Econ Practice-Exam 1

If toast and butter are complements, then which of the following would increase the demand for toast?

A decrease in the price of butter

Which of the following events must result in a higher price in the market for cigars? a. Demand for cigars increases, and supply of cigars decreases. b. Demand for cigars and supply of cigars both decrease. c. Demand for cigars decreases, and supply of cigars increases. d. Demand for cigars and supply of cigars both increase

A. Demand for cigars increases, and supply of cigars decreases

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell? a. Price would fall, and the effect on quantity would be ambiguous. b. Price would rise, and the effect on quantity would be ambiguous. c. Quantity would fall, and the effect on price would be ambiguous. d. Quantity would rise, and the effect on price would be ambiguous.

A. Price would fall, and the effect on quantity would be ambigous

Two goods are substitutes when a decrease in the price of one good: a. decreases the demand for the other good b. decreases the quantity demanded for the other good c. increases the demand for the other good d. increases the quantity demanded for the other good

A. decreases the demand for the other good

Which of the following is NOT a determinant of demand? a. the price of a resource that is used to produce the good b. the price of a complementary good c. the price of the good next month d. the price of a substitute good

A. the price of a resource that is used to product the good

If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins rises? a. both the equilibrium price and quantity would increase b. both the equilibrium price and quantity would decrease c. the equilibrium price would increase, and the equilibrium quantity would decrease d. the equilibrium price would decrease, and the equilibrium quantity would increase

B. both the equilibrium price and quantity would decrease

If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos falls? a. both the equilibrium price and quantity would increase b. both the equilibrium price and quantity would decrease c. the equilibrium price would increase, and the equilibrium quantity would decrease d. the equilibrium price would decrease, and the equilibrium quantity would decrease

B. both the equilibrium price and quantity would decrease

Suppose the income of buyers in a market for an inferior good decrease and a technological advancement occurs also. What would we expect to happen in the market? a. Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. b. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. c. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. d. None of the above is correct.

B. equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous

If macaroni and cheese is an inferior good, then an increase in: a. the price will cause the demand curve for macaroni and cheese to shift to the light b. the price will cause the demand curve for macaroni and cheese to shift to the right c. a consumer's income will cause the demand curve for macaroni and cheese to shift to the left d. a consumer's income will cause the demand curve for macaroni and cheese to shift the right

C. a consumer's income will cause the demand curve for macaroni and cheese to shift to the left

If buyers today become more willing and able than before to purchase larger quantities of stand-up paddle boards (SUPs) at each price of SUPs, then: a. we will observe a movement downward and to the right along the demand curve for SUPs b. we will observe a movement upward and to the left along the demand curve for SUPs c. the demand curve for SUPs will shift to the right d. the demand curve for SUPs will shift to the left

C. the demand curve for SUPs will shift to the right

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce them? a. Both the equilibrium price and quantity would increase. b. Both the equilibrium price and quantity would decrease. c. The equilibrium price would increase, and the equilibrium quantity would decrease. d. The equilibrium price would decrease, and the equilibrium quantity would increase.

D. The equilibrium price would decrease, and the equilibrium quantity would increase

The law of demand states that, other things equal, when the price of a good: a. falls, demand for the good rises b. rises, the quantity demanded for the good rises c. rises, the demand for the good falls d. falls, the quantity demanded for the good rises

D. falls, the quantity demanded for the good rises

Suppose that a decrease in the price of good X results in fewer units of good Y being demanded. This implies that X and Y are: a. complementary goods b. normal goods c. inferior goods d. substitute goods

D. substitute goods

Suppose roses are currently selling for $40 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a: a. shortage to exist and the market price of roses to increase b. shortage to exist and the market price of roses to decrease c. surplus to exist and the market price of roses to increase d. surplus to exist and the market price of roses to decrease

D. surplus to exist and the market price of roses to decrease