must have decrease
b. supply must have increased
what effect would a eduction in the US selling price of japanese-made cars have on the US demand for american-made cars? a. no effect, because price changes affect quantity demanded, not demand b. the demand would decrease c. the demand would increase d. we cannot tell unless we know japan's comparative advatnage e. we cannot tell unless we know what happened to the price of american-made cars
b. the demand would decrease
if there is excess demand for burritos, we would expect a. the price of burritos to fall b. the price of burritos to rise c. certain suppliers to stop making burritos d. a burrito shortage
b. the price of burritos to rise
if the supply curve of a good is absolute fixed (like a wine bottle in 1983) a. the supply curve will be horizontal b. the supply curve will be vertical c. the supply curve will slope downward d. the good will have no supply curve
b. the supply curve will be vertical
if there is excess demand for farm laborers, we would expect a. the wage paid to farm laborers to fall b. the wage paid to farm laborers to rise c. the price of farm commodities to fall d. an increase in the supply of farm laborers e. more than one of the above answers is correct
b. the wage paid to farm laborers to rise
which of the following will lead to an increase in the demand for satellite TV? a. a fall in consumer income (normal good) b. a big satellite tv sale c. a rise in the price of netflix (a substitute) d. all of the above
c. a rise in the price of netflix (a substitute)
a decrease in the supply of aluminum bikes could result from a. increase in supply of aluminum b. decrease in income (normal good) c. rise in price of aluminum d. fall in price of aluminum
c. rise in price of aluminum
what happens in the market for cream cheese when the price of cream (input) falls? a. demand increases b. demand decreases c. supply increases d. supply decreases e. both b and d
c. supply increases
if someone tells you that they "can't live without" something, you would assume, a. that they will die if they don't have it b. that their demand is likely to be elastic c. that their demand is likely to be inelastic d. that the law of demand won't apply to them e. that they have excess demand
c. that their demand is likely to be inelastic
if the price of batteries rises, you would expect a. the demand for flashlights to increase b. the demand for electricity to decrease c. the demand for electricity to increase d. the demand for battery powered toys to increase
c. the demand for electricity to increase
if a 10% increase in the price of beer reduces the quantity demanded by 8%, then demand for beer is a. inelastic b. elastic c. unit elastic d. has increased e. has decreased
a. inelastic
if you calculate the elasticity of demand for a cut in the price of unicorns from $6 to $5, you will find that demand is a. inelastic b. elastic c. unit elastic d. there is not enough information to say e. the elasticity of demand is unaffected by the supplier's choice of price
a. inelastic
suppose you sell jewelry boxes and a business consultant you have hired determines that demand for your product is elastic. if you want to increase your total revenue, you should therefoer a. lower the price of your jewelry boxes b. raise the price of your jewelry boxes c. increase the supply of your jewelry boxes d. lower your production costs
a. lower the price of your jewelry boxes
demand for maple nut ice cream tends to be elastic because a. other flavors of ice cream are almost perfect substitutes b. the market is very broadly defined c. there are few close substitutes d. it must be eaten quickly
a. other flavors of ice cream are almost perfect substitutes
which of the following would you expect to have the least elastic demand? a. penicillin b. bananas c. bananas from colubmia c. bananas from columbia sold at albertson e. all would have equal elasticity of demand, because each would have a downward sloping demand curve
a. penicillin
the demand for potatoes tends to be less elastic than the demand for movies because a. potatoes have many good substitutes b. many people don't like potatoes c. movies have better and closer substitutes d. given the choice, most people prefer potatoes to movies
a. potatoes have many good substitutes
a "normal good" is a good for which a. quantity demanded rises when incomes rises b. quantity demanded rises when price rises c. quantity demanded falls when price rises d. an increase in demand raises price e. an increase in demand raises quantity
a. quantity demanded rises when incomes rises
which of the following will increase the supply of oranges? a. terrific orange growing weather b. the discovery that oranges cure cancer c. an increase in the supply of grapefruit (substitute) d. all will increase the supply of oranges
a. terrific orange growing weather
the supply curve for pasta reflects a. the cost of the wheat from which pasta is made b. the perceived health benefits of pasta c. the price of spaghetti sauce, a complement d. all of the above
a. the cost of the wheat from which pasta is made
which of the following will not decrease the supply of burritos? a. the discovery that eating burritos causes cancer b. a rise in the price of tortillas used to make burritos c. a rise in the price of wages paid to burrito-making employees d. all of the above will decrease supply of burritos
a. the discovery that eating burritos causes cancer
what is the effect on the market for cherries? (consider whether the demand for cherries or the supply of cherries or both change) a. the equilibrium price increases; the equilibrium quantity increases b. the equilibrium price increases; the equilibrium quantity decreases c. the equilibrium price decreases; the equilibrium quantity increases d. the equilibrium price decreases; the equilibrium quantity decreases e. the equilibrium price decreases; there is not enough information to tell what happens to quantity
a. the equilibrium price increases; the equilibrium quantity increases
what would happen in the market for pizza in restaurants if the price of flour increase and the price of a meal in a chinese restaurant increased? a. the equilibrium price of pizza would increase, but the impact on the amount of pizza sold would be uncertain b. the equilibrium price of pizza would decrease, but the impact on the amount of pizza sold would be uncertain c. both equilibrium price + quantity of pizza would decrease d. the equilibrium quantity of pizza would increase, but the impact on price would be uncertain e. the equilibrium quantity of pizza would decrease, but the impact on price would be uncertain
a. the equilibrium price of pizza would increase, but the impact on the amount of pizza sold would be uncertain
the government bans the use of coal-fired chocolate furnaces (the cheapest way of producing chocolate), at the same time consumer incomes increases (chocolate is a normal good). what happens to the equilibrium price and quantity of chocolate? a. the equilibrium price will increase, but the effect on equilibrium quantity is uncertain b. the equilibrium price will decrease, but the effect on equilibrium quantity is uncertain c. both equilibrium price + quantity will decrease d. the equilibrium quantity will increase, but the effect on equilibrium price is uncertain e. the equilibrium quantity will decrease, but the effect on equilibrium price is uncertain
a. the equilibrium price will increase, but the effect on equilibrium quantity is uncertain
what would happen in the market for grape jelly if a bad grape harvest accompanies an exceptionally good peanut harvest (peanut butter and grape jelly are complements)? a. the equilibrium price would increase, but the effect on equilibrium quantity would be uncertain b. the equilibrium price would decrease, but the effect on equilibrium quantity would be uncertain c. both equilibrium price + quantity will decrease d. the equilibrium quantity would increase, but the effect on equilibrium price would be uncertain e. the equilibrium quantity would decrease, but the effect on equilibrium price would be uncertain
a. the equilibrium price would increase, but the effect on equilibrium quantity would be uncertain
suppose that the price of oranges and apples rises. what would you expect to happen to the market price and quantity of orange juice? (apple juice is a substitutes) a. the equilibrium price would increase, but the impact on equilibrium quantity would be uncertain b. the equilibrium price would decrease, but the impact on equilibrium quantity would be uncertain d. both equilibrium price and quantity would increase d. equilibrium quantity would increase, but the impact on the equilibrium price would be uncertain e. equilibrium quantity would decrease, but the impact on the equilibrium price would be uncertain
