Global Econ Exam 1 (Quiz 2)

Consider the supply curve for cotton shirts. An increase in the price of cotton will: A) increase the supply of cotton shirts. B) decrease the supply of cotton shirts. C) increase the quantity supplied of cotton shirts. D) decrease the demand for cotton shirts.

B) decrease the supply of cotton shirts.

A newspaper story recently reported that the price of new cars has decreased and the quantity of new cars sold has dropped. The new price and quantity could have been caused by: A) a decrease in buyers' incomes. B) an increase in buyers' incomes. C) an increase in production costs. D) a decrease in production costs.

A) a decrease in buyers' incomes.

Pizza is a normal good. If students' incomes at your college increase, the effect on pizza would be: A) an increase in the demand. B) an increase in the quantity demanded. C) a decrease in the demand. D) no change in the demand.

A) an increase in the demand.

If the price of hamburger decreased, it would probably result in ________ in the demand for hamburger buns. A) a decrease B) an increase C) no change D) random fluctuations

B) an increase

(Table: The Demand for Chocolate-Covered Peanuts) Look at the table The Demand for Chocolate-Covered Peanuts.) Barbara demands 20 bags of chocolate-covered peanuts when the price of each bag is ________. A) $0.90 B) $0.80 C) $0.70 D) $0.60

C) $0.70

(Figure: Demand for Coconuts) Look at the figure Demand for Coconuts. If coconuts are a normal good and the income level of consumers falls, it will be represented in the figure as a movement from: A) A to C. B) B to A. C) C to A. D) E to B.

C) C to A.

(Figure: Supply of Coconuts) Look at the figure Supply of Coconuts. If the prices of inputs (e.g., labor, fertilizer, and fuel) used to produce and transport coconuts increased, it would be represented in the figure as a movement from: A) A to B. B) B to A. C) C to A. D) E to B.

C) C to A.

A decrease in supply is caused by: A) an increase in the price of goods that are used in production. B) suppliers' expectations of lower prices in the future. C) an advancement in the technology for producing the good. D) an increase in the number of producers.

A) an increase in the price of goods that are used in production.

(Figure: Shifts in Demand and Supply III) Look at the figure Shifts in Demand and Supply III. The figure shows how supply and demand might shift in response to specific events. Suppose scientists discover that eating asparagus slows down the aging process. Which panel best describes how this will affect the market for asparagus? A) panel A B) panel B C) panel C D) panel D

A) panel A

Which of the following influences does not shift the supply curve? A) people deciding that they want to buy more of the product B) a decrease in the price firms expect to receive in the future C) a rise in the wages paid to workers D) the development of a new production technology

A) people deciding that they want to buy more of the product

Which of the following examples illustrates the law of demand? A) An increase in tuition encourages more students to enroll in college because the quality of education has risen. B) Consumers buy more personal computers because prices have fallen. C) Oil companies drill for new sources of oil because oil prices are higher. D) Fewer people play golf because incomes are lower.

B) Consumers buy more personal computers because prices have fallen.

When the price of gas goes down and the demand for tires goes up, a likely possibility is that tires and gas are: A) substitutes. B) complements. C) both expensive. D) both inexpensive.

B) complements.

The market equilibrium is found at the: A) price where quantity demanded exceeds quantity supplied. B) price where quantity demanded equals quantity supplied. C) price where quantity supplied exceeds quantity demanded. D) highest price the market will bear.

B) price where quantity demanded equals quantity supplied.

The ________ apples will decrease when apple prices rise. A) demand for B) quantity demanded of C) supply of D) equilibrium of

B) quantity demanded of

When the price of lamps increases, the: A) supply increases. B) quantity supplied increases. C) supply decreases. D) quantity supplied decreases.

B) quantity supplied increases.

A shift of the demand curve for thin-crust pizza would not be caused by a change in: A) buyers' incomes. B) the price of thin-crust pizza. C) the price of thick-crust pizza. D) the popularity of thin-crust pizza.

B) the price of thin-crust pizza.

If the price of corn is rises, we would expect: A) the quantity of corn demanded to rise. B) the quantity of corn supplied to rise. C) the demand for corn to shift inward. D) the supply of corn to shift outward.

