Econ Chapter 3 Review test

The relative price of a good is A) an opportunity cost. B) equal to the price of that good divided by the quantity demanded of the good. C) equal to the money price of that good. D) expressed in dollar amounts.

A) an opportunity cost

The existence of a shortage A) means resources are being allocated efficiently. B) pushes the price down. C) pushes the price up. D) is impossible in a market economy.

C) pushes the price up

As the price of a pound of peanuts falls, the A) supply of peanuts increases. B) quantity of peanuts supplied increases. C) quantity of peanuts supplied decreases. D) supply of peanuts decreases.

C) quantity of peanuts supplied decreases

Using the above figure, suppose that roses are a normal good. If there is an increase in income A) we cannot predict what will happen to the equilibrium quantity. B) the equilibrium quantity will decrease below 10 dozen roses. C) the equilibrium price will rise above $25 per dozen roses. D) we cannot predict what will happen to the equilibrium price.

C) the equilibrium price will rise above $25 per dozen roses

The opportunity cost of a hot dog in terms of hamburgers is the A) ratio of the slope of the demand curve for hot dogs to the slope of the demand curve for hamburgers. B) money price of a hot dog minus the money price of a hamburger. C) ratio of the money price of a hot dog to the money price of a hamburger. D) ratio of the slope of the supply curve for hot dogs to the slope of the supply curve for hamburgers.

C) the ratio of the money price of a hot dog to the money price of a hamburger

Georgine buys more sweaters when her income increases. For Georgine, sweaters are A) a normal good. B) a complement. C) an inferior good. D) a substitute.

A) a normal good

Demands differ from wants because A) demands reflect a decision about which wants to satisfy and a plan to buy the good, while wants are unlimited and involve no specific plan to acquire the good. B) wants imply a decision about which demands to satisfy, while demands involve no specific plan to acquire the good. C) wants require a plan to acquire a good but demands require no such plan. D) demands are unlimited, whereas wants are limited by income.

A) demands reflect a decision about which wants to satisfy and a plan to buy the good, while wants are unlimited and involve no specific plan to acquire the good

The opportunity cost of a good is the same as its A) relative price. B) money price. C) price index. D) none of the above.

A) relative price

Producers of tablet computers will be able to lower the wage rate that they pay to their workers. You are asked to predict the effects on the supply of tablet computers, and the price of a tablet computer. You predict that the supply curve shifts A) rightward, and the price falls. B) rightward, and the price is constant. C) leftward, and the price is constant. D) leftward, and the price rises.

A) rightward; and the price falls

Scarcity guarantees that A) wants will exceed demands. B) most demands will be satisfied. C) demands will be equal to wants. D) demands will exceed wants.

A) wants will exceed demands

A change in which of the following would NOT shift the supply curve for sneakers? A) an increase in technology for making sneakers B) an increase in the price of sneakers C) an increase in the price of rubber, used to make sneakers D) None of the above, that is, each change shifts the supply curve

B) an increase in the price of sneakers

A decrease in the price of bowling shifts the A) supply curve of bowling balls leftward. B) demand curve for bowling balls rightward. C) supply curve of bowling balls rightward. D) demand curve for bowling balls leftward.

B) demand curve for bowling balls rightward

The price of a DVD rental is $1.50 and the price of a downloaded movie is $1.00. If the price of a DVD rental increases by $0.50, the relative price a downloaded movie A) does not change. B) falls. C) rises. D) might change but more information is needed.

B) falls

28) Which of the following is NOT one of the factors that influences the supply of a product? A) expected future prices B) income C) technology D) number of suppliers

B) income

For consumers, goods A and B are complementary goods. The cost of a resource used in the production of A decreases. As a result A) the equilibrium price of B will fall and the equilibrium price of A will rise. B) the equilibrium price of B will rise and the equilibrium price of A will fall. C) the equilibrium prices of both A and B will rise. D) the equilibrium prices of both A and B will fall.

B) the equilibrium price of B will rise and the equilibrium price of A will fall

At a price of $10 in the above figure, there is A) a shortage of 200 units. B) a surplus of 200 units. C) a surplus of 400 units. D) a shortage of 400 units.

C) a surplus of 400 units

Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. What of the following could result in a movement to point b? A) a decrease in the price of bottled water B) an increase in the opportunity cost of soft drinks C) an increase in the price of bottled water D) a decrease in the relative price of a soft drink

C) an increase in the price of bottled water

The above figure shows the market for oil. Because of the development of a new deep sea drilling technology the A) demand curve does not shift, and the supply curve shifts from S2 to S1. B) demand curve shifts from D1 to D2 and the supply curve shifts from S1 to S2. C) demand curve does not shift, and the supply curve shifts from S1 to S2. D) demand curve shifts from D1 to D2 and the supply curve does not shift.

C) demand curve does not shift, and the supply curve shifts from S1 to S2

The initial supply and demand curves for a good are illustrated in the above figure. If there are technological advances in the production of the good, then the new equilibrium price for the good A) is more than $6. B) is $6. C) is less than $6. D) could be less than, equal to, or more than $6.

C) is less than $6

The price of a bag of corn chips is $3, and the price of a bottle of soda is $1. What is the relative price of a bag of corn chips? A) $3 B) 33¢ C) 1/3 bottle of soda per bag of corn chips D) 3 bottles of soda per bag of corn chips

D) 3 bottles of soda per bag of corn chips

The figure illustrates the market for pens. The equilibrium quantity is A) 2 pens a month. B) between 400 and 600 pens, but it is impossible to be precise. C) 5 pens a month. D) 500 pens a month.

D) 500 pens a month

When there is a shortage in the market, the quantity sold is A) less than the quantity bought. B) greater than the quantity supplied. C) less than the quantity supplied. D) equal to the quantity supplied.

D) equal to the quantity supplied

The above figures show the market for gasoline. Which figure(s) shows the effect of a new U.S. tax on oil that suppliers must pay? A) Figures A and C B) Figures B and D C) Figure A only D) Figure C only

D) figure C only

The above figures show the market for oranges. Which figure shows the effect of great growing conditions that produce an aboveaverage sized crop? A) Figure A B) Figure B C) Figure C D) Figure D

D) figure D

Good A and good B are substitutes in production. The demand for good A decreases, which lowers the price of good A. The decrease in the price of good A A) decreases the demand for good B. B) increases the demand for good B. C) decreases the supply of good B. D) increases the supply of good B.

D) increases the supply of good B