a. the equilibrium price would increase, but the impact on equilibrium quantity would be uncertain
good economic decisions are those for which a. the marginal benefits are greater than the marginal cost b. the total benefits are greater than the total costs c. the marginal costs are greater than the totalcosts d. opportunity costs are less than marginal costs
a. the marginal benefits are greater than the marginal cost
suppose a landmark court case makes it more expensive to run day care center, but also makes it less likely that children cared for will be harmed. we can expect a. the price of day care services to increase b. the price of day care services to decrease c. the price of day care services to increase only if demand is upward sloping d. the price of day care services to increase only if the change in supply is greater than the change in demand
a. the price of day care services to increase
when there is excess supply a. there is downward pressure on price b. there is upward pressure on price c. the market is in equilibrium d. there are too many buyers chasing too few goods e. a shortage will result
a. there is downward pressure on price
when the price of a good or service changes, a. there is movement along the demand curve b. the demand curve shifts in the opposite direction c. the demand curve shifts in the same direction d. any of the above, depending upon whether price increases or decreases
a. there is movement along the demand curve
which of the following is least likely to shift the demand for the burrito that moe's sells? a. they hold a burrito sale b. a new formula that makes their burritos even more delicious c. chipotle increases its prices d. consumer income falls, and burritos are a normal good e. all will increase the number of burritos sold
a. they hold a burrito sale
we can expect the total amount spent on coffee to rise if the elasticity of demand is a. 0.8 b. 2.5 c. 9.8 d. we do not have sufficient information to answer
a. 0.8
which of the following will not increase the demand for burritos? a. a big burritos sale b. the discover that eating burritos cures cancer c. a rise in the price of burgers, a substitute d. a fall in the price of guacamole, a complement e. all of the above will increase demand for burritos
a. a big burritos sale
which of the following is most likely to increase the demand for motorcycles? a. a fall in the price of motorcycle helmets b. an increase in the price of motorcycle advertising c. a fall in the price of motorcycles d. all of the above
a. a fall in the price of motorcycle helmets
a demand curve is a. a generally downward-sloping line relating the price of a good with the quantity demanded b. a generally upward-sloping line relating the price of a good with the quantity demanded c. a curve that relates income and the price of substitutes d. just a + c
a. a generally downward-sloping line relating the price of a good with the quantity demanded
supply + demand are always more elastic in the long-run because a. a greater range of actions can be taken in longer periods b. price generally declines over time c. price generally rises over time d. people value wealth more in longer periods e. income rises over time
a. a greater range of actions can be taken in longer periods
which of the following will NOT increase the supply of titanium golf clubs? a. a rise in the demand for golf clubs b. a fall in the price of titanium c. an improvement in golf club making technology d. all of the above will increase supply
a. a rise in the demand for golf clubs
if the price is raised by $2 and the quantity falls by 20, the elasticity of demand a. equals 2 b. equals 10 c. equals 20 d. is greater than 1 e. cannot be determined without more information
e. cannot be determined without more information
if a 25% increase in the price of skateboards reduces the quantity demanded by 500, then the demand for skateboards a. elastic b. inelastic c. has increased d. has decreased e. downward sloping, but not enough info to know elasticity
e. downward sloping, but not enough info to know elasticity
suppose the price of tea increases. as a result, we would expect to see a. an increase in the demand for coffee (a substitute) b. an increase in the demand of sugar (a complement) c. a decrease in the demand for tea d. all of the above
a. an increase in the demand for coffee (a substitute)
which of the following would not be expected to decrease the demand for grape soda? a. an increase in the price of grape soda d. decrease in the price of orange soda c. a fall in income (normal good) d. all of the above would decrease the demand for grape soda
a. an increase in the price of grape soda
elasticity of demand depends on a. closeness of substitutes b. whether the good is normal or inferior c. the law of demand d. all of the above
a. closeness of substitutes
if the equilibrium price in a market has risen from $1 to $5 and equilibrium quantity has risen from 100 to 500, we would know that a. demand has increased b. supply has increase c. both supply and demand have increased d. the law of demand has been violated
a. demand has increase
a normal good is one for which a. demand increases when income increases b. demand increases when price decreases c. demand increases when tastes change d. demand is elastic e. demand is inelastic
a. demand increases when income increases
frost that destroys half of florida's orange crop will make orange growers unhappy only if a. demand is elastic b. demand is inelastic c. supply is elastic d. supply is inelastic
a. demand is elastic
if you are told "nobody will buy more of that product even if they cut the price in half," you can conclude that a. demand is inelastic b. demand is elastic c. supply is inelastic d. supply is elastic e. the marginal costs exceed the marginal benefits for the average buyer
a. demand is inelastic
if the supply of peanut butter increases, what would we expect to happen in the market for jelly (a complement)? a. demand to increase b. demand to decrease c. supply to increase d. supply to decrease e. neither the demand nor the supply of jelly would be affected
a. demand to increase
if a price of 9% leads to a rise in quantity supplied of 12%, we know that supply is a. elastic b. inelastic c. unit elastic d. downward sloping
a. elastic
if you drop your prices + total revenue increases, demand must be a. elastic b. inelastic c. unit elastic d. downward sloping, but not enough info to know elasticity
a. elastic
if the demand for french bread is elastic and the baker holds a french bread sale a. he will sell a lot more bread b. he may sell more bread, but not a lot more c. he won't sell any more berad d. demand will increase
a. he will sell a lot more bread
if you paid $25,000 for your car just a short while ago, but the best offer you can get for it now is $12,000. you should only sell the car a. if its worth to you is less than $12,000 b. if its worth to you is less than $25,000 c. if you can get something close to what you paid for it d. if you value it more than $12,000
a. if its worth to you is less than $12,000
anything that increases the value that potential buyers received from a good may be expected to a. increase demand b. increase supply c. increase both supply and demand d. increase demand but decrease supply
a. increase demand
a supply curve slops upwards because a. increase in price gives producers an incentive provide a larger quantity b. increase in input prices means supply increases c. as more is produced, per unit production costs fall d. the supply curve must intersect demand curve
a. increase in price gives producers an incentive provide a larger quantity
what would happen in the market for shredded wheat cereal if the price of wheat decreased and the price of corn flakes (substitutes) increased? a. the equilibrium price would increase, but the impact on equilibrium quantity would be uncertain b. the equilibrium price would decrease, but the impact on equilibrium quantity would be uncertain d. both equilibrium price and quantity would increase d. equilibrium quantity would increase, but the impact on the equilibrium price would be uncertain e. equilibrium quantity would decrease, but the impact on the equilibrium price would be uncertain
d. equilibrium quantity would increase, but the impact on the equilibrium price would be uncertain
which of the following would not be expected to reduce the demand for peanut butter? a. increase in price of jelly b. decrease in price of tuna (substitute) c. discovery that peanut butter causes cancer d. increase in price of peanut butter e. all would reduce demand for peanut butter
d. increase in price of peanut butter
which of the following is most likely to increase the demand for downtown parking a. improved bus service to the downtown area b. lower downtown parking fees c. more downtown parking lots d. lower gas prices
d. lower gas prices
an increase in the price of gasoline a. increases the supply of gasoline (shifts supply curve) b. decreases the demand for gasoline (shifts demand curve) c. both of the above d. none of the above
d. none of the above
if the price of peanut butter increases and the demand for jelly increases as a result, then a. pb is a inferior good and jelly is a normal good b. pb + jelly are complements c. pb is a normal good and jelly is an inferior good d. pb + jelly are substitutes e. the law of demand has been violated
d. pb + jelly are substitutes
doctors charge high fees because a. acquiring a medical degree is very expensive b. their practices are costly to maintain c. they hope to retire at a reasonably young age d. people are willing to pay high fees for medical services
d. people are willing to pay high fees for medical services
why does quantity demanded fall as price rises? a. supply decreases b. demand decreases c. BOTH supply and demand decrease d. people switch to substitutes
d. people switch to substitutes
the price of ham rises sharply. what happens to the equilibrium price + quantity of cheese (ham and cheese are complements)? a. price rises, quantity falls b. price falls, quantity rises c. price + quantity rise d. price + quantity fall e. price falls, effect on quantity is uncertain
d. price + quantity fall
"elasticity" measure the relationship between a. supply and demand b. quantity supplied + quantity demanded c. supply and closeness of substitutes d. price and quantity e. none of the above
d. price and quantity
a new report shows that most sardines have high mercury content (mercury is harmful to humans). what happens to the equilibrium price and quantity of cod? a. price increases; quantity increases b. price decreases; quantity increases c. price increases; quantity decreases d. price decreases; quantity decreases
d. price decreases; quantity decreases
what would an increase in he price of diamonds do to the supply of diamond rings? a. nothing; price changes quantity supplied, not supply b. nothing; the demand for diamond rings would change, not the supply c supply would increase because diamond rings are a luxury good d. supply would decrease
d. supply would decrease
if i tell you the price of cameras has fallen and the number sold has fallen rather than risen, you would know that a. the law of demand has been violated b. supply is greater than demand c. demand is greater than supply d. the demand for cameras has decreased
d. the demand for cameras has decreased
if you discover that the price of college education has risen and the number of students seeking to enroll has increased as well, you would know that a. college education does not obey the law of demand b. the fixed supply of universities and colleges dominates the price increase c. the demand for college education is inelastic d. the demand for college education has increased
d. the demand for college education has increased
if peanut butter and jelly are complements, as the price of jelly goes up, a. the supply of peanut butter goes up b. the supply of peanut butter goes down c. the demand for peanut butter goes up d. the demand for peanut butter goes down
d. the demand for peanut butter goes down
a decrease in oil prices makes it cheaper to transport chocolate to market while the price of peppermint (a substitute) rises. what happens to the equilibrium price and quantity of chocolate? a. the equilibrium price will increase, but the effect on equilibrium quantity is uncertain b. the equilibrium price will decrease, but the effect on equilibrium quantity is uncertain c. both equilibrium price + quantity will decrease d. the equilibrium quantity will increase, but the effect on equilibrium price is uncertain e. the equilibrium quantity will decrease, but the effect on equilibrium price is uncertain
d. the equilibrium quantity will increase, but the effect on equilibrium price is uncertain
what would happen in the market for news programs if the salaries of anchormen and women fall while the price of newspapers (a substitute) rises? a. the equilibrium price would increase, but the effect on equilibrium quantity would be uncertain b. the equilibrium price would decrease, but the effect on equilibrium quantity would be uncertain c. both equilibrium price + quantity will decrease d. the equilibrium quantity would increase, but the effect on equilibrium price would be uncertain e. the equilibrium quantity would decrease, but the effect on equilibrium price would be uncertain
d. the equilibrium quantity would increase, but the effect on equilibrium price would be uncertain
we observe that the price of paper clips has risen and the quantity being sold on the market has fallen. which of the following is the most likely explanation a. the demand for paper clips has increased b. the demand for paper clips has decreased c. the suppy for paper clips has increased d. the supply for paper clips has decreased
d. the supply for paper clips has decreased
if quantity demanded falls by 100,000 and price rises by 2 cents, we know that a. demand is elastic b. demand in elastic c. demand is unit elastic d. there is not enough information to calculate elasticity
d. there is not enough information to calculate elasticity
if we raise price by 10 cents + quantity demanded falls by 10,000 units, we would conclude that a. demand is elastic b. demand is inelastic c. demand is unit elastic d. there is not enough information to determine whether demand is elastic or not
d. there is not enough information to determine whether demand is elastic or not
how do buyers and sellers coordinate their desires? a. through market research b. by talking together c. by following the direction of government agencies d. through their independent effect on prices e. they don't
d. through their independent effect on prices
what is the elasticity of demand for an increase in the price of unicorns from $1 to $2 a. 0.01 b. 0.1 c. 1 d. 10
b. 0.1
if your raise your price by 50% and quantity demanded falls by 40% the elasticity demanded for your product is a. 8 b. 1.25 c. 0.8 d. 0.5 e. 0.4
b. 0.8
which of the following would reduce the demand for orange juice? a. an increase in the price of grape juice b. a decrease in the price of grape juice c. an early frost that destroys half the florida orange crop d. the discovery that orange juice cures the common cold e. just b + c
b. a decrease in the price of grape juice
a decrease in the supply of aluminum bikes could result from a. the development of a low-cost bike-making technology b. a rise in the price of aluminum c. an increase in the supply of aluminum d. a fall in the demand for aluminum bikes
b. a rise in the price of aluminum
which of the following will increase the demand for frisbees? a. a fall in the cost of plastics (an input) b. a rise in the price of nerf footballs (a substitute) c. a fall in the price of frisbees d. new technology that allows frisbees to be made more cheaply e. all of the above
b. a rise in the price of nerf footballs (a substitute)
the law of demand states that a. as individuals become wealthier, their demand increases b. as prices go up, quantity demanded goes down c. as prices go down, demand goes up d. the market clear where quantity demanded equal quantity supplied e. all of the above
b. as prices go up, quantity demanded goes down
what happens in the market for tires when the cost of aluminum (a n input to automobile production) increases? a. demand increases b. demand decreases c. supply increases d. supply decreases e. none of the above, because aluminum isn't used in tires
b. demand decreases
if you discover that the equilibrium price and quantity of soybeans has risen, you would conclude that a. demand has decreased b. demand has increased c. supply has decreased d. supply has increased e. none of the above
b. demand has increased
if the supply of orange juice increases, what would we expect to happen in the market for apple juice (a substitute) a. demand to increase b. demand to decrease c. supply to increase d. supply to decrease e. neither the demand nor the supply of apple juice would be affected
b. demand to decrease
if the supply of peanut butter increases, what would we expect to happen in the market for tuna (a substitute for peanut butter on sandwiches) a. demand to increase b. demand to decrease c. supply to increase d. supply to decrease e. neithernthe demand nor supply of tuna would be affected
b. demand to decrease
if the supply of tea increases, what would we expect to happen in the market for coffee (a substitute)? a. demand to increase b. demand to decrease c. supply to increase d. supply to decrease e. neither the demand nor the supply of tea would be affected
b. demand to decrease
the law of supply predicts that a. if price goes up, quantity supplied will not fall unless demand changes b. if price goes up, quantity supplied will not fall whether or not demand changes c. supply will shift when demand shifts d. supply will increase when costs fall
b. if price goes up, quantity supplied will not fall whether or not demand changes
a businesswoman says "no matter how much we cut price, we just can't seem to get any new customers." in other words, she thinks demand for her product is a. elastic b. inelastic c. unit elastic d. less than the supply
b. inelastic
if a good is a necessity, demand for that good would tend to be a. elastic b. inelastic c. elastic when price falls; inelastic when it rises d. unit elastic e. horizontal
b. inelastic
if price rises from 10 to 12 and quantity demanded falls by 12%, we know that demand is a. elastic b. inelastic c. unit elastic d. downward sloping e. there is not enough information to say
b. inelastic
if you raise your price from $1 to $1.50 and quantity demanded falls from 20 to 15, you know demand for the product is a. elastic b. inelastic c. unit elastic d. downward sloping, but there is not enough information to calculate elasticity
b. inelastic
the economic model a. is about how money is made b. is about how people make choice c. assumes that people care most about money d. assumes that people have no choices to make
b. is about how people make choices
suppose you like to make and eat coconut cream pies. what will a rise in the price of coconuts do to your demand for cream? a. it will increase b. it will decrease c. it won't change, since the two are separate products d. supply will be affected, not demand
b. it will decrease
if the demand function is Qd = 40 - 2P and the price raises by 10, what will happen to the quantity demanded? a. it will fall by 10 b. it will fall by 20 c. it will fall, but in order to determine the precise amount, we would need a supply function d. demand will fall, but quantity demanded will not change
b. it will fall by 20
which of the following would make the demand for pepsi more elastic? a. improvement in pepsi formula b. launching of 5 new brands of cola by 5 different companies c. coca cola going bankrupt d. cola is discovered to reduce the risk of colon cancer e. pepsi is discovered to reduct the risk of colon cancer
b. launching of 5 new brands of cola by 5 different companies
the supply curve slops upward because a. it must in order to cross the demand curve b. opportunity costs rise with the quantity supplied c. there are very close substitutes d. marginal costs are low
b. opportunity costs rise with the quantity supplied
"a doubling in gasoline prices has not reduced purchases at all." the speaker evidently believes that demand for gasoline is a. perfectly elastic b. perfectly inelastic c. greater than supply d. less than supply e. unit elastic
b. perfectly inelastic
demand is said to be inelastic if a. quantity demanded moves proportionally more than price b. quantity demanded moves proportionally less than price c. quantity demanded moves proportionally the same amount as price price d. quantity demanded moves proportionally the same amount as price e. demand does not decrease very much when price increases
b. quantity demanded moves proportionally less than price
suppose that a fall in the price of good X causes less of good Y to be sold. this would mean the X and Y are a. complements b. substitutes c. unrelated d. normal goods e. luxury goods
b. substitutes
the marginal cost of taking your car for a spin around the block includes which of the following a. the cost of your car b. the cost of the gas you use driving around the block c. the cost of auto-insurance d. the cost of the new tires you just bought e. all of the above
b. the cost of the gas you use driving around the block
if the price of coffee falls and the quantity of coffee demanded falls as well, we know that a. the law of demand has been violated b. the demand for coffee has fallen c. the price of tea (or some other substitute) must have risen d. the supply of coffee must have decreased e. the supply of coffee much have increased
b. the demand for coffee has fallen
if clemson decides to increase tuition so as to raise its revenue, it must believe that a. the demand for education at clemson is elastic b. the demand for education at clemson is inelastic c. the demand for education at clemson is increased d. the supply of education at clemson has increased
b. the demand for education at clemson is inelastic
professional football players receive on average much higher wages than professional soccer players in the US because a. football is a more dangerous sport b. the demand for football is greater c. professional football teams use a draft system d. the soccer season is longer and so players will be unemployed for a smaller portion of the year
b. the demand for football is greater
if the price of olives rises just as new studies reveal additional health benefits from using olive oil, we would expect a. the equilibrium price of olive oil to rise and the quantity to fall b. the equilibrium price of olive oil to rise, but the effect on quantity to be uncertain c. the equilibrium price and quantity of olive oil to rise d. the equilibrium quantity of olive oil to fall, but the effect on price to be uncertain e. the equilibrium quantity of olive oil to rise, but the effect on price to be uncertain
b. the equilibrium price of olive oil to rise, but the effect on quantity to be uncertain
if you hear that a terrible frost has ravaged the california citrus crop, you would expect a. the equilibrium price + quantity of orange juice to rise b. the equilibrium price of orange juice to rise and the quantity to fall c. the equilibrium price of orange juice to fall and the quantity to rise d. the equilibrium price + quantity of orange juice to fall e. the equilibrium price of orange juice to rise but the effect on quantity to be uncertain
b. the equilibrium price of orange juice to rise and the quantity to fall
illegal immigration substantially reduces wages in the chocolate industry at the same time researchers discover that eating chocolate makes you fat. what happens to the equilibrium price and quantity of chocolate? a. the equilibrium price will increase, but the effect on equilibrium quantity is uncertain b. the equilibrium price will decrease, but the effect on equilibrium quantity is uncertain c. both equilibrium price + quantity will decrease d. the equilibrium quantity will increase, but the effect on equilibrium price is uncertain e. the equilibrium quantity will decrease, but the effect on equilibrium price is uncertain
b. the equilibrium price will decrease, but the effect on equilibrium quantity is uncertain
what would happen in the market for silk shirts if the price of silk falls while the price of cotton shirts (a substitute) also falls? a. the equilibrium price would increase, but the effect on equilibrium quantity would be uncertain b. the equilibrium price would decrease, but the effect on equilibrium quantity would be uncertain c. both equilibrium price + quantity will decrease d. the equilibrium quantity would increase, but the effect on equilibrium price would be uncertain e. the equilibrium quantity would decrease, but the effect on equilibrium price would be uncertain
b. the equilibrium price would decrease, but the effect on equilibrium quantity would be uncertain
what would happen in the market for pens if both the price of ink (an input) and the price of pencil lead falls? a. the equilibrium price would increase, but the impact on equilibrium quantity would be uncertain b. the equilibrium price would decrease, but the impact on equilibrium quantity would be uncertain d. both equilibrium price and quantity would increase d. equilibrium quantity would increase, but the impact on the equilibrium price would be uncertain e. equilibrium quantity would decrease, but the impact on the equilibrium price would be uncertain
b. the equilibrium price would decrease, but the impact on equilibrium quantity would be uncertain
what would happen in the market for ramen noodles if the price of wheat (input) falls while consumer income rises (ramen noodles are an inferior good)? a. the equilibrium price would increase, but the impact on equilibrium quantity would be uncertain b. the equilibrium price would decrease, but the impact on equilibrium quantity would be uncertain d. both equilibrium price and quantity would increase d. equilibrium quantity would increase, but the impact on the equilibrium price would be uncertain e. equilibrium quantity would decrease, but the impact on the equilibrium price would be uncertain
b. the equilibrium price would decrease, but the impact on equilibrium quantity would be uncertain
jon needs 200 cases of cristal champagne to cater a wedding. first, jon visits all the wine shops located within 10 miles, but still is short a few cases. finally jon visits all shops located within 50-100 miles, and gets the last few cases he needs. jon's struggles illustate a. the law of demand b. the law of supply c. the principal of absolute advatnage d. that sometimes the gains from trade aren't worth it
b. the law of supply
a rational decision-maker takes action only if a. the average benefit is greater than the average cost b. the marginal benefit is greater than the marginal cost c. the total benefit is positive d. society will be made better off e. all of the above
b. the marginal benefit is greater than the marginal cost
if the elasticity of demand of for camera film is 2.6, and the price of film is raised by 10%, a. the quantity demanded will fall by 2.6% b. the quantity demanded will fall by 26% c. the quantity demanded will fall by 260% d. the quantity demanded must fall, but we need more information to determine by how much
b. the quantity demanded will fall by 26%
if the price of grapes falls a. demand for grapes increases b. the quantity of grapes demanded increases c. there will be a grape shortage d. all of the above
b. the quantity of grapes demanded increases
a demand curve indicates the value consumers get from a good. it is measured as a. the benefits people received less the cost b. the quantity people will buy at various prices c. the prices people prefer to pay d. all of the above
b. the quantity people will buy at various prices
the recent drought in the midwest has been severe, and experts say that roughly half the corn crop has been damaged. as a result, we would expect a. the demand for corn to decrease b. the supply of corn to decrease c. the demand of corn to increase d. the supply of corn to increase e. both a + b
b. the supply of corn to decrease
if the price of silver falls, you would expect a. the demand for silver jewelry to increase b. the supply of silver jewelry to increase c. the demand for silver jewelry to decrease d. the supply of silver jewelry to decrease e. both a + b
b. the supply of silver jewelry to increase
Qd = 200 - P Qs = P - 30 if supply increases we would expect that the quantity supplied at $50 a. will be equal to 20 b. will be greater than 20 c. will be less than 20 d. there is not enough information to say
b. will be greater than 20
when you are a student, you are more likely to go by bus; once you have a job, you are more likely to fly. this is because once you have a job a. your demand for transportation becomes more elastic, since your opportunity costs increase b. your demand for transportation becomes less elastic, since your opportunity costs increase c. your demand for transportation becomes more elastic, since your opportunity costs decrease d. your demand for transportation becomes less elastic, since your opportunity costs decrease e. traveling by bus will usually cost you less than traveling by airplane
b. your demand for transportation becomes less elastic, since your opportunity costs increase
what happens to the equilibrium price and quantity of tomato juice after the hurricane? a. price rises, quantity falls b. price falls, quantity rises c. price + quantity rise d. price + quantity fall e. price falls, effect on quantity is uncertain
both price and quantity rise
if your raise your price from 5 to 10 and the quantity you sell falls from 20 to 15, the elasticity of demand for your product is a. 25 b. 2.5 c. 0.25 d. 4 e. 40
c. 0.25
if price is raised from 10 to 12 and quantity supplied rises from 100 to 108, elasticity of supply equals a. 9 b. 10 c. 0.4 d. 2.5 e. there is insufficient information to say
c. 0.4
if price elasticity of a demand for a good is 3, then a 10% increas ein price would be expected to result in a. 3% decrease in quality demanded b. 3% increase in quality demanded c. 30% decrease in quality demanded d. 3% decrease in quality demanded e. 3% decrease in quality demanded
c. 30% decrease in quality demanded
which of the following would lead to an increase in both the equilibrium price and quantity of an inferior good, such as macaroni and cheese? a. an increase in income and an even bigger rise in the price of wheat used to make macaroni b. a decrease in income and an even bigger rise in the price of wheat used to make macaroni c. a decrease in income d. a rise in the price of wheat used to make macaroni
c. a decrease in income
which of the following would cause an increase in the demand for potato chips a. a fall in the price of potato chips b. a fall in the price of corn ships, if corn chips and potato chips are substitutes c. a fall in the price of dip if dip and potato chips are complements d. a major increase in the supply of potato chips due to an excellent potato harvest e. none of the above
c. a fall in the price of dip if dip and potato chips are complements
which of the following will increase the demand for waffles? (shift demand outwards) a. a fall in the price of waffles b. a fall in the price of waffle flour c. a fall in the price of waffle syrup d. all of the above
c. a fall in the price of waffle syrup
which of the following will NOT increase the demand for coffee? a. the discovery that coffee cures cancer b. a rise in income and coffee is a normal good c. a great coffee harvest d. all of the above will increase the demand for coffee
c. a great coffee harvest
which of the following will increase the demand for tea? a. a blight destroys 30% of the tea crop in india b. wonderful weather doubles the usual tea crop c. a rise in the price of coffee d. new technology that allows tea to be made more cheaply e. all of the above
c. a rise in the price of coffee
if a good is "normal," an increase in income will result in a. no change in demand for the good b. a decrease in demand for the good c. an increase in demand for the good d. no change in demand, but a movement along the demand curve
c. an increase in demand for the good
if clemson raises the price of on-campus parking, you would expect to see a. a decrease in the demand for on-campus parking b. a decrease in the supply of on-campus parking c. an increase in the demand for off-campus parking d. all of the above
c. an increase in the demand for off-campus parking
which of the following would cause a decrease in the demand for coffee a. an increase in the price of coffee b. an increase in the price of tea, if coffee and tea are substitutes c. an increase in the price of sugar if you drink your coffee with sugar d. a major decrease in the supply of coffee caused by a big drought e. none of the above
c. an increase in the price of sugar if you drink your coffee with sugar
the thing least likely to change the demand (shift the demand curve) for a university education is a. an increase in the demand for university-educated workers b. an increase in the cost of textbooks c. an increase in the university tuition charges d. an increase in the salaries of low-skill (non-university-educated) jobs e. none of the above
c. an increase in the university tuition charges
for which of the following is demand likely to be the most elastic? a. bread b. sourdough bread c. bilo's wheat sourdough bread d. all will have equally elastic demand
c. bilo's wheat sourdough bread
what would happen in the market for interior house paint if the price of paintbrushes falls while the price of wallpaper (a substitute) rises? a. the equilibrium price would increase, but the impact on quantity would be uncertain b. the equilibrium price would decrease, but the impact on quantity would be uncertain c. both equilibrium price and quantity would increase d. the equilibrium quantity would increase but the impact on price would be uncertain e. the equilibrium quantity would decrease but the impact on price would be uncertain
c. both equilibrium price and quantity would increase