B) the quantity of corn supplied to rise.

If tortilla chips are a normal good, what happens to equilibrium price and quantity when there is an increase in income? A) Equilibrium price decreases and equilibrium quantity increases. B) Equilibrium price decreases and equilibrium quantity decreases. C) Equilibrium price increases and equilibrium quantity increases. D) Equilibrium price increases and equilibrium quantity decreases.

C) Equilibrium price increases and equilibrium quantity increases.

A good is normal if which of the following is true? A) When income increases, the demand remains unchanged. B) When income increases, the demand decreases. C) When income increases, the demand increases. D) Income and the demand are unrelated.

C) When income increases, the demand increases.

Consider two competing motorcycle manufacturers, Harley-Davidson and Honda. If Harley-Davidson raises the price of its motorcycles, we can expect: A) a shift to the right in the supply curve of Hondas and lower prices for Hondas. B) a shift to the left in the supply curve of Hondas and higher prices for Hondas. C) a shift to the right in the demand curve for Hondas and higher prices for Hondas. D) a shift to the left in the demand curve for Hondas and lower prices for Hondas.

C) a shift to the right in the demand curve for Hondas and higher prices for Hondas.

If people demand more of product A when the price of B falls, then A and B are: A) not related. B) substitutes. C) complements. D) inferior goods.

C) complements.

Which of the following describes two goods that are most likely substitutes in consumption? A) loaves of bread and sticks of butter B) loaves of bread and toasters C) loaves of bread and hamburger buns D) loaves of bread and gasoline

C) loaves of bread and hamburger buns

The typical supply curve illustrates that: A) other things equal, the quantity supplied for a good is inversely related to the price of a good. B) other things equal, the supply of the good creates its own demand for the good. C) other things equal, the quantity supplied for a good is positively related to the price of a good. D) price and quantity supplied are unrelated.

C) other things equal, the quantity supplied for a good is positively related to the price of a good.

(Figure: Shifts in Demand and Supply II) Look at the figure Shifts in Demand and Supply II. The graph shows how supply and demand might shift in response to specific events. Suppose a drought destroys one-third of the nation's peanut crop. Which panel best describes how this will affect the market for peanuts?

C) panel C

(Figure: Shifts in Demand and Supply IV) Look at the figure Shifts in Demand and Supply IV. The figure shows how supply and demand might shift in response to specific events. Suppose the price of lumber falls dramatically. Which panel best describes how this will affect the market for houses? A) panel A B) panel B C) panel C D) panel D

C) panel C

Which of the following statements is correct? A) A change in demand is a movement along the demand curve, and a change in quantity demanded is a shift of the demand curve. B) Both a change in quantity demanded and a change in demand are movements along the demand curve, only in different directions. C) Both a change in quantity demanded and a change in demand are shifts of the demand curve, only in different directions. D) A change in quantity demanded is a movement along the demand curve, and a change in demand is a shift of the demand curve.

D) A change in quantity demanded is a movement along the demand curve, and a change in demand is a shift of the demand curve.

(Figure: Supply of Coconuts) Look at the figure Supply of Coconuts. An expectation on the part of coconut suppliers that the price of coconuts will be significantly higher in the very near future would be represented in the figure as a movement from A) A to B. B) B to A. C) A to C. D) B to E.

D) B to E.

(Figure: Demand for Coconuts) Look at the figure Demand for Coconuts. If coconuts are a normal good and consumers believe that the price of coconuts will rise significantly in the near future, it will be represented in the figure as a movement from: A) C to A. B) A to B. C) B to E. D) E to B.

D) E to B.

Which of the following is likely to cause a rightward shift in the demand for home-delivered pizza? A) a lower price of pizza B) a lower price of fast-food hamburgers C) a higher price of pepperoni D) a larger population

D) a larger population

(Figure: Shifts in Demand and Supply II) Look at the figure Shifts in Demand and Supply II. The figure shows how supply and demand might shift in response to specific events. Suppose the technology for producing ethanol fuel improves. Which panel best describes how this will affect the market for ethanol?

D) panel D