when demand decreases a. price rises and quantity falls b. price falls and quantity rises c. both price and quantity fall d. price rises, but the effect on quantity is uncertain e. quantity falls, but the price stays the same
c. both price and quantity fall
when the demand for something falls a. the price rises + quantity falls b. price falls and quantity falls c. both price and quantity fall e. price rises, but the effect on quantity is uncertain e. quantity falls, but price stays the same
c. both price and quantity fall
a friend of yours tells you that despite the price of coffee reaching an all-time high, coffee growers are drinking more coffee than they did before the price rise. an explanation of this that fits with economic thinking is that a. the farmers grow the coffee, so the price doesn't affect their consumption b. caffeine is addictive so farmers end up drinking more no matter the price c. coffee farmers have been made wealthier by the increase in coffee prices and thus increase their demand for coffee d. higher coffee prices mean lower costs to the farmer e. all of the above
c. coffee farmers have been made wealthier by the increase in coffee prices and thus increase their demand for coffee
it seems that every year around valentine's day the price of roses rises sharply. this is probably because a. the quantity of roses demanded increases b. florists reduce supply to force up price c. demand for roses increases d. demand for roses decreases after valentine's day, so now is the time to charge high prices
c. demand for roses increases
the fact that more teachers per student are employed now than 20 years ago (i.e., equilibrium quantity has increased) tells us that a. demand has increased b. supply has increased c. either demand or supply has increased d. demand has decreased e. supply has decreased
c. either supply or demand has increased
when the supply and demand for a good both increase, a. equilibrium price will increase b. equilibrium price will decrease c. equilibrium price may increase, decrease, or remain unchanged d. equilibrium price will increase if we are dealing with a normal good
c. equilibrium price may increase, decrease, or remain unchanged
when the supply and demand for a good increase a. equilibrium price will increase b. equilibrium price will decrease c. equilibrium price may increase, decrease, or remain unchanged d. equilibrium price will increase if we are dealing with a norma good
c. equilibrium price may increase, decrease, or remain unchanged
when the supply and demand of a good both increase, a. equilibrium price will increase b. equilibrium price will decrease c. equilibrium price may increase, decrease, or remain unchanged d. equilibrium price will increase if we are dealing with a normal good
c. equilibrium price may increase, decrease, or remain unchanged
a rise in demand a. forces price up + quantity down b. forces price down + quantity up c. forces price + quantity up d. forces price + quantity down
c. forces price + quantity down
if instead there is a major frost in florida that kills 50% of the orange crop, we would expect to see a. a decreased demand for oranges b. an orange shortage c. higher orange prices d. an increase in quantity demanded
c. higher orange prices
which of the following will increase the supply of brass key rings? a. rise in demand b. rise in price c. improvement in key-ring making technology d. all of the above e. just a + c
c. improvement in key-ring making technology
demand for a "necessity" is likely to be ---, while demand for a "luxury" is likely to be --- a. elastic, elastic b. inelastic, inelastic c. inelastic, either elastic or inelastic d. elastic, either elastic or inelastic
c. inelastic, either elastic or inelastic
an article in the newspaper suggests than an indian tribe should use coal rather than gas power because the tribe owns 114 billion tons of coal reserves. this statement a. is true because if they own the coal, they don't have to pay for it b. is false because coal is more polluting c. is falls because it ignores opportunity costs d. none of the above
c. is falls because it ignores opportunity costs
for which product is demand likely to be most elastic? a. raisin brain b. kellog's raisin bran c. kellog's raisin bran at bilo d. breakfast cereal e. all of the above equally, as all involve basically the same product
c. kellog's raisin bran at bilo
an increase in the price of oranges a. increases the supply of oranges (shifts the supply curve) b. decreases the demand for oranges (shifts the demand curve) c. may be caused either by an increase in demand or a decrease in supply d. leads to a reduction in orange input prices
c. may be caused either by an increase in demand or a decrease in supply
which of the following will increase the supply of photocopiers? a. a fall in the price of photocopy paper (a complement) b. a rise in the price of scanners (a substitute) c. new technology that makes it possible to manufacture photocopiers much more cheaply d. all of the above
c. new technology that makes it possible to manufacture photocopiers much more cheaply
which of the following is likely to have the least elastic supply? a. coke b. soda c. paintings by rembrandt d. automobiles e. oil
c. paintings by rembrandt
when the demand for something increases a. price + quantity fall b. price falls + quantity rises c. price + quantity rise d. price rises, but the effect on quantity is uncertain e. quantity falls, but price stays the same
c. price + quantity rise
a major oil spill wipes out a substantial portion of ocean cod. what happens to the equilibrium price and quantity of cod? a. price increases; quantity increases b. price decreases; quantity increases c. price increases; quantity decreases d. price decreases; quantity decreases
c. price increases; quantity decreases
the market clearing price of a good is the price at which a. shortages occur b. surpluses occur c. quantity supplied equal quantity demanded d. all of the above e. none of the above
c. quantity supplied equal quantity demanded
an increase in the demand for rental apartments will a. raise the price and create a shortage b. lower the price and product a suprlus c. raise the price and increase the quantity supplied d. raise the price and increase the supply
c. raise the price and increase the quantity supplied
the "law of demand" a. determines the equilibrium price b. doesn't hold for scarce goods c. says that people buy less of a good when price rises d. applies only to consumer goods
c. says that people buy less of a good when price rises
the "law of demand" a. determines the market-clearing price b. doesn't hold for scarce goods c. says that people don't buy more of a good when price rises d. applies primarily to consumer goods e. measures the relationship between price and quantity demanded
c. says that people don't buy more of a good when price rises
if then you discover that you were mistaken, and that, although the price had risen, the equilibrium quantity of soybeans has actually fallen, you would know that a. demand has decreased b. demand has increased c. supply has decreased d. supply has increased e. none of the above
c. supply has decreased
if quantity supplied responds only slightly to change in price, then a. supply is elastic b. an increase in price will not shift the supply curve much c. supply is inelastic d. supply is perfectly inelastic
c. supply is inelastic
if the supply of "roots" (an input) increases, what would we expect to happen in the market for root beer? a. demand to increase b. demand to decrease c. supply to increase d. supply to decrease
c. supply to increase
if the price of a substitute for goods X increases, then a. the demand for good X increases b. the price of good X falls c. the demand for good X decreases d. the demand for good X will not change
c. the demand for good X decreases
a technological breakthrough reduces the cost of pie crust. what is the effect on the market for cherry pies? (consider whether demand or supply or both change) a. the equilibrium price increases; the equilibrium quantity increases b. the equilibrium price increases; the equilibrium quantity decreases c. the equilibrium price decreases; the equilibrium quantity increases d. the equilibrium price decreases; the equilibrium quantity decreases e. the equilibrium price decreases; there is not enough information to tell what happens to quantity
c. the equilibrium price decreases; the equilibrium quantity increases
if an exceptionally snowy winter makes for great skiing conditions but also raises the cost of shipping in skis, we would expect a. the equilibrium price and quantity of skis to rise b. the equilibrium price and quantity of skis to fall c. the equilibrium price to rise, but the effect on quantity to be uncertain d. the equilibrium quantity to rise, but the effect on price to be uncertain e. the equilibrium price to fall, but the effect on quantity to be uncertain
c. the equilibrium price to rise, but the effect on quantity to be uncertain
what would happen in the market for beef salumi if the prices of both bologna (a substitutes) and cattle feed fall a. the equilibrium price would increase + quantity would decrease b. the equilibrium price would decrease + quantity would increase c. the equilibrium price would decrease + the effect on quantity would be uncertain d. equilibrium quantity would decrease + the effect on price would be uncertain e. equilibrium quantity would increase + the effect on price would be uncertain
c. the equilibrium price would decrease + the effect on quantity would be uncertain
which of the following would increase demand for aardvark meat? a. a fall in the price of aardvarks b. a fall in the price of aardvark eggs c. the new belief that eating aardvark makes you beautiful d. all of the above
c. the new belief that eating aardvark makes you beautiful
if florida has a bumper orange crop, we can expect that a. the price of oranges will rise b. the number of oranges consumed will fall c. the price of grapefruit will fall if grapefruit and oranges are substitutes d. the demand for oranges will increase
c. the price of grapefruit will fall if grapefruit and oranges are substitutes
which of the following is NOT an important determinant of the level of demand? a. income b. the price of related goods c. the price of inputs d. tastes e. all of the above are important determinants of the level of demand
c. the price of inputs
if i tell you that the price of snowboards has risen and the quantity of snowboards on the market has fallen, you know that a. the law of demand has been violated b. the law of supply has dominated the law of demand c. the supply of snowboards has decreased d. the supply of snowboards has increased e. the demand for snowboards has decreased
c. the supply of snowboards has decreased
which of the following is the most important advantage to a society of using money rather than relying exclusively on barter? a. the use of money encourages people to diversify and learn to do more things for themsleves b. the use of money encourages people who want to exchange to become more closely acquainted c. the use of money lowers the cost of exchanging goods d. the use of money reduces opportunities for fraud and theft e. the use of money reduces selfishness because money in itself has no value
c. the use of money lowers the cost of exchanging goods
in economics, the cost of something is a. the out-of-pocket expense of obtaining it b. always measured in money c. what you must give up to get it d. always higher than what people think
c. what you must give up to get it
which of the following will increase the supply of wheat? a. an increase in the price of wheat b. an increase in the demand for wheat c. an increase in the price of corn d. a decrease in the price of fertilizer
d. a decrease in the price of fertilizer
which of the following will NOT increase the demand for porcelain tea sets? a. a rise in the price of china tea sets (a substitute) b. a fall in the price of tea (a complement) c. a rise in income, and porcelain tea sets are a normal good d. a fall in the price of porcelain e. all of the above will increase demand for porcelain tea sets
d. a fall in the price of porcelain
which of the following is most likely to have been responsible for the rise in the cost of hiring university faculty? a. a decline in alternative employment opportunities for university faculty b. an increased emphasis on excellent teaching and research skills c. an increase in the time it takes to get a Ph.D. d. a rising demand for college faculty
d. a rising demand for college faculty
which of the following will increase the quantity of surfboards demanded? a. very good surf b. flal in beach user-fees c. fall in price of surfboards d. all of above
d. all of above
a supply curve shows a. the relationship between price and quantity supplied b. how many units of the good will be supplied at various prices c. cost of supplying the good. d. all of the above
d. all of the above
at the intersection of the supply curve and the demand curve a. the quantity supplied equals the quantity demanded b. no buyer who is selling to pay the market prices goes without c. no seller willing to sell at the market price is unable to do so d. all of the above
d. all of the above
for which of the following is there a market? a. orange juice b. pedigree dogs c. hiking in national forest land d. all of the above e. a + b
d. all of the above
suppose clemson passes a law that forbids the construction of new houses within city limits. we would expect a. price of existing housing to rise b. price of houses around clemson to rise c. more building to occur in the area surrounding clemson d. all of the above
d. all of the above
the development of a lower cost way of making wheat flour a. increases the supply of wheat flower b. decreases the demand for rye flour, if rye flour is a substitute for wheat flour c. increases the supply of wheat bread d. all of the above
d. all of the above
which of the following will increase the quantity of coffee consumed? a. fall in the price of coffee following a great coffee crop in colombia b. a rise in the price of tea (a substitute) c. a fall in the price of cream (a complement) d. all of the above e. just b + c
d. all of the above
which of the following will NOT increase the quantity of coffee demanded? a. the discovery that coffee cures cancer b. a rise in income and coffee is a normal good c. a great coffee harvest d. all of the above will increase the demand for coffee
d. all of the above will increase the demand for coffee
which of the following will not increase the demand for rice (will not shift the demand curve) a. the discovery that eating rice reduces the change of heart disease b. an increase in the demand for rice cakes c. an increase in the price of potatoes (a substitute) d. an unusually good rice harvest e. all of the above will increase the demand for rise
d. an unusually good rice harvest
a rise in income will tend to a. increase the demand for a product b. decrease the demand for a product c. leave demand for a product unchanged d. any of the above, depending on the product and your preferences
d. any of the above, depending on the product and your preferences
the demand curve represents --- while the supply curve represents --- a. increases, decreases b. decreases, increases c. prices, quantities d. benefits, costs
d. benefits, costs
if the supply of tea increases, what would expect to happen in the market for coffee (a substitute)? a. the price to rise and quantity to fall b. the price to fall and quantity to rise c. both price and quantity to rise d. both price and quantity to fall e. price to fall, but the effect on quantity to be uncertain
d. both price and quantity to fall
when you go to the supermarket you find that there is exactly the kind of deodorant you wanted on the shelf. this is because a. safeway's managers have your best interests at heart b. safeway carried out an extensive survey c. someone in the central planning office in DC told them to stock more doederant d. changes in price spurred by the actions of many different consumers indicate to safeway the level of demand
d. changes in price spurred by the actions of many different consumers indicate to safeway the level of demand
if a legal ceiling price causes the quantity of a good demanded to be more than quantity supplied a. competition among both buyers + sellers is prvented b. competition among buyers is prevented c. competition among sellers is prevented d. competition among buyers will raise the non-monetary costs of obtaining the good
d. competition among buyers will raise the non-monetary costs of obtaining the good
which of the following is least likely to increase the number of burritos that Moe's sells? a. they hold a burrito sale b. a new formula that makes their burritos even more delicious c. chipotle increases its prices d. consumer income falls, and burritos are a normal good e. all will increase the number of burritos sold
d. consumer income falls, and burritos are a normal good
if price and quantity both increase, you know that a. the law of demand has been violated b. supply must have increased c. supply must have decreased d. demand must have increased e. demand must have decrease
d. demand must have increased
if you read in the newspaper that the price of a product has risen, and that the quantity of the product sold in the market has risen as well, you know that a. the law of demand has been violated b. the newspaper story must be wrong c. supply must have shifted d. demand must have increased e. demand must have decreased
d. demand must have increased
suppose that the supply of rootbeer (a complement) increases and the price of ice cream (an input) falls. what would you expect to happen in the market price and quantity of ice cream? a. the equilibrium price would increase, but the impact on equilibrium quantity would be uncertain b. the equilibrium price would decrease, but the impact on equilibrium quantity would be uncertain d. both equilibrium price and quantity would increase d. equilibrium quantity would increase, but the impact on the equilibrium price would be uncertain e. equilibrium quantity would decrease, but the impact on the equilibrium price would be uncertain
d. equilibrium quantity would increase, but the impact on the equilibrium price would be uncertain
if frost kills a significant amount of the brazilian coffee crop, we can expect a. the price of coffee to rise b. the quantity of coffee consumed to fall c. the price of tea to rise, if coffee and tea are substitutes d. the supply of coffee to decrease (shift to left) e. all of the above
e. all of the above
price are important because they a. bring quantity demanded and quantity supplied into balance b. help determine who obtains scarce goods c. help determine how to allocate our scarce resources d. coordinate the choices made by consumers and producers e. all of the above
e. all of the above
the demand for snowboard depends upon a. the price of lift tickets b. the price of skis c. how much people like snowboarding d. how much people like skiing e. all of the above
e. all of the above
which of the following will increase the market price of coffee? a. discovery that coffee cures cancer b. a terrible storm in brazil that destroys half the coffee crop c. an increase in price of tea (substitute) d. a fall in the price of cream (complement) e. all of the above
e. all of the above
which of the following will increase the number of umbrellas sold? a. incomes fall + umbrellas are an inferior good b. the price of raincoats rises and raincoats are a substitute for umbrellas c. extra-rainy weather d. a fall in price of umbreallas e. all of the above
e. all of the above
which of the following will increase the demand for mahogany desks? a. rise in income, and mahogany desks are a normal good b. fall in price of mahogany c. sudden fad for mahogany furniture d. all of the above e. all of the above but b
e. all of the above but b
if the equilibrium price has fallen from $5.50 to $4.75, we would know that a. demand has decreased b. supply has increased c. demand has increased d. either supply has decreased or demand has increased e. either supply has increased or demand has decreased
e. either supply has increased or demand has decreased
suppose that the price of a substitutes for good X falls and the price of the raw materials used to manufacture good X increases. what would you expect to happen in the market for good X? a. the equilibrium price would increase, but the impact on equilibrium quantity would be uncertain b. the equilibrium price would decrease, but the impact on equilibrium quantity would be uncertain c. both equilibrium price + quantity would increase d. equilibrium quantity would increase, but the impact on equilibrium price would be uncertain e. equilibrium quantity would decrease, but the impact on equilibrium price would be uncertain
e. equilibrium quantity would decrease, but the impact on equilibrium price would be uncertain
because the demand for wheat tends to be inelastic, the development of a new, more productive hybrid wheat would tend to a. increase the total revenue of wheat farmers b. decrease the total revenue of wheat farmers c. weaken the demand for wheat d. decrease the supply of wheat e. increase the elasticity of demand
e. increase the elasticity of demand
if a frost destroys most of the florida orange crop a. the supply of orange juice will decrease b. the price of oranges will rise c. he demand for oranges will decrease d. all of the above e. just a + b
e. just a + b
which of the following will decrease the supply (shift the supply curve) of chocolate cakes a. a rise in the price of chocolate a. a rise in the price of flour c. the news that eating chocolate cake causes cancer d. all of the above e. just a + b
e. just a + b
which of the following will increase the quantity of brass key rings supplied? a. rise in demand b. rise in price c. improvement in key-ring making technology d. all of the above e. just a + c
e. just a + c
which of the following is/are true? a. a reduction in the price of apricots will increase he demand for apricots b. a reduction in the price of apricots will decrease he demand for apricots c. an increase in the consumer income will decrease the demand for apricots if apricots are a normal good d. all of the above e. none of the above
e. none of the above
which of the following will increase the market price of chocolate eclairs? a. the discovery that chocolate causes cancer b. a much larger than expected chocolate crop c. a fall in the price of cupcakes (a substitute) d. a rise in the price of milk (a complement) e. none of the above
e. none of the above
the law of demand would lead you to expect that if the price goes up, a. people will complain b. people will no longer buy butter c. a butter surplus will occur d. a butter shortage will occur e. people will buy more margarine
e. people will buy more margarine
the quantity supplied will increase with an increase in price only if supply is not a. elastic b. inelastic c. unit elastic d. perfectly elastic e. perfectly inelastic
e. perfectly elastic
suppose that now-illegal drugs are legalized, increasing both the supply and demand. we would expect a. price to go up and quantity to go down b. price to go down and quantity to go up c. both price and quantity to go up d. price to go up, but the effect on quantity to be uncertain e. quantity to go up, but the effect on price to be uncertain
e. quantity to go up, but the effect on price to be uncertain
if an unusually cold summer discourages people from eating ice cream while lowering the cost of storing ice cream, we would expect a. the equilibrium price and quantity of ice cream to rise b. the equilibrium price and quantity of ice cream to fall c. the equilibrium price to rise, but the effect on quantity to be uncertain d. the equilibrium quantity to rise, but the effect on price to be uncertain e. the equilibrium price to fall, but the effect on quantity to be uncertain
e. the equilibrium price to fall, but the effect on quantity to be uncertain
the price of marshmallows (a complement to chocolate consumption) rises while war in the oompaloopia disrupts international deliveries of chocolate. what happens to the equilibrium price and quantity of chocolate? a. the equilibrium price will increase, but the effect on equilibrium quantity is uncertain b. the equilibrium price will decrease, but the effect on equilibrium quantity is uncertain c. both equilibrium price + quantity will decrease d. the equilibrium quantity will increase, but the effect on equilibrium price is uncertain e. the equilibrium quantity will decrease, but the effect on equilibrium price is uncertain
e. the equilibrium quantity will decrease, but the effect on equilibrium price is uncertain
suppose the price of hershey bars (a substitute) falls and the price of peanuts (an input) rises. what would you expect to happen to the price and quantity of snickers bars on the market? a. the equilibrium price would increase, but the effect on equilibrium quantity would be uncertain b. the equilibrium price would decrease, but the effect on equilibrium quantity would be uncertain c. both equilibrium price + quantity will decrease d. the equilibrium quantity would increase, but the effect on equilibrium price would be uncertain e. the equilibrium quantity would decrease, but the effect on equilibrium price would be uncertain
e. the equilibrium quantity would decrease, but the effect on equilibrium price would be uncertain
a hurricane destroys half of california orange groves. what happens to the equilibrium price and quantity of oranges? a. price rises, quantity falls b. price falls, quantity rises c. price + quantity rise d. price + quantity fall e. price falls, effect on quantity is uncertain
price rises, quantity